Understanding Production and Operations Management Understanding Production and Operations Management Introduction The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems. Production and operations management talks about applying business organization and management concepts in creation of goods and services. Production Production is a scientific process which involves transformation of raw material input into desired product or service output by adding economic value.
However, over the years I have seen it time and again. Strategy, although perceived by some as defined, is largely misunderstood across the organization, not tied-in to operations and therefore poorly executed in operations and as a result ignored as the hour-to-hour, crisis-to-crisis mode of management becomes more firmly entrenched.
Does your company have an operations strategy developed and being executed to carry the strategic plan? In all likelihood, the answer is no. The most common missing ingredient to success in companies I have seen over the years is a well-planned and defined action plan for improvement that is being consistently and constantly well-executed.
The symptoms can vary but, in essence, what is missing are: As a result, some functions within the company are often diametrically opposed to one another and operate in a way that makes meaningful business performance improvement nearly to outright impossible.
Companies need a way to focus and stay focused. They need, in effect, a well-defined and well-executed strategy and action plan. No strategic plan in and of itself can help a company change and move ahead to capture more market share, improve products, increase customer satisfaction, or whatever is recommended within the context of a strategy.
Effective strategic business planning requires a dynamic, methodical process that keeps the organization focused on the right issues and actions. This means management must diligently define and redefine the four essential components of a successful strategy and tactical actions: Strategic goals, which are brief statements of what top management wants to achieve in terms of growth, products, markets, profits and the like.
Improvement objectives, which are specific and measurable performance improvements set within certain timeframes and tied to specific strategic goals. Action plans, which translate objectives into a specific set of steps, responsibilities, schedules and cross-functional teams for implementing the plans to achieve the objectives.
Performance measures, which provide quantitative means of reviewing, evaluating and updating actions, improvement objectives, strategic goals, and process performance.
Done well and in concert, these four components allow an organization to think and manage strategically, to formulate objectives and action plans that mesh with strategic goals and to continually measure process performance results and to evaluate where there is need for further changes.
If a strategic plan is not translated and executed in this way, a company misses the opportunity to focus its entire organization on specific objectives and actions and to develop common values and beliefs. Taking these steps requires courage, confidence, hard work and persistence, but the rewards can be nothing less than a winning strategy for your company and a focus on vision and a common purpose for the entire organization.
Even if a company has actually developed objectives and actions plans for operations, it seldom has specific strategic impact results in mind. Operational goals are, instead, couched in traditional performance measures that may have no correlating connection to the right goals, objectives and action plans.
But an unarticulated, generic business strategy is just not good enough. In fact, it can be a critical mistake. Now, and in the coming years, operations can no longer be left in a reactive mode to respond to whatever whims that keep changing direction. Operations is clearly an area where profits can be made or lost.
It also involves developing new or modified objectives, action plans and measurements, whenever needed. Effective strategic operations planning must continually and systematically perform the following two tasks: Develop new or modified objectives, action plans and performance measurements that are well-connected to the overall strategic plan.
Like any continuous process, effective operational strategy planning must always be asking: To answer this question, you must be able to define quantifiable performance improvement objectives and timeframes in such areas as delivery improvement, cost reduction, decreased working capital, cycle time reduction, increased throughput, product improvement, quality improvement, supplier performance and management development.
This is the hard part. For example, you could plan to redesign the process of information and material flow to reduce order-to-delivery cycle times by 60 percent over the next six months, or introduce a methodology to decrease inventories by