Ch1

Chapter Outline :

1. What is operation management?

2. Organizing to Produce Goods & Service.
3. Supply chain
4. Why Study OM?
5. The Heritage of Operation Management
6. Operation Good & Service
7. The Productivity Challenge
8. Current challenges in operation management
9. Ethics, Social Responsibility, and sustainability

1. What is OM?

Operations management (OM) is the administration of business practices to

create the highest level of efficiency possible within an organization. It is
concerned with converting materials and labor into goods and services as
efficiently as possible to maximize the profit of an organization. Operations
management teams attempt to balance costs with revenue to achieve the
highest net operating profit possible.

Operations management involves utilizing resources from staff, materials,

equipment, and technology. Operations managers acquire, develop, and
deliver goods to clients based on client needs and the abilities of the
company.
EXAMPLE : McDonald’s Corporation’s operations management (OM)
supports the company’s position as the largest fast food restaurant chain in
the world. The 10 decisions of operations management represent the
various strategic areas of operations that must be coordinated for optimal
productivity and performance. Design of Goods and Services, Quality
Management, Process and Capacity Design, Location Strategy, Layout
Design and Strategy, Job Design and Human Resources, Supply Chain
Management, Inventory Management, Scheduling, and Maintenance

Three dimensions of operational strategy process : Value, Varieties,

Variations. Performance objectives : Quality, Speed, Dependability,
Flexibility, Cost.

2. Organizing to Produce Goods & Service :

Marketing, which generates the demand, or at least takes the order for a
product or service (nothing happens until there is a sale).

Production/operations, which creates, produces, and delivers the product.

Finance/accounting, which tracks how well the organization is doing, pays

the bills, and collects the money.
Operations management needs to be well integrated with other parts of
business. Operations management is one of 3 prime functions of Pizza Hut,
Finance ,Marketing, Operations.

For Example, Pizza Hut. Manager of operation is responsible to receive the

supplies of raw materials from Yum Dubai so he needs to have good
relations with account department (Finance) because for importing Raw
material from Yum. Inc he needs money which he can get from the finance
departments of Pizza Hut in Karachi. He is responsible to make sure that
they keep following the standard policies of Yum Inc. In this situation he
needs the help of the administration and the employees if the
administration provides incentives to the employees they will be motivated
and they will work for the success of Pizza Hut by following the roles of
Yum.

For supply raw material to the regional branches from their warehouse the
operation manager need the help of the stock management of the
warehouse to supply the raw material through fast means of transport.
For attracting customers for dishes, the operations manager requires a
good advertisement of the meals packages from Pizza Hut Marketing
Department.

3. Supply Chain :

Supply chain management is the management of the flow of goods and

services and includes all processes that transform raw materials into final
products. It involves the active streamlining of a business's supply-side
activities to maximize customer value and gain a competitive advantage in
the marketplace.

The process of a creative digital content supply chain consists of 5

components:

Demand planning:

What market and social signals are out there for you to capitalize on? Find
them, analyze them, and start creating content based upon them.

Production schedules:

Create a detailed plan and schedule for your content creation; think of it as
an editorial calendar and project plan all rolled up into one integrated
entity.

Blueprints:

By blueprints we refer to descriptions of how everything is connected –

how content elements map to content assets and how they in turn map to
distribution channels. The blueprints ensure your marketing efforts within
your digital content supply chain process will be orderly, efficient and
leveraged.

Bill of materials:
The bills of materials is a detailed list of required content elements and
artifacts, including their various formats and renditions, for publishing
across your desired channels.

Production:

The production of your content is the culmination of the previous steps

where you put everything into practice. This is where you look into
sourcing, approval and distribution of your digital content assets across
various paid, earned and owned channels.

Our digital and global era has given rise to several new challenges regarding
an organization’s content creation:

Quality: Usefulness and insightfulness

Speed : Time to create and deliver content

Cost: Resources, effort, skills, money

Relevance: Context, personalization,situational, versions

Availability: Time, coverage, case requirements

Formats: Channels, preferences, file types, encoding

Scale: Volume, critical mass, accommodate

Share & Re-use: Editing, re-configure, transcoding, package

Maintain: Long-life assets vs. short-life expenses

4. Why we study OM?

OM is one of the three major functions of any organization, and it is
integrally related to all the other business functions. All organizations
market (sell), finance (account), and produce (operate), and it is
 important to know how the OM activity functions. Therefore, we
study how people organize themselves for productive enterprise.
We study OM because we want to know how goods and services are
produced. The production function is the segment of our society that
creates the products and services ...

5. The Heritage of Operation Management

The field of OM is relatively young, but its history is rich and
interesting. Our lives and the OM discipline have been enhanced by
the innovations and contributions of numerous individuals. We now
introduce a few of these people, and we provide a summary of
significant events in operations management.
6. Current challenges in operation management

Streamlining processes

There is always something to improve in every aspect of the business. Even

if the company has been doing the same thing for years – same client,
customer, raw materials, and processing techniques – there will always be
areas that needs to be updated.

