Definition
Operations management is a comprehensive function in an organization that ensure successful processing of goods from receipt of raw materials to delivery of final goods and services to consumers. Precisely, it aligns production efficiency and optimal use of raw materials in the creation of final goods and services that are of quality.
Reflectively, it looks at the design of the output, internal processes, and internal checks to improve on the quality of the goods (Collier & Evans, 2011). Operations management in an organization focuses on ensuring efficiency in use of resources to generate quality output. Further, it ensures adequate control of internal processes which converts input to output. This results in efficiency. Finally, it focuses on effective delivery of goods to customers.
Role
Operations management plays a significant role in an organization. Success in operations management ensures the success of an organization. Efficient management of input to generate output ensures that an organization earns profits. Through operation management, an organization is able to manage costs efficiently. Management of internal processes ensures that the organization produces quality output consistently.
This promotes customer satisfaction by ensuring the production of quality goods consistently. Further, operations management gives managers the opportunity to influence value provided to shareholders, customers, employees, investors, and the community. Apart from ensuring the provision of high quality good, operations management also assists in creating a safe working environment for the employees. It also motivates employees to focus on their skills and knowledge (Collier & Evans, 2011).
Applicability
Application of operations management varies from one company to another. It depends on the nature of output produced by a company. However, the ultimate goal is to ensure efficiency, cost reduction and creation of quality goods and services. At Ford company, the management focuses on ten key strategic areas.
These are, design of good and services, quality management, process and capacity design, location, layout design, human resource and job designs, supply chain management , inventory, material requirement planning, intermediate short term scheduling and maintenance.
These ten strategic decision making points are integral part of the operational management at the company. At the design stage, the company uses product layout for the manufacturing processes. The manufacturing plant is arranged in such a way that there is a sequential flow of work. The manufacturing area is divided into several areas these are body build, paint shop, trim lines, final line, pre-delivery area, and shipment.
The production layout ensures efficiency in the internal production process thus reducing time wastage and cost. Other than product design, operation management also focuses on material management function. The company makes use of material requirement planning system to calculate necessary supplies, volumes and specific materials required for production. Further, under material management, the company uses Just-In-Time inventory management for controlling supply of inputs.
It helps in reducing the costs and risks associated with storage. In addition, the company makes use of electronic data interchange to order for input from suppliers. There is also a quality management under operations. Quality management facilitates ongoing improvement of production in the organization. Further, the quality management function takes into consideration the changes in the market. The company focuses on producing cars which are customer driven.
Further, checks are carried out in the pre – delivery area to verify that the output meets the needs of the customers and various safety standards. Feedback from quality management is incorporated at the design stage. Finally, the company makes use of new technology in most of the internal processes. Effective operations management has enabled the company increase market share and to have a competitive advantage in the market (United Nations Global Compact, 2012).
References
Collier, S. & Evans, R. (2011). OM3. Mason, USA: South Western Cengage Learning.
United Nations Global Compact. (2012). Ford Motor Company: The Ford purchasing structure. Web.