OPERATIONS MANAGEMENT:-

Operations management is an area of management concerned with overseeing, designing, and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs (in the forms of raw materials, labor, and energy) into outputs (in the form of goods and/or services).Operations management programs typically include instruction in principles of general management, manufacturing and production systems, factory management, equipment maintenance management, production control, industrial labor relations and skilled trades supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning. Management, including operations management, is like engineering in that it blends art with applied science. People skills, creativity, rational analysis, and knowledge of technology are all required for success.Operations strategy concerns policies and plans of use of the firm productive resources with the aim of supporting long term competitive strategy. Metrics in operations management can be broadly classified into efficiency metrics and effectiveness metrics.

Effectiveness metrics involve:

Price (actually fixed by marketing, but lower bounded by production cost): purchase price, use costs, maintenance costs, upgrade costs, disposal costs

Quality: specification and compliance Time: productive lead time, information lead time, punctuality Flexibility: mix, volume, gamma Stock availability Ecological Soundness: biological and environmental impacts of the system under

study.

The following organizations support and promote operations management:

Association for Operations Management (APICS) which supports the Production and Inventory Management Journal

European Operations Management Association (EurOMA) which supports the International Journal of Operations & Production Management

Production and Operations Management Society (POMS) which supports the journal: Production and Operations Management

Institute for Operations Research and the Management Sciences (INFORMS)-----------------------------------------------------------------------------------------------------------------------------------------------------

PPC:-

PPC stands for production planning and control. Production planning and control as a department plays a vital role in manufacturing organizations. It is clear from name that it is

something about planning. Planning is defined as setting goals. PPC deals with setting goals for production. Preparation of Production plan is one of core responsibility of PPC.

PPC coordinate with different departments: such as Production, Marketing, Logistics, Warehouse and other departments depending upon nature of organization. PPC receives data related to orders from marketing department. Production plan based on marketing and production data is prepared in PPC. This production plan provides clear idea about utilization of manufacturing resources for production. Prepared production plan is delivered to production department. Production department manufacture products according to that plan. PPC provides different kind of information to different departments. It provides information about available manufacturing resources to Marketing department. Marketing department receives orders according to that information. Similarly, it coordinates with other departments and provides relevant information.

PRODUCTION PLANNING:-

Production Planning is the process of identifying and articulating the market requirements that define a product’s feature set. It serves as the basis for decisions about price, distribution and promotion. It also involves the process of creating a product idea and working on it until the product is introduced to the market. Product planning entails managing the product throughout its life using various marketing strategies, including product extensions or improvements, increased distribution, price changes and promotions.

Phases of production planning:-

Developing the product concept

The first phase of production planning is developing the product concept. Managers usually create ideas for new products by identifying certain problems that consumers face and for which they need a certain product to make their life easier. After a thorough discussion on the product viability, many companies may come up with a mock model or a prototype of the original product.

For example, if we take a small computer retailer may see the need to create a computer repair division for the products it sells.

Studying the market

The next step in the product planning process is studying the competition. Secondary research usually provides details on key competitors and their market share, which is the percent of total sales that they hold in the marketplace. Such companies also do a SWOT analysis i.e. Strengths, Weaknesses, Opportunities and Threats which will helps them compare their product with other competitors in the market. The company can then determine places where they may have to work on their product so as to launch a better product and thus have an advantage over other companies.

For example, a small company with a high-quality image may be able to find additional markets for its products.

Market research

The company should consider doing both qualitative and quantitative marketing research for its new product. Focus groups are an example of qualitative information. Focus groups allow companies to ask their consumers about their likes and dislike of a product in small groups. A focus group allows the company to tweak the product concept before testing. Phone surveys, which gives the quantitative information, enables a company to test its product concept on a larger scale, the results of which are more predictable across the general population. Qualitative researchers aim to gather an in-depth understanding of human behavior and the reasons that govern such behavior. The qualitative method investigates the sole basis of any decision making. Hence, smaller but focused samples are more often used than large samples. Quantitative research refers to the systematic investigation via statistical, mathematical or numerical data. The objective of quantitative research is to develop and employ mathematical models, theories and/or hypotheses pertaining to the betterment of the product.

For example, many companies like Google, Microsoft etc. give the new products or their prototypes to their employees for testing their product and in lieu, the employees give their feedback about the product.

Product introduction

If the survey results prove favorable, the company may decide to sell the new product on a small scale. During this time, the company will distribute the products in one or more cities. The company will run advertisements and sales promotions for the product, tracking sales results to determine the products potential success. If sales figures are favorable, the company will then expand distribution even further. Eventually, the company may be able to sell the product on a national basis.

