What is OM(OPERATION

MANAGEMENT)?
• OM refers to the direction and control of the
processes that transforms inputs into
finished goods and services.
 Jewelery store
• Inputs
- Merchandise
-Store building
- registers
- jeweler
- customer
Process
- Merchandise display
Output
- Sales
 OPERATION MANAGEMENT AS A SET OF
DECISIONS

• Transform resources
• Micro-operations or the internal customer
concept: each micro-operation should
identify its internal customers and internal
suppliers
• Business process reengineering
 Buffering the operation

• The turbulent environment in which most

organizations do business means that the
operations function is having to adjust
continually to changing circumstances
• physical buffering
• buffering organizational
• Physical buffering – designing an inventory
or stock of resources either at the input side
of the transformation process or at the
output side
• Organizational Buffering– allocating the
responsibilities of the various functions in
the organization so that the operations
function is protected from the changing
environment by other functions.
 How are operations different from each
other?
• Volume – how many products or services are
made by the operation?
• Variety – how many different types of products or
services are made by the operation?
• Variation – how much does the level of demand
change over time?
• Visibility – how much of the operation’s internal
working are ‘exposed’ to its customers?
 What responsibilities do operations managers
have?

• Direct responsibilities – the activities which are

directly related to producing and delivering
products and services
• Indirect responsibilities – the activities involved in
interfacing with other parts of the organization.
• Broad responsibilities – a wider set of tasks that
involve scanning the business, social and political
environment in which the organization exists in
order to understand its context
 OM is……
• Operation management is the management
of an organization’s productive resource or
production system, which converts input
into the organization products and services.
 IMPORTANCE OF OPERATIONS IN
RETAIL

• Retail operations concerns the work that

individuals do to keep a retail store
functioning. It includes like:
• Optimal Format and Size of the store.
• What is the relationship among shelf space ,
Shelf location and sales for each item in the
store.
.
• How would the total sales changes by
varying the space allocation and shelf
locations.
• Would increased staffing will improve the
productivity.
• What impact would the use of self services
versus sales personnel have on the sales of
each productivity.
• .
• How can inventory be managed
appropriately.
• How can inventory losses due to the theft be
reduced by customers or employees.
• What levels of insurance are required.
• How can credit transactions be managed
most effectively.
• How can IT systems improve the operating
efficiency.
• What kind of crisis management plan
should be in the place.
• How to improve the aesthetic appeal of the
product and create a better store image with
the help of visual merchandise.
 OBJECTIVES OF STORE OPREATIONS

• Store operations could be seen from four

perspectives. Effectively Managing:-
• Customer
• Inventory
• Sales
• Space
 Challenges of OM
• Productivity improvement
• Competition
• Rapid technological change
• Ethical issues
• Workforce diversity issues
 Manufacturing Organization
• Physical, durable products
• Output can be inventoried
• Low customer contact
• Long response time
• Large facilities
• Quality easily measured
 Service organization
• Intangible
• Output cannot be inventoried
• High customer contact
• Short response time
• Small facilities
• Quality not easily measured
 IKEA operations
• World largest retailer of home furnishing
• 100 stores
• Low cost while high quality( Operation
strategy)
• Customer assemble the product( Process
management)
• Centralized Supply chain
• e.g: Back and seat of chain from Poland
while legs are from France
• 1800 supplier in 50 countries through 14
large warehouses