PRODUCTION/OPERATIONS MANAGEMENT
Operations and Human Resource Management
Management
– The art of getting things done with and through
other people.
Operations Management
– The administration of the production process and
its related activities is referred to as operations
management of a business enterprise.
Task of Operations Manager
 Oversee the resources available to the enterprise
for production activities
 Supervises the process of combining materials
together with inputs according to the technology
utilized to produce the identified output.
 The manager assesses the performance of
production in terms of effectiveness, efficiency,
quality, timeliness, dependability, flexibility, costs
and other criteria
RELATED ACTIVITIES ATTACHED TO
OPERATIONS MANAGEMENT
Warehousing
– The company can buy materials in bulk and
secure the stability of the next production round.
Maintenance
– It ensures the continuous productivity of the firm’s
capital equipment.
Inventory Management
– Not all outputs produced currently are sold
immediately to the customers; a portion is kept by
the firm as reserves or inventories.
Quality Control
– Mechanisms are instituted to assure customers of
the firm that its products are consistent and reliable.
ASSESSING THE PERFORMANCE OF A
BUSINESS ENTERPRISE
Two levels in evaluating the performance of a
business:
1. Performance effectiveness
– It indicates how the output of the firm was able to
achieve the objectives set by the business empire.
– A business is considered effective if it’s able to
produce the goods and services that it has planned
to produce.
Example:
> amount of production
> quality production
> relate it with the needs of the customers
Performance effectiveness can also be assessed in
terms of:
a. Quality – the product has fulfilled the minimum
requirements set by the market and regulatory
bodies.
b. Speed – refers to the punctual delivery of the
product to its customers
c. Dependability – is the consistency and
reliability of the product over several production
runs
d. Flexibility – the adaptability of the operations
of the company to changing market environments
2. Performance efficiency
– It denotes how the output of the firm was realized
through the use of resources. It involves the
monetary outlay in the use of inputs to produce a
good or service.
Inefficiency
– Very expensive in terms of the use of resources
– It can threaten its profitability and survival in the
market.
RESOURCE INPUTS
1. Materials
– are semi-processed goods that will be subjected
to further transformation in the production process.
They are also called raw materials or
intermediate inputs.
2. Manpower
– is the human resource input in the production
process. Manpower does not only include labor or
muscular power but also intellectual, creative
abilities, etc.
3. Machinery
– Represents all manmade physical capital used in
the production process (machines, tools, durable
equipment, physical plant).
4. Method
– Denotes the process of combining raw materials
and how these are going to be transformed using
the other factor inputs of production.
Factor inputs – are transforming inputs that will
process intermediate inputs into finished product.
Labor, manpower, capital and technology
5. Money
– is a financial resource used to purchase all the
resources needed by the firm for its operations.
PROCESS
– Refers to the various forms of transformation that
factor inputs perform in the materials
1. Physical transformation – occurs when the
processing of raw materials convert them into
significantly altered new product
2. Locational transformation – arises when a
product changes its location through various
means of transportation and communication.
3. Information transformation – happens when
knowledge and specialized skills of providers are
transmitted to their customers.
4. Exchange transformation – takes place when
a commodity is transmitted from the supplier to
its buyer.
5. Extractive transformation – happens when a
natural resource is taken out from its habitat.
OUTPUT
– Refers to the result of the production process
– The most important component of the IPO
framework since the goal of the production is the
realization of an output.
Outputs from physical transformation:
food grains, furniture, cars electronic gadgets and
other manufactured goods
Outputs from locational transformation:
taxi services, bus services, postal services,
telephone services
Outputs from exchange transformation:
retail services of sari-sari stores, supermarkets and
wholesale services
Outputs from extractive transformation:
gold ores, timber, logs, sand, seafood
Outputs from information transformation:
educational services, consultancy services, health
services, legal services and other professional
services
ORGANIZATION
– An organization is an open and social system that
transform inputs from environment to product
outputs.
ORGANIZATIONAL PLAN
– This is the section of the business plan that
identifies the form of ownership the business
venture will take.
– It provides a background of the management
team
ORGANIZATIONAL STRUCTURE
– The typically hierarchical arrangement of lines of
authority, communications, rights and duties of an
organization.
– The result of organizing process is an
organizational structure.
HUMAN RESOURCE MANAGEMENT
HRM
– Managers design the components of the HRM
system so that they are consistent with each other
and with the organization’s structure, strategies and
goals
– The goal of strategic HRM is to develop a human
resource management system that enhances an
organization’s efficiency, quality, innovation, and
responsiveness to customers (competitive
advantage).
– Plays a very important role in the organization
success. An organization needs to recruit the best
qualified people and train them to maximize their
full potential.
– According to Hollenbeck, et al (2006), human
resource management refers to the “policies,
practices and systems that influence employees’
behavior, attitudes, and performance.”
HRM PRACTICES
HR Planning – includes analyzing and designing
work, determining human resource needs
Recruiting – attracting potential employees
Selection – choosing employees
Training and Development – teaching employees
how to perform jobs and preparing them for the
future
Compensation – rewarding employees
Performance Management – evaluating their
performance
Employee Relations – creating a positive work
environment
– Effective HRM has been shown to enhance
company performance by contributing to employee
and customer satisfaction, innovation, productivity,
and development of a favorable reputation in the
firm’s community.