You are on page 1of 5



EXECUTIVE SUMMARY The main goal of this report is to encourage engineering students to learn about operations management. Actually industry has changed due to globalization bringing new opportunities for all professionals and also exigencies. In order to be competitive students must know operations management if they want to upper management positions or earn a well-paid job. There no other choice, it is a requirement of industry. However the term “operations management” is so confusing that many students are not really interested in it, despite the new opportunities. So clarifying the term of operations management is the first step to make students feel motivated to learn more about it. Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers. Operations are essential to any organization that is why operations management exists. This term is usually confused with production management and supply chain management. In order to notice the differences, we review brief history about the evolution of the term operations. This way, we found that operations management is a broad term which covers production management and supply chain. The first one only deals with manufacturing processes of goods. And the second one is a network of organizations in which operations activities are conducted or a way of viewing operations management. Finally, an operations manager is able to make decisions in a strategic, tactical and operational level in order to answer questions such as What to make (product development)?, How many workers are needed and when (labor planning)?, What to process and when (scheduling)?, etc.

In recent years, the employment landscape has changed dramatically due to the globalization of the workplace and the automation of many processes. Hence, careers won't follow the traditional paths of the past. Engineering students must know operations because:

1.1. There are new opportunities for engineers as operations managers
It is necessary for engineering students to break their paradigms and understand that designing machines is not everything. Nowadays, many engineers tend to work in different functional areas such as  Accounting and finance

in the nineteenth century with the internal combustion engine and electrical power generation revolutionized industry. Administration  Marketing and sales  Operations  Research and development Their analytical and problem-solving skills make them able to reach well-paid jobs in both service and manufacturing industries. They must be sure they are harnessing resources properly to achieve organization's goals and be competitive respect to other workers.  During the pre-18th century.  Henry Ford. brought the world into an age centered around the mass production of goods. Then we will be able to understand what operations management means and its relationship between production management and supply chain management. in 1920. 1. operations play a particular role as one of the bases of the business with marketing and finance. HISTORY We are going to review how this concept emerged and changed. . and later.  After Second Industrial Revolution (around 1850). It is a requirement in every organization Even if a student doesn't want to take the opportunity. planning and monitoring. 2. This is because future engineers are going to work in organizations and any decision they make will have an economic and social impact. agriculture was the predominant industry. current industry requires professionals which know about strategy formulating. Operations serve as an excellent career path to upper management positions because the managers are responsible for the key decisions that affect the success of the organization. Although all these are important.  After Post World War II. railways. economy based on manual labor was replaced by one dominated by industry and the manufacture of machinery. Japanese Production System based on the principles: Quality.2. the development of steam-powered ships.  After Industrial Revolution (1770-1830). The development of allmetal machine tools in the first two decades of the 19th century facilitated the manufacture of more production machines powered by steam or water.

 More recently. and/or at lower environmental emissions. or results. 5. such as goods or services. at a higher level of quality. OPERATIONS MANAGEMENT Operations transform resource or data inputs into desired goods.Continuous Improvement and Elimination of Waste. PRODUCTION MANAGEMENT So far. Production management becomes a professional field as well as an academic discipline. more effectively.  During 1950s and early 1960s. Operations managers solicit feedback at each stage of the transformation processes in order to control and monitoring them. industrial engineering into production management. WHAT DO OPERATIONS MANAGERS DO?  Strategic (Long Term) Level: Decisions about:  What to make (product development)?  How to make it (process and layout decisions) or should we buy it? . world economies evolving tend to focus on services. whether more efficiently. Two or more connected operations constitute a process. Operations are essential to any organization that is why operations management exists. it is important to highlight that operations management deals with production of goods and services. Production management is related to manufacturing process of goods. services. Operations management is the design. 3. Production management techniques begin to be incorporated into services and the term operations management comes into use (goods and services). such as raw materials. and the management of the transformation processes that create value by converting inputs. so it is a part of operations management. management science. labor. Operations management is concerned about systems and how to make them operate better. improvement. and create and deliver value to the customers. at reduced cost. occurs the evolution of operations research. and/or customers into outputs. using the appropriate criterion or criteria determined by the organization. 4. for this reason service jobs outnumber manufacturing jobs.

The human body is not a linked chain of organs but a set of interrelated and integrated systems that work together to produce all necessary processes and ensure life. money. OPERATIONS MANAGEMENT vs SUPPLY CHAIN MANAGEMENT Supply chain perspective is a way to approach our study of operations management. Differences  Supply Chain Management aims to cut out inefficiencies in the chain. production. such as. Where to make it (site location)?  How much capacity is needed (high level capacity decisions)?  Tactical (Intermediate Term) Level: Addresses the material and labor resources within the constraints. energy. It is similar to a human body.1. for example:  What to process and when (scheduling)?  What is the order to process requirements (sequencing)?  How does the work utilize the resources (loading)?  Who does the work (assignments)? 6. This perspective means that we will examine operational activities that take place within firms as well those that cross firms’ boundaries. Operations Management has a larger set of activities engaged with controlling and monitoring every aspect of the processes used in the . for example:  How many workers are needed and when (labour planning)?  What level of stock is required and when should it be delivered (inventory and replenishment planning)?  How many shifts needed for work? Whether overtime or subcontractors are required (detailed capacity planning)  Operational (Short Term (daily/weekly/monthly) Level): Planning. This larger network of organizations makes up a firms’ supply chain. and people). Supply chain management is the design and execution of relationships and flows that connect the parties and processes across a supply chain. delivery). execution and control decisions. Operations management focuses on managing processes (design. involving suppliers and customers of all types. materials. supply. and increase profits by reducing costs. supply chain management focuses on managing relationships and flows (flows of information. We can also think of the supply chain as a network of organizations in which operations activities are conducted or a way of viewing operations management 6.

Operations management. Operations management focuses on managing processes (design. Operations Management. improvement. and people) We can see supply chain management as a way of viewing operations management. Operations Management takes place internally. It is important to have a clear understanding about operations management because. Operations Management is concerned with what is done with these materials inside the factory. 2. production. and the management of the transformation processes that create value by converting inputs into outputs. and that resources brought to a company.2. Production management and supply chain management are parts of it. especially for engineers who have analytical and problem-solving skills. nowadays. 8. CONCLUSIONS 1. 7. and used within the company. BIBLIOGRAFÍA [1] Krajewski. [2] Swink. supply.  Supply Chain Management is about getting material in and out of a factory. That is why they usually are not interested in these fields. Similarities Both Supply Chain Management and Operations Management are essential to a business’s success. Knowledge of these two fields of management can assist companies in gaining awareness of how they can grow and develop. 3. Both fields are concerned with ensuring that a business runs efficiently and effectively. materials. delivery).manufacturing of a product. are of an excellent quality. energy. Operations management is the design. there are new opportunities for all professionals. Production management deals only with the manufacturing process of goods. and making sure the right parts are coming in from the suppliers in the correct quality and quantity. Managing operations across the supply chain . Ritzman and Malhotra. Also it is a requirement for everyone who wants to work in organizations.  Supply Chain Management revolves around the activities that take place outside of a company. production management and supply chain management are confused terms for students. money. Operations are an excellent way to upper management positions and well-paid jobs. 6. supply chain management focuses on managing relationships and flows (flows of information.