Welcome To Pacific MBA Operations Management Forum

Operations management is the area concerned with the efficiency and effectiveness of the operation in support and development of the firm's strategic goals. Other areas of concern to operations management include the design and operations of systems to provide goods and services. To put it succinctly, operations management is the planning, scheduling, and control of the activities that transform inputs (raw materials and labor) into outputs (finished goods and services).

A set of recognized and well-developed concepts, tools, and techniques belong within the framework considered operations management. While the term operations management conjures up views of manufacturing environments, many of these concepts have been applied in service settings, with some of them actually developed specifically for service organizations.

Operations management is also an academic field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service firm and their operations. The field is a synthesis of concepts derived from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions.

History of Operations Management

Until the end of the 18th century, agriculture was the predominant industry in every country. The advent of the steam engine and Eli Whitney's concept of standardized parts paved the way for the Industrial Revolution with its large manufacturing facilities powered by steam or water. 

A number of countries evolved from an agricultural economy to an industrial economy. But for a time, manufacturing was more of an art than a science. This changed with the introduction of Frederick W. Taylor's systematic approach to scientific management at the beginning of the twentieth century. 

The introduction of Taylor's method of scientific management and Henry Ford's moving assembly line brought the world into an age where management was predominantly centered on the production of goods.

In the late 1950s and early 1960s scholars moved from writing about industrial engineering and operations research into writing about production management. Production management had itself become a professional field as well as an academic discipline. 

.As the U.S. economy evolved into a service economy and operations techniques began to be incorporated into services the term production/operations management came into use. Today, services are such a pervasive part of our life that the term operations management is used almost exclusively.

What do Operations Managers do?

At the strategic level (long term), operations managers are responsible for making decisions about:

  v Product development (what shall we make?),
v Process and layout decisions (how shall we make it?),
v Site location (where will we make it?), &
v Capacity (how much do we need?).

At the tactical level (intermediate term), operations management addresses the issues relevant to efficiently scheduling material and labor within the constraints of the firm's strategy and making aggregate planning decisions like:

v Employee levels (how many workers do we need and when do we need them?),
v Inventory levels (when should we have materials delivered and should we use a chase strategy or a level strategy?), &

v Capacity (how many shifts do we need? Do we need to work overtime or subcontract some work?).

At the operational level, Operations managers and their subordinates must make decisions regarding:

v Scheduling (what should we process and when should we process it?), 
v Sequencing (in what order should we process the orders?),
v Loading (what order to we put on what machine?), &

v Work assignments (to whom do we assign individual machines or processes?).

Major Issues of Operations Management :

v reducing the development and manufacturing time for new goods and services

v achieving and sustaining high quality while controlling cost

v integrating new technologies and control systems into existing processes

v obtaining, training, and keeping qualified workers and managers

v working effectively with other functions of the business to accomplish the goals of the firm

v integrating production and service activities at multiple sites in decentralized organizations

v working effectively with suppliers at being user-friendly for customers

v working effectively with new partners formed by strategic alliances