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Contents
Operations management:........................................................................................... 2
History of management:............................................................................................. 2
Why Operation management important to organization:...........................................4
Engineering:............................................................................................................ 5
Finance:................................................................................................................... 5
Information technology (IT):.................................................................................... 5
Marketing:............................................................................................................... 5
To improve productivity: A measure of efficiency:...................................................6
A total Quality approach to operations improvement:.............................................6
Production and OPM:............................................................................................... 6
Production through separation:............................................................................6
Production by modification or improvement:.......................................................6
Production by assembly:...................................................................................... 6
Importance of Production Function and Production Management:..........................7
Operations Management:........................................................................................ 7
How to use the Operation management to the organizations for getting good results
for the customer’s satisfaction In ERP:.......................................................................8
Assess your needs:..................................................................................................... 8
Fix your processes:..................................................................................................... 8
Acquire and verify consistent data:............................................................................9
Customize your software:........................................................................................... 9
Train your employees:................................................................................................ 9
Continuously improve your processes:.......................................................................9

and knowledge of technology are all required for success. History of management: The history of production and operation systems began around 5000 B. and materials planning. operations management is the field concerned with managing and directing the physical and/or technical functions of a firm or organization. and controlling the process of production and redesigning business operations in the production of goods or services.2 Operations management: Operations management is an area of management concerned with overseeing. In business as in military affairs. The highest-level officers shape the strategy and revise it over time. Management. productivity analysis and cost control. strategic manufacturing policy. the boundaries between levels are not always distinct. designing. The relationship of operations management to senior management in commercial contexts can be compared to the relationship of line officers to highest-level senior officers in military science. and energy) into outputs (in the form of goods and/or services). particularly those relating to development. including operations management. production control. and manufacturing. According to the United States Department of Education. industrial labor relations and skilled trade’s supervision. manufacturing and production systems. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed.C. systems analysis. Operations management programs typically include instruction in principles of general management. rational analysis. Operations management studies both manufacturing and services. while the line officers make tactical decisions in support of carrying out the strategy. production. equipment maintenance management. is like engineering in that it blends art with applied science. Post office queue. and individual people often move between roles over time. labor. tactical information dynamically informs strategy. People skills. Ford Motor car assembly line: the classical example of a manufacturing production system. and effective in terms of meeting customer requirements. when Sumerian priests developed the ancient system of recording . It is concerned with managing the process that converts inputs (in the forms of raw materials. creativity. factory management.

the extent to which the division is carried out varied considerably depending on period and location. by about 370 B. This hierarchical organization in which people were divided into classes based on social position and wealth became known as the feudal system. and craft guilds. and control in large projects such as the construction of the pyramids. meaning that parts of a given gun were fitted only for that particular gun and could not be used in other guns. each product (e. consisted of two types: merchant guilds. kings and queens ruled over large areas of land. The guild system. organization. Shoemakers. Loyal noblemen maintained large sections of the monarch’s territory. artisans contributed to economic output and formed guilds. The next major historical application of operation systems occurred in 4000 B.C.3 inventories.. labor was being specialized in China. Compared to the middle Ages. Although guilds were regulated as to the quality of work performed.C. were prohibited from tannin hides. By 1100 B. Up to this point in history of manufacturing. 1568 In the middle Ages. Interchangeability of parts allowed the mass production of parts independent of the final products in which they will be used. the Renaissance and the Age of Discovery was characterized by a greater specialization in labor. It was in the late eighteenth century when Eli Whitney popularized the concept of interchangeability of parts when he manufactured 10. In the feudal system. It was during this time that the Egyptians started using planning. one of characteristics of growing European cities and trade.C. taxes.g. which made goods. In 1883. Xenophon described the advantages of dividing the various operations necessary for the production of shoes among different individuals in ancient Greece. He developed the scientific study of productivity and identifying how to coordinate different tasks to eliminate wasting of time and increase the . the resulting system was rather rigid. servants produced for themselves and people of higher classes by using the ruler’s land and resources. operating mainly between 1100 and 1500. each gun) was considered a special order. for example. Frederick W. Taylor introduced the stopwatch method for accurately measuring the time to perform each single task of a complicated job.. Although a large part of labor was employed in agriculture. shoemakers. loans. and business transactions.000 muskets. The industrial revolution was facilitated by two elements: interchangeability of parts and division of labor. Division of labor has always been a feature from the beginning of civilization. who bought and sold goods.

