What is Operations Management - Assignment Example

Five Essay Questions-Operations Management Five Essay Questions-Operations Management Question One Operations management (OM) is the management concept concerned with the planning, designing, leading and controlling of products, services and processes from throughout the supply chains. This definition emphasizes the significance of OM, which can be viewed as supplementing the rest of an organization’s activities. The significance of OM is that it aims at ensuring processes work effectively and efficiently. In the manufacturing and service industries, a sound knowledge of OM is essential to any business organization. Essentially, this is because processes dictate that organizational resources are integrated to a high degree with the workforce’s and supply chains’ capabilities. That is the only way an organization can get its resulting products and services to the right market and in the right manner while considering the time and cost aspects of the processes. It is through the knowledge of OM that an organization develops its innovation towards competitive advantages, which exist inextricably alongside processes. The processes range from the use of emerging and appropriate technology to the use of existing resources to create new ones and new values. It is only when operations are managed in ways that create the notion of differentiation that such processes lead to organizational success (Chase, Jacobs & Aquilano, 2007). Question Two CPM/PERT analyzes the tasks involved in a certain project in terms of the required time to complete each. The use of CPM/PERT techniques for managing projects is founded on the concept that a certain set of critical activities that constitute the longest path through the network of activities will control the entire project. The identification of the critical activities is important because they can then be assigned to responsible teams, allowing the management resources to be used optimally by concentrating on the key activities that determine the entire project’s fate. As a statistical tool, its design is intended to map, schedule and manage complex projects and analytically represent the necessary tasks to complete a project, employing time as the variable reflecting planned performance specifications. Advantages of CPM/PERT techniques include defining dependencies and making them visible and also potentially reducing project duration. This is possible because precedence relationships between the structures of work breakdown are better understood, facilitating the potential to reduce a project’s lifecycle. However, the disadvantage is that individual dependency relationships can occur in their hundreds or even thousands, and the concept is not scalable easily for relatively small projects. Further, the network charts are usually large and require numerous pages of paper that is specifically sized in order to print (PMA, 2013). Another technique that might be chosen to manage a project is the Time-Scale Arrow Diagram, which offers clearer and quicker visualization and communication alongside greater flexibility. It is also cheaper and faster to prepare. Question Three In a manufacturing plant, economies of scale (ES) typically refer to the cost advantage realized due to the scale or output of operations. When more service or goods units are produced on a larger scale and input costs remain relatively low, it can be deemed that ES are achieved. Essentially, as the production units of a manufacturing plant grow, it will have better chances of decreasing its costs, which is facilitated by division of labor and specialization. Although employees are able to improve their job performance skills over time, the concept of ES cannot last forever because inefficiencies occur within the manufacturing plant and the industry at large. This gives rise to the notion of diseconomies of scale (DS), which occurs when production proportions are less than the inputs. For example, inefficient labor or managerial policies could lead to an increase in production costs that are not mirrored in the outputs. (Shalev & Asbjornsen, 2010). The optimal size of a plant might be decided by understanding the different sources of ES and DS and balancing them. This will ensure that the average decision-making cost is minimized and create greater efficiency. For instance, increasing operations scales will decrease the cost of inputs but, on the other hand, could cause DS if the resultant widened network is rendered inefficient by poor transport. Therefore, striking a balance is imperative. Question Four The three most important issues in supply chain management (SCM) are sourcing and production issues: procurement issues; and customer, market and government change issues. At the production phase, the production cost viewed relative to the potential profit is the manager’s key concern. This calls for the managers to use reliable manufacturers who will observe timelines and product quality as well as quantity. At the phase of sourcing and procurement, SCM is expected to find suppliers of raw materials. Managers are charged with the responsibility of finding suppliers capable of delivering the materials in the exact amount at the right time and best cost. They must have potential substitute suppliers or a plan for changes in product design when the key supplier does not deliver while all the time considering the health implications on consumers arising from certain raw materials. The customer, market and government change issues are important because unlike the rest, they deal with external factors affecting the supply chain. For example, when customers notice defects in products or complain about service delivery, it is up to the managers to respond swiftly and make amendments in the supply chain. Further, it is also their responsibility to ensure compliance with laws that apply directly to products by altering the supply chain (Klastorin, 2003). Question Five From the way inventories protect businesses against uncertainties and facilitate efficient material processing, handling and transit, it is evident that they are necessary (PMA, 2013). For example, lead-time and demand uncertainty need safety or buffer stocks. With an increase in uncertainty levels of demand and supply, the safety stocks must also be increased. Therefore’ keeping inventories will protect businesses against unanticipated increase in demand or failure in supply. Inventories help in saving time in the sense that one is able to keep track of the products they have on order and on hand, eliminating the need of having to make recounts when products have to be moved. A sound inventory will also point out slow-moving products or dead stocks, which will inform a business owner where to best use his capital rather than wasting it on such products. On the other hand, holding inventories can be disadvantageous because it could be a pointer that the business is struggling to turn it over and make sales. Then, financing the purchase of inventory is costly, which is further compounded by holding it. There are associated costs of labor to manage the inventory, insurance against damage or loss and space to hold it. References Chase, R., Jacobs, F., & Aquilano, N. (2007). Operations management for competitive advantage. New York: McGraw. Klastorin, T. (2003). Project management: Tools and trade-offs. London: Wiley. Project Management Institute (PMA). (2013). A guide to the project management body of knowledge. New York: Author. Shalev, M., & Asbjornsen, S. (2010). Electronic reverse auctions and the public sector: Factors of success. Journal of Public Procurement, 10(3), 428-452. Read More