The Production and

Operations Function
OM/TQM CHAPTER 1
Learning Objectives
• Define and explain the contribution of production to a society’s well-being
• Define and explain the functions of operations management as it relates to
production management system
• Identify and explain the basic responsibilities of individuals engaged in
production and operations management
• Understand and relate the operations management decisions in the
acquisition, production and distribution of goods or services.
Production
The processes and methods used to transform tangible
inputs (raw materials, semi-finished goods, subassemblies)
and intangible inputs (ideas, information, knowledge) into
goods or services. Resources are used in this process to
create an output that is suitable for use or has exchange
value.
Operations Management
Operations management is the activity of managing the resources which are
devoted to the creation and delivery of services and products. It is one of
the core functions of any business, although it may not be called operations
management in some industries.
Operations management is concerned with managing processes. And all
processes have internal customers and suppliers. But all management
functions also have processes. Therefore, operations management has
relevance for all managers.
Importance of OM
Operations management uses the organization’s resources to
create outputs that fulfil defined market requirements. This is
the fundamental activity of any type of enterprise.
Operations management is increasingly important because
today’s business environment requires new thinking from
operations managers.
Input – Transformation – Output Process
Input to the Process
• Materials – operations which process materials
could do so to transform their physical properties
(shape or composition, for example).
• Information – operations which process information
could do so to transform their informational
properties (that is the purpose or form of the
information); accountants do this.
• Customers – operations which process customers
might change their physical properties in a similar
way to materials processors: for example,
hairdressers or cosmetic surgeons.
Examples of operations with their dominant transformed resources
Output from the Process
Products and services are different. Products are usually tangible things,
whereas services are activities or processes. A car or a newspaper or a
restaurant meal is a product, whereas a service is the activity of the
customer using or consuming that product. Some services do not involve
products. Consultancy advice or a haircut is a process (though some
products may be supplied in support of the service, such as a report or a
hair gel). Also, while most products can be stored, at least for a short time,
service only happens when it is consumed or used. So accommodation in
an hotel room, for example, will perish if it is not sold that night; a
restaurant table will remain empty unless someone uses it that evening.
Value of Customers
Customers may be an input to many operations, but they are also the
reason for their existence. If there were no customers (whether business
customers, users or consumers), there would be no operation. So it is
critical that operations managers are aware of customer needs, both
current and potential. This information will determine what the operation
has to do and how it has to do it (the operation’s strategic performance
objectives), which in turn defines the service/product offering to be
designed, created and delivered.
Model of Operations Management
Generic Skills of an
Operations Manager
• Enjoys getting things done
• Understands customer needs
• Communicates and motivates
• Learns all the time
• Committed to innovation
• Knows their contribution
• Capable of analysis
• Keeps cool under pressure
Classification of Activities
• Directing the overall nature and strategy of the operation. A general understanding of
operations and processes and their strategic purpose and performance, together with an
appreciation of how strategic purpose is translated into reality, is a prerequisite to the
detailed design of operations and process
• Designing the operation’s services, products and processes. Design is the activity of
determining the physical form, shape and composition of operations and processes together
with the services and products that they create
• Planning and control process delivery. After being designed, the delivery of services and
products from suppliers and through the total operation to customers must be planned and
controlled
• Developing process performance. Increasingly it is recognized that operations managers, or
indeed any process managers, cannot simply routinely deliver services and products in the
same way that they always have done. They have a responsibility to develop the capabilities
of their processes to improve process performance
Operations Managers and some Decision Making
responsibilities
• Human resource management – the people employed Decision making is a central role of all operations
by an organization either work directly to create a managers. Decisions need to be made in:
good or service or provide support to those who do. • designing the operations system
People and the way they are managed are a key • managing the operations system
resource of all organizations. • improving the operations system.
• Asset management – an organization's buildings,
facilities, equipment and stock are directly involved in The five main kinds of decision in each of these
or support the operations function. relate to:
• Cost management – most of the costs of producing • the processes by which goods and services are
goods or services are directly related to the costs of produced
acquiring resources, transforming them or delivering • the quality of goods or services
them to customers. For many organizations in the • the quantity of goods or services (the capacity of
private sector, driving down costs through efficient operations)
operations management gives them a critical • the stock of materials (inventory) needed to
competitive edge. For organizations in the not-for- produce goods or services
profit sector, the ability to manage costs is no less • the management of human resources.
important.
Careers in Operations
Management
• Deputy Manager Manufacturing
• Associate Product Manager
• Operations Manager
• Supply Chain Functional Analyst
• Sourcing Specialist
• Supplier Risk Manager
• Functional Consultant
• Analyst Operations Advisory
Services
 Deputy Manager
A deputy manager manufacturing is responsible for
planning, managing, and executing manufacturing
operations. They are also accountable for ensuring the
execution of the manufacturing process is prioritized in
accordance with the process workflow and schedule. Since
deputy manufacturing managers are responsible for the
production process, they are also required to inspect
production equipment to prevent any malfunctions
regularly. If they do identify any issues, they are required
to report the operational or maintenance problems to avoid
delays in production.
 Associate Product Manager
An associate product manager participates in the
creation of new products and features right from
ideation to launch. Their prime responsibility includes
gathering product requirements and suggesting
product enhancements to improve user experience.
They are also required to be familiar with market
research and competitor analysis to identify market
needs accurately. They also need to monitor and report
consumer reactions after a product is launched.
 Operations Manager
Operations managers have varied responsibilities and
are, therefore, a senior position. The duties vary based
on the company and the product or service they offer.
However, there are a few responsibilities that are
universal across industries. An operations manager is
liable for identifying operational inputs, processes,
outputs, and feedback. With the information they
gather, they are also accountable for transforming
processes to improve operational systems and policies
to support the organization's target.
 Supply Chain Functional Analyst
The primary duty of a supply chain functional analyst is
to deliver projects in the supply chain division by
focusing on planning, fulfillment, manufacturing,
sourcing, & procurement. A supply chain functional
analyst does this by leveraging Supply Chain Packaged
Solutions in improving the client's business
performance. Many supply chain functional analysts are
required to have an understanding of tools like SAP,
Oracle, JDA, Kinaxis, etc.
 Sourcing Specialist
Sourcing Specialist’s task is to develop both short and
long-term sourcing plans by benchmarking all suppliers,
contracts, and services associated with delivering
services. Provide evaluations of suppliers’ (product and
services) capabilities and how they relate in the
competitive landscape .The sourcing specialist has to
lead supplier development and sourcing activities in
supplier selection and qualification for assigned products
& services. One has to continuously drive supplier
productivity, quality and services to improve supplier
performance and meet business operation targets.
 Supplier Risk Manager
Supplier Risk Manager is expected to conduct a supplier risk
assessment for Operational risk, Information security risk and
reputational risk for a supplier before on-boarding. Maintain
supplier compliance in terms of local regulations and company
policies/processes. Partner with stakeholders to identify
opportunities within the Organization for new initiatives, support
the sourcing team to execute special & simplification projects
based on stakeholder requirements to meet Quality standards &
timelines. Gather information on the market trends and current
market price points, create information repository & share the
latest insights with the management, use the market
benchmarks of other large organizations in order to improve
current price points
 Functional Consultant
A functional consultant may be assigned responsibility for a
specific functional vertical or client-specific tasks. Given the
complexity, it requires the delivery of specific capability in
Technology Consulting. A functional consultant needs to
understand Business Requirements and Needs and accordingly
support application design, develop functional/process
documents, Build, test and deliver solutions. A functional
consultant is responsible for Functional specification creation,
functional Unit Testing, Test Data Creation & Test scripts
creation and execution. A functional consultant has to adhere to
defined processes and tools while performing day-to-day
operations
Analyst Operations Advisory Services
Analyst Operations Advisory Services is expected to
support in building and executing innovative solutions
for delivery excellence at an optimized delivery cost.
Business operations analysts are in charge of
conducting extensive, accurate analyses of their
organization's existing business operations. Their main
duties include gathering data and developing solutions
to meet business needs. They also analyze cross-
departmental business processes for efficiency.
 End of
Chapter 1