and service systems. intelligent systems. and the World Wide Web has opened new opportunities for operations. and Lillian M. Smith pin manufacturing in the Wealth of Nations (1776) or Brunel's Portsmouth Block Mills (1802).g. the development of faster and smaller computers.4 quality of work. The foundation of PMTS was laid out by the research and development of Frank B. Recently. Gilbreth around 1912. as well as fields of operations research and management science (as multi-disciplinary fields of problem solving). manufacturing. During World War II. operations researchers concentrated on solving specific and focused problems. Ransom Olds was the first to manufacture cars using the assembly line system. The Gilbreths took advantage of taking motion pictures at known time intervals while operators were performing the given task. PMTS has gained substantial importance due to the fact that it can predict work measurements without actually observing the actual work. and integrating them to predict the time needed to perform a simple task. production. but Henry Ford developed the first auto assembly system where a car chassis was moved through the assembly line by a conveyor belt while workers added components to it until the car was completed. This was supported by the development of academic programs in industrial and systems engineering disciplines. The synergy of operations research and systems engineering allowed for the realization of solving large scale and complex problems in the modern era. The idea of the production line has been used multiple times in history prior to Henry Ford: the Venetian Arsenal (1104). turning the left wrist by 90°). Malakooti (2013) states that production and operation systems can be divided into five phases:    Empiricism (learning from experience) Analysis (scientific management) Synthesis (development of mathematical problem solving tools) . Work sampling is used to measure the random variable associated with the time of each task. PMTS allows the use of standard predetermined tables of the smallest body movements (e. While systems engineering concentrated on the broad characteristics of the relationships between inputs and outputs of generic systems. the growth of computing power led to further development of efficient manufacturing methods and the use of advanced mathematical and statistical tools. The next generation of scientific study occurred with the development of work sampling and predetermined motion time systems (PMTS).

you’ll probably have to work with operations people during your career. so having some operations knowledge can help this team make good decisions. you need to evaluate the individual process in the context of the overall system of processes it connects to. This almost always makes more economic sense than building a new plant. Forbes magazine reported in 2011 that about three quarters of all CEOs came from an operations background. Even if you don’t want to be a CEO or ever work in operations. knowing what this means tells you the intent is to increase the capacity of an existing operation. marketing. Not all these CEOs studied operations in school.5   Isolated Systems with Single Objective (use of Integrated and Intelligent Systems. and WWW) Integrated Complex Systems with Multiple Objectives (development of ecologically sound systems. It also makes it easier to evaluate costs and benefits of the investment. only some of them did. That doesn’t always translate to being great with operations. and engineers without operations training can — and do! — waste millions of dollars when tasked to oversee operations. For maximum benefit. For instance. considering individual preferences) Why Operation management important to organization: Operations management is a fundamental part of any organization. Many majored in finance. Finance: Corporate finance folks exercise oversight over budgets. information systems. Operations analysis is both quantitative and intuitive. . when an operations leader asks for money to de-bottleneck a process. So some operations knowledge can help engineers place their analysis of an individual process into an overall context of the operations system. So consider these facts about the impact of operations on various business functions like Engineering: Engineers are notoriously great with numbers and focus. In fact. environmentally sustainable systems. or engineering and ended up in operations at some point in their careers.

Knowing the core principles of operations can help these folks build an operations superhighway instead of paving a cow path. they need to talk to operations to find out whether it can be produced profitably. privatized network where customers shop around for services. with such approaches as small scale continuous improvement processes and the large scale radical redesign of processes. for example. is directly affecting productivity and measures of efficiency. the Dutch telecommunications company Philips Business Communication Systems (PBCS). the greater the efficiency. They seek to cut inputs (space cost) and to boost the output of traveling accountants. There’s a great temptation to simply automate an existing process with imbedded inefficiencies. the ratio of output to input. Information technology (IT): A big part of IT within some companies is to automate operations. you may suspect it’s like spending money to put paint on an old jalopy. Companies tend to easily accept the traditional way of doing things without question. Take. The higher the numerical value of this ratio. To improve productivity: A measure of efficiency: Productivity.6 Otherwise. Some knowledge of operations may help IT professionals to more effectively partner with operations management people to truly create competitive advantage by improving processes while they automate. Ernst & Young managers use “hoteling” to affect to affect both parts of this ratio. Recently it has found itself in a competitive global economy and a deregulated. Marketing: When the marketing folks come up with a new product idea or promotions concept. is a measure of a manager’s or an employee’s efficiency in using the organization’s scarce resources to produce goods and services. A total Quality approach to operations improvement: The quality movement. When David Kynaston became managing director of the . PBCS was long sheltered by import barriers and captive government contracts. If the answer is no — operations managers are sometimes a grumpy lot — persuading them to find a solution may be easier if marketing can speak the language of operations and understand their concerns.