For example, if the company has the required funding they may get a celebrity to promote their product, which ensures a good introduction to the market and may boom sales initially.

Product life cycle

Product planning must also include managing the product through various stages of its product life cycle. These stages include the introduction, growth, maturity and decline stages. Sales are usually strong during the growth phase, while competition is low. However, with time the competitors may develop products of their own, which may be better. The introduction of these competitive products may force the company to lower its price. This low pricing strategy may prevent the company from losing market share. The company may also decide to better differentiate its product to keep its prices steady. The company may also try to develop a better product than their competitors and gain the market share.

For example, a small cell phone company may develop new, useful features on its cell phones that competitors do not have.

PRODUCTION CONTROL:-

Control means to guide something in the direction it is intended to go. Production control is a part of the PPC Cycle (Production Planning Control). It consists of follow up, inspecting, and evaluating. Production control supplements production planning.

The production control function involves the co-ordination and integration of the factors of production for optimum efficiency. Production control implements the production plan. It directs, co-ordinates and controls the production. It helps to have maximum production at minimum cost. It also helps to have timely delivery of goods and ensures that all work is completed on schedule.

Production control collects information about the production process. It helps to evaluate the weaknesses in the production process so as to make that information available to production planners and also to take corrective measures.

Importance of Production Control Function:

• Provides for the production of parts, assemblies and products of required

quality and quantity at the required time.

• Provides for optimum utilization of all resources.

• Achieves the broad objectives of low cost production and reliable customer

service.

Benefits of Production Control:

1. Improvement in profits through:

• Maintenance of a balanced inventory of material, parts. (WIP) Work in

process and finished goods.

• Balanced and stabilized production.

• Maximum utilization of equipment, tooling, manpower and manufacturing

and storage space.

• Minimum investment in inventory.

• Reduction in direct costs.

• Reduction set up costs

• Reduction in inventory costs

2. Competitive advantages:

• Reliable delivery to customers

• Shortened delivery schedules to customers • Lower production costs and greater pricing flexibility.

• Orderly planning/marketing of new products.

Elements of Production Controls:

• Control of planning: Assures receipt of latest forecast data from sales and

production, bill of materials data from product engineering and routing

information from process engineering.

• Control of materials: Controls inventory, ensures speedy provision of

material to the shop and facilitates movement of materials within the shop.

• Control of tooling: Check on the availability of tooling and provides fast

issue of tools to departments from tool cribs.

• Control of manufacturing capacity: Determine the availability of equipment

and labor capacities and issues realistic production schedules and provide a

means of recording completed production.

• Controls of information: Distribute timely information and report showing

deviations from plan so that correction action can be taken and provide data

on production performance measurement for future planning.

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INVENTORY MANAGEMENT:-The overseeing and controlling of the ordering, storage and use of components that a

company will use in the production of the items it will sell as well as the overseeing and

controlling of quantities of finished products for sale. A business's inventory is one of its

major assets and represents an investment that is tied up until the item is sold or used in

the production of an item that is sold.

By virtue of inventory management, judicious use of manpower, time, money as well as

energy is ensured.

OPERATIONAL RESEARCH:-

Operational Research (OR) is the use of advanced analytical techniques to improve decision

making. It is sometimes known as operations research, management science or industrial

engineering. People with skills in OR hold jobs in decision support, business

analytics, Marketing analysis and logistics planning – as well as jobs with OR in the title.

Why is OR needed?

Because it makes sense to make the best use of available resources. Today’s global

MARKETS and instant communications mean that customers expect high-quality products

and services when they need them, where they need them. Organisations, whether public or

private, need to provide these products and services as effectively and efficiently as

possible. This requires careful planning and analysis – the hallmarks of good OR. This is

usually based on process modelling, analysis of options or business analytics.

Examples of OR in action

Scheduling: of aircrews and the fleet for airlines, of vehicles in supply chains, of orders in a

factory and of operating theatres in a hospital.

Facility planning: computer simulations of airports for the rapid and safe processing of

travellers, improving appointments systems for medical practice. 

Planning and forecasting: identifying possible future developments in telecommunications,

deciding how much capacity is needed in a holiday business.

Yield management: setting the prices of airline seats and hotel rooms to reflect changing

demand and the risk of no shows.

Credit scoring: deciding which customers offer the best prospects for credit companies.

Marketing: evaluating the value of sale promotions, developing customer profiles and

computing the life-time value of a customer.

Defence and peace keeping: finding ways to deploy troops rapidly.

Some OR methods and techniques

Computer simulation: allowing you to try out approaches and test ideas for improvement.

