OPERATIONS

MANAGEMENT
BY PROF. MD. ABDUL RAZAQUE
IMPORTANCE OF OPERATIONS
MANAGEMENT
Marketing IS Finance

Current Financial
operating Capital investments planned measures
Customer demands
capabilities
Information
Customer feedback Inventory levels needs Capital requirements Budgets
Output rates
Need for new products Technological
Capacities capabilities Stockholder
requirements

Operations
Management

Operations Labor skills

Billing information capabilities available
Product specs Labor
Current requirements Labor
Process Design
performance Technological costs
improvements requirements
measures trade-offs

Human
Accounting Engineering Resources
OPERATIONS AS SERVICE

 Definition: It is defined as the design, operation, and

improvement of the systems that create and deliver the
firm’s primary products and services.
OPERATIONS AS SERVICE

 In manufacturing, services can be decided into two

categories: core services and value-added services.
 Core Services: Components of core service are quality,
flexibility, speed and price.
 Value-added service: In case of external customer, it
makes their life easier and in case of internal customers,
it helps them to carry out their functions smoothly.
OPERATIONS AS SERVICE

 Components of value-added services

 Information: It is the ability to furnish critical data on
product performance, process parameters, and cost to
internal departments and to external customers, who
use the data to improve their own operations or
products.
 Ex – Providing quality datasheet to field sales and service
personnel.
OPERATIONS AS SERVICE

 Problem – Solving: It is the ability to help internal and

external groups solve problems, especially in quality.
 Ex – Raritan Corporation, a metal rod fabricator, sends
factory workers with salespeople to troubleshoot quality
problems.
 Sales Support: It is the ability to enhance sales and
marketing efforts by demonstrating the technology,
equipment or production systems the company is trying
to sell.
 Ex – Eureka Forbes
OPERATIONS AS SERVICE

 Field Support: It is the ability to replace defective parts

quickly or to replenish stocks quickly to avoid downtime
or stockouts.
 Ex – Caterpillar, The Limited
RESPONSIBILITIES OF AN OPERATIONS
MANAGER
 Policy Formulation: Companies must operate and
function on a daily basis within a prescribed set of
guidelines.
 Policies can also include disciplinary actions taken when
employees break company rules.
 Planning: Operations managers tend to determine
which products are bought and sold, what prices they
are bought or sold for and to whom they will be
marketed.
 RESPONSIBILITIES OF AN OPERATIONS
MANAGER
 Controlling Resources: Operations managers oversee the
implementation of payroll policies and procedures, how much
employees are paid, how funds are allocated for benefits
packages and how other funds are spent to keep the company
operating smoothly on a day-to-day basis.
 Communication: Operations manager has to communicate with
other management professionals within the organization to keep
the company running smoothly, and communicating with other
companies and organizations with which the company does
business.
 They also put together reports and financial statements that are
essential for other top executives within the company or
organization.
OPERATIONS STRATEGY

 It involves decisions that relate to the design of a process

and the infrastructure needed to support the process.
 It is concerned with setting broad policies and plans for
using the resources of a firm to best support its long – term
competitive strategy.
 Process design includes selection of appropriate
technology, sizing the process over time, role of inventory
in the process and locating the process.
OPERATIONS STRATEGY

 Infrastructure decision involves the logic associated with

the planning and control systems, quality assurance and
control approaches, work payment structures and
organization of the operations function.
 It can be viewed as part of a planning process that
coordinates operational goals with those of the larger
organization.
COMPETITIVE DIMENSIONS

 Cost or Price
 Quality: Design quality and process quality.
 Design Quality: It relates to the set of features which the
product or service contains. Ex - Bicycles
 Process Quality: It relates to the reliability of the product.
 Goal is to produce defect-free products or service
 Adherence to specifications.