Importance of Production Function and Production Management: Successful organizations have well defined and efficient line function and support function. and profits had declined to the point where the parent company. Philips Electronics. And this can be achieved by healthy and productive association between Marketing and Production people. could no longer support the company. Production by assembly: Car production and computer are example of production by assembly. Annealing process (heating at high temperatures and then cooling). A classic example of separation or extraction is Oil into various fuel products. Production by modification or improvement: It involves change in chemical and mechanical parameters of the raw material without altering physical attributes of the raw material. is example of production by modification or improvement. Production and OPM: Production is a scientific process which involves transformation of raw material (input) into desired product or service (output) by adding economic value. . Production comes under the category of line function which directly affects customer experience and there by future of organization itself.7 company in 1990 be found much in need of change: Poor service had damaged sales. Aim of production function is to add value to product or service which will create a strong and long lasting customer relationship or association. Production can broadly categorize into following based on technique: Production through separation: It involves desired output is achieved through separation or extraction from raw materials. Marketing function people are frontline representative of the company and provide insights to real product needs of customers.

aggregate planning. Operations Management: As to deliver value for customers in products and services. including process design and management. scheduling. capacity and inventory management. How to use the Operation management to the organizations for getting good results for the customer’s satisfaction In ERP: An ERP system incorporates many operations management topics. Production Management v/s Operations Management A high level comparison which distinct production and operations management can be done on following characteristics: Output: Production management deals with manufacturing of products like (computer. Customer Contact: There is no participation of customer during production whereas for services a constant contact with customer is required. etc) while operations management cover both products and services. Operations management captures above identified 3 points. and project management. quality control. Usage of Output: Products like computer/car are utilized over a period of time whereas services need to be consumed immediately Classification of work: To produce products like computer/car more of capital equipment and less labor are required while services require more labour and lesser capital equipment. including purchasing the system and . Production management and operations management both are very essential in meeting objective of an organization. car. ERP systems require significant investments. but beware of the silver bullet perception. An ERP system has many advantages. it is essential for the company to do the following:            Identify the customer needs and convert that into a specific product or service (numbers of products required for specific period of time) Based on product requirement do back-ward working to identify raw material requirements Engage internal and external vendors to create supply chain for raw material and finished goods between vendor → production facility → customers.8 An effective planning and control on production parameters to achieve or create value for customers is called production management.

9 then implementing and maintaining it. redesign your processes. and you can handle data management in a much simpler and inexpensive way. some process re-engineering and communication across the organization can do the trick. We recommend the following steps for implementing a successful ERP system: Assess your needs: Do you really need such a sophisticated system? The system itself won’t fix all the problems of an organization. evaluate and. remember that the outputs are only as good as the data going in. Customize your software: ERP vendors offer highly standardized software. inefficient processes. Many companies underestimate the amount of time and money involved with implementing and maintaining an ERP system. unsophisticated systems to manage their ERP needs. sales data in one department is different from sales data in another — then the software system isn’t going to produce accurate data for the company. Before investing in an ERP system. If different departments are operating on different sets of data — say. One of the major concerns companies have about . typically with optimized modules for particular industries. Many world-class manufacturing and service operations use relatively simple. Often. Acquire and verify consistent data: When you begin populating an ERP system with data. Fix your processes: Implementing an ERP system won’t fix broken. if needed.

Many companies find themselves locked into their current processes to avoid the time and money needed to update their software.  . When setting up an ERP. It is a good fact that the operations management is the core of the every department of the organization. from the raw material to the finished good it plays a vital role so it is not possible to satisfy the customers. This inhibits process innovation within a company because deviating from the ERP’s process ends up requiring many software work-around. Avoid stagnation by developing a good relationship with your software provider.10 implementing an ERP system is that it locks the company into standardized processes. Train your employees: Employees must understand the purpose of the system and how to input data and interpret the reports that the system generates. When customizing software to accommodate an improved process. make sure the system can accommodate process improvements from Step 2 and not force you into the standard processes that have been built into its software. be sure your competitors don’t get ahold of the same programs and eliminate any competitive advantage you’ve gained. and changing processes almost certainly involves modifications to ERP software. Summary: If we talk about the OM in the organizations so we can suggest that the basic of today’s business. Continuously improve your processes: Continuous improvement is the heartbeat of all successful companies.