Optimisation: narrowing your choices to the very best when there are so many feasible

options that comparing them one by one is difficult.

Probability and statistics: helping you measure risk, mine data to find valuable connections

and insights in business analytics, test conclusions, and make reliable forecasts.

Problem structuring: helpful when complex decisions are needed in situations with many

stakeholders and competing interests.

LEVELS OF MANAGEMENT:-

Generally, there are Three Levels of Management, viz,

Administrative or Top Level of Management. Executive or Middle Level of Management. Supervisory or Lower Level of Management.

TOP LEVEL OF MANAGEMENT:-

The Top Level Management consists of the Board of Directors (BOD) and the Chief Executive Officer (CEO). The Chief Executive Officer is also called General Manager (GM) or Managing Director (MD) or President. The Board of Directors are the representatives of the Shareholders, i.e. they are selected by the Shareholders of the company. Similarly, the Chief Executive Officer is selected by the Board of Directors of an organization.

The main role of the top level management is summarized as follows:-

The top level management determines the objectives, policies and plans of the organization.

They spend more time in planning and organizing. The top level management has maximum authority and responsibility. They are the

top or final authority in the organization. They are directly responsible to the Shareholders, Government and the General Public. The success or failure of the organization largely depends on their efficiency and decision making.

They require more conceptual skills and less technical Skills.

MIDDLE LEVEL OF MANAGEMENT:-

The Middle Level Management consists of the Departmental Heads (HOD), Branch Managers, and the Junior Executives. The Departmental heads are Finance Managers, Purchase Managers, etc. The Branch Managers are the head of a branch or local unit. The Junior Executives are Assistant Finance Managers, Assistant Purchase Managers, etc. The Middle level Management is selected by the Top Level Management.

The middle level management emphasizes more on following tasks:-

Middle level management gives recommendations (advice) to the top level management.

It executes (implements) the policies and plans which are made by the top level management.

It co-ordinate the activities of all the departments. They also have to communicate with the top level Management and the lower level

management. They spend more time in co-coordinating and communicating. The middle Level Management has limited authority and responsibility. They are

intermediary between top and lower management. They are directly responsible to the chief executive officer and board of directors.

Require more managerial and technical skills and less conceptual skills.

LOWER LEVEL OF MANAGEMENT:-

The lower level management consists of the Foremen and the Supervisors. They are selected by the middle level management. It is also called Operative / Supervisory level or First Line of Management.

The lower level management performs following activities:-

Lower level management directs the workers / employees. It maintains a link between workers and the middle level management. The lower level management informs the workers about the decisions which are

taken by the management. They also inform the management about the performance, difficulties, feelings, demands, etc., of the workers.

They spend more time in directing and controlling. The lower level managers make daily, weekly and monthly plans. They have limited authority but important responsibility of getting the work done

from the workers. They regularly report and are directly responsible to the middle level management.

Along with the experience and basic management skills, they also require more technical and communication skills.

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CORE IDEAS:-

Application of science to the practice of the management. Development of basic management functions. Articulation and application of specific principles of management.

ORGANISATION:-

An organization is the structure or mechanism (machinery) that enables living things to work together. In a static sense, an organization is a structure or machinery manned by group of individuals who are working together towards a common goal.

The main characteristics or features of an organization are as follows:-

It helps in the Growth of Enterprise. It Ensures Optimum Use of Human Resources. Prevents Corruption. Eliminates Overlapping and Duplication or work Realization of Objectives. Flexibility.

The following principles are an integral part of a good organization:-

Unity of Command: There must be unity of command. No one in any organization should report to more than one line supervisor, and everybody must know to whom he reports and who reports to him. No subordinate should get orders from more than one supervisor; otherwise it will lead to confusion, chaos and conflict.

The Scalar Principle: The principle is sometimes known as the 'chain command'. There must be clear lines of authority running from the top to the bottom of the organization.

The Principle of Authority: Authority is the element of organization structure. It is the tool by which a manager is able to create an environment for individual performance.

The Principle of Definition: The contents of every position should be clearly defined. The duties, responsibilities, authorities and organizational relationship of an individual working on a particular position should be well defined.

The Principle of the Unity of Direction: The basic rationale for the very existence of organization is the attainment of certain objectives. Major objective should be split into functional activities and there should be one objective and one plan for each group of people.

The Principle of Supremacy of Organization Objectives: The organization goals and objectives should be given wide publicity within the organization. The people contributing to it should be made to understand that enterprise objectives are more valuable and significant and one should place one's personal motives under it.

Span of Control: Under span of control, the number of employees and jobs managed by each manager is specified. Effective span of control avoids overlapping, duplication and confusion in the work.