Consumer satisfaction

Guaranteeing customer satisfaction is one of the challenges in operations

management that must be prioritised and continuously monitored for
performance. Handling returns, investigating complaints, and responding to
concerns all have scores that count toward consumer approval.

Internal conflicts

Friction between employees or departments is one of the unavoidable

issues in operations management. It is your duty to de-escalate conflicts
and guide everyone to come to an amicable conclusion that all parties can
agree with.
Productivity concerns

One of the challenges in operations management you will continuously face

is to find ways to increase productivity. It is part of your responsibility to
push people to work better, faster, and with more efficiency, but the
burden lies on the method to do this.

Business continuity

The ongoing pandemic has brought new challenges in operations

management as it continues to upend existing processes and short- and
long-term targets. In situations like this, there is no leeway for indecision as
the organisation is given two simple choices: to evolve or to perish.

Integration of new technology

The adoption of new technology has often been the solution to the most
common issues in operations management, especially in the execution of
repetitive tasks. Your role is to fully understand the key features of the
technology that is to be implemented. Conduct in-depth research on its
potential advantages, future value, and the benefits it can provide to the
organisation.

Increase Productivity With Focos

Looking for tools that you and your team can use to answer the challenges
in operations management? Focos is a tool that increases productivity,
focus, and efficiency.

7. ethics social responsibility and sustainability in operation

management
The systems that operations managers build to convert resources
into goods and services are complex. And they function in a world
where the physical and social environment is evolving, as are laws
and values. These dynamics present a variety of challenges that come
from the conflicting perspectives of stakeholders, such as customers,
 distributors, suppliers, owners, lenders, employees, and community.
Stakeholders, as well as government agencies at various levels,
require constant monitoring and thoughtful responses.

Stakeholders Those with a vested interest in an organization,

including customers, distributors, suppliers, owners, lenders,
employees, and community members.

Identifying ethical ...

Ch2

Chapter Outline

1. A global View of operation and supply chains.

2. Developing Missions and Strategies
3. Achieving Competitive Advantage Through Operation
4. Issues in Operation Strategy
5. Strategy Development and Implementation
6. Strategic Planning, Core Competencies, and Outsourcing.
7. Global Operation Strategy Options

- A global View of operation and supply chains.

They simplify the buying process. They make it so easy to find
information about a product. They make the ordering process very
intuitive. They make shipping, delivery, and even returns incredibly
transparent and easy.
Also, They add to test the product by Through the 3D image feature,
you can see the product on your desk or on the sofa in your home
through the phone only. Therefore, Amazon has a vision in the
merging of peoples, cultures and lives, turning into a "one village" or
“Globalization” through social media that is used by smartphones.

- Developing Missions and Strategies.

A mission acts as a guide to decision-making for all levels of
management. As a broad goal of an organization, a mission justifies
an organization’s existence. It is a statement of an organization’s
reason to exist. It states what the company is providing to society. A
mission should define the organization’s line/lines of business,
identify its products and services, and specify the markets it serves at
present and shortly. It should be achievable, in writing, and have a
timeframe for achievement. Since a mission is a relatively permanent
part of an organization’s identity, it should be broad-based but
customer-focused.
With the mission established, strategy and its implementation can
begin. Strategy is an organization’s action plan to achieve the
mission.

Achieving Competitive Advantage Through operation

Achieving competitive advantage through operations is the way to

create customer value in an efficient and sustainable way. In
business, it is the attribute that allows firm to out perform its
competitors. This can be gained by offering customers same value as
its competitors but at lower price, or can charge higher price by
providing greater value through differentiation competing on
differentiation. In addition, organization can be more responsive
(competing or response). There are mainly three strategies which
provide an opportunity for operation manager to achieve
competitive advantage.

Competing on cost:
A company or firm competing on cost offers a relative low price to
stimulate demand and gain market share. Generally, organization
employs this low cost strategy when the product is similar with other
competitors with respect to physical characteristics and service
attributes. For example, Nepalese brand Goldstar shoes are now
competing on cost producing quality products at a lower price.

Competing on differentiation:
Differentiation is being different from others. It is a process of
distinguishing a product or service from others to make it more
attråctive to a target market. For example, in Nepal, Ace travel come
differentiates itself by providing travel ‘experience’, Ace travel com
engages the customer with continual basis and post. trip
questionnaire.

3.Competing on responses:

Responses is a set of values related to quick, reliable and flexible

performanċe. It is including the entire range of value related to
timely product development and delivery as well as reliable
scheduling and flexible performance.

Issues in Operation Management

As 2020 has been one of the most historical years to live through,
there are a series of strategic issues and challenges to overcome as
you seek to uphold your business. These strategic issues within
operations management include the following:

Health and Safety – Health and safety is a primary concern as of right

now – and more than likely will be one for a period of time.
Operations managers need to ensure that they are keeping up with
any new information pertaining to health or safety and take proper
precautions within their facility. This may even include hiring an
outside company to routinely clean the facility. By far, health and
safety needs to be a top concern in 2021.
Automation – Automation has been a primary concern and challenge
for many individuals that work within facilities. As management and
operations management is continuously looking to increase efficiency
within their operation, this may push frontline workers further and
further out of the picture, until essential they are unemployed. This
is an issue to especially consider during the coronavirus as facilities
may be looking more and more into automation and thus reducing
the amount of frontline workers.
Demand Changes – Demand changes are apparent during this time of
the coronavirus, as we have seen surges in demand for some
operations while other facilities have seen demand freefall. Being
agile in the sense that you are prepared in a moment’s notice of
potential demand changes is key when attempting to keep your
operation afloat. This may include changing up your demand strategy
or implementing new demand forecasting technologies.

- Strategy Development and Implementations

SWOT (strengths, weaknesses, opportunities, and threats) analysis is
a framework used to evaluate a company's competitive position and
to develop strategic planning. SWOT analysis assesses internal and
external factors, as well as current and future potential.
Strengths
Strengths describe what an organization excels at and what
separates it from the competition: a strong brand, loyal customer
base, a strong balance sheet, unique technology, and so on. For
example, a hedge fund may have developed a proprietary trading
strategy that returns market-beating results. It must then decide how
to use those results to attract new investors.

Weaknesses
Weaknesses stop an organization from performing at its optimum
level. They are areas where the business needs to improve to remain
competitive: a weak brand, higher-than-average turnover, high levels
of debt, an inadequate supply chain, or lack of capital.
Opportunities
Opportunities refer to favorable external factors that could give an
organization a competitive advantage. For example, if a country cuts
tariffs, a car manufacturer can export its cars into a new market,
increasing sales and market share.

Threats
Threats refer to factors that have the potential to harm an
organization. For example, a drought is a threat to a wheat-
producing company, as it may destroy or reduce the crop yield. Other
common threats include things like rising costs for materials,
increasing competition, tight labor supply. and so on.

- Strategic Planning, Core Competence, and Outsourcing

Strategic planning, is your organizations road map. It’s a defined
strategy for the organization that helps to clearly defines how your
nonprofit will achieve its mission. At its core, strategic planning is all
about setting goals, and putting your nonprofit in a position to reach
them.
Design
Before starting anything, it’s important you take a step back, and
realistically asses your nonprofit’s mission, external opportunities,
challenges, and even its strengths, and limitations.
Develop
Now that you’ve laid the ground work for your strategic plan, and
you understand what factors will limit and propel your organization
forward, it’s time to start developing your strategic plan.
To make sure your strategic plan is an actionable one, and not
another document that goes unused, take a few of these steps.

• Involve relevant people from both within and outside of your

organization. The more input you get from informed voices, the more
polished your document will be.
• Break your strategic plan into more manageable tasks. Breaking
down a major organizational plan into manageable tasks give your
nonprofit and its employees achievable intermittent goals.
• Stay realistic. While you should be thinking big, it’s important that
only things that are realistically achievable should go on your
strategic plan.
Implement
Now that you’ve drafted a strategic plan, it’s time to put that plan
into action, and implement your strategy into your organization.

Communicate your goals and ideas to the rest of the organization.

Make sure there is an open dialogue, and any questions that
employees might have can be shared either in an open forum, or in a
1-on-1 way. Consider drafting a version of the document in a more
user-friendly way with more bullet points and images.
Ch4

What is Forecasting?

Forecasting is determining what is going to happen in the future by

analyzing what happened in the past and what is going on now. It is a
planning tool that helps business people in their attempts to cope
with the uncertainty of what will might and might not occur.
Forecasting relies on past and current data and analysis of trends.

Short-range forecast: This forecast has a time span of up to 1 year

but is generally less
than 3 months. It is used for planning purchasing, job scheduling,
workforce levels, job assignments, and production levels.
Medium-range forecast: A medium-range, or intermediate, forecast
generally spans from
3 months to 3 years. It is useful in sales planning, production
planning and budgeting,
cash budgeting, and analysis of various operating plans.
Long-range forecast: Generally 3 years or more in time span, long-
range forecasts are used
in planning for new products, capital expenditures, facility location or
expansion, and research and development.

- The strategic importance of forecasting

Strategic forecasting makes the company’s operations sensitive to
market factors on a continuous basis. Companies can decide whether
to assign additional resources for corrective action, or to change their
strategies to reflect the new situation. In marketing and sales,
strategic forecasting is the use of benchmarks, historical data, and
other information and factors to make predictions about future
demand and sales growth. It’s better to identify and exceed realistic
targets based on solid data than it is to set your sales team up for
disappointment.

- Design of Goods and Services

Goods and service selection
Example : Toyota’s strategy is rapid response to changing consumer
demand. By executing the fastest automobile design in the industry,
Toyota has driven the speed of product development down to well
under 2 years in an industry whose standard is still over 2 years. The
shorter design time allows Toyota to get a car to market before
consumer tastes change and to do so with the latest technology and
innovations.

Just as operations managers must be prepared to develop new

products, they must also be prepared to develop strategies for new
and existing products

-Service design is the activity of planning and organizing people,

infrastructure, communication and material components of a service
in order to improve its quality and the interaction between the
service provider and its customers.