X-​OPS

Operations Management

 

  Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services.

This is core to any organization and all other functions are somewhat directly or indirectly related to Operations Management.This provides the backbone functional and strategic working of any organisation under consideration.

In today's world Operations Management plays an important role in shaping the core framework activities.

ABC: 

ABC analysis is a term which is often used to categorize inventory. This technique is used in material management. It is also known as Selective Inventory Control. Policies based on ABC analysis:

·         A ITEMS: very tight control and accurate records.

·         B ITEMS: less tightly controlled and good records.

·         C ITEMS: simplest controls possible and minimal records.

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B2B: 

Business-to-business.A business selling to other businesses.

B2C: 

Business-to-consumer.A business selling directly to consumers. 

 

Capacity Controls:

A revenue management component used to modify risk factors. Used in passenger travel, accommodation and tourism-related industries, a control is implemented to manage risks associated with overbooking.

 

Capacity Planning:
Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. A discrepancy between the capacity of an organization and the demands of its customers results in inefficiency, either in under-utilized resources or unfulfilled customers. The goal of capacity planning is to minimize this discrepancy.
Capacity can be increased through introducing new techniques, equipment and materials, increasing the number of workers or machines, increasing the number of shifts, or acquiring additional production facilities.

Capacity is calculated: (number of machines or workers) × (number of shifts) × (utilization) × (efficiency).

 

The broad classes of capacity planning are lead strategy, lag strategy, match strategy, and adjustment strategy.

 

·         Lead strategy is adding capacity in anticipation of an increase in demand. Lead strategy is an aggressive strategy with the goal of luring customers away from the company's competitors by improving the service level and reducing lead time. It is also a strategy aimed at reducing stock out costs. A large capacity does not necessarily imply high inventory levels, but it can imply in higher cycle stock costs. Excess capacity can also be rented to other companies.

·         Lag strategy refers to adding capacity only after the organization is running at full capacity or beyond due to increase in demand (North Carolina State University, 2006). This is a more conservative strategy. It decreases the risk of waste, but it may result in the loss of possible customers either by stock out or low service levels.

·         Match strategy is adding capacity in small amounts in response to changing demand in the market. This is a more moderate strategy.

·         Adjustment strategy is adding or reducing capacity in small or large amounts due to consumer's demand, or, due to major changes to product or system architecture.

 

Enterprise Resource Planning:
Enterprise resource planning (ERP) is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business processes of a company. ERP gives a company an integrated real-time view of its core business processes such as production, order processing, and inventory management, tied together by ERP applications software and a common database maintained by a database management system. ERP systems track business resources (such as cash, raw materials, and production capacity) and the status of commitments made by the business (such as customer orders, purchase orders, and employee payroll), no matter which department (manufacturing, purchasing, sales, accounting, and so on) has entered the data into the system. ERP facilitates information flow between all business functions inside the organization, and manages connections to outside stakeholders.

 

Inventory: 

It is the term used to describe the goods and materials that a business holds for the ultimate purpose of resale.
 

Inventory Control:
Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.

It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.

Inventory Management: 

It is a science primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods.

 

Inventory Planning:
It is the process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity. Inventory planning has a direct impact a company's cash flow and profit margins especially for smaller businesses that rely upon a quick turnover of goods or materials.

 

Lean Manufacturing:
It is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.

 

Operations Management (OM):
Operations Management is the function of managing the operating core of an organization. These include the activities associated with creation, production, distribution and delivery of an organization's goods and services.

The purview of OM ranges from strategic to tactical and operational levels. Representative strategic issues include determining the size and location of manufacturing plants, deciding the structure of service or telecommunications networks, and designing technology supply chains.

Tactical issues include plant layout and structure, project management methods, and equipment selection and replacement. Operational issues include production scheduling and control, inventory management, quality control and inspection, traffic and materials handling, and equipment maintenance policies.

 

Operational Performance:
Firm's performance measured against standard or prescribed indicators of effectiveness, efficiency, and environmental responsibility such as, cycle time, productivity, waste reduction, and regulatory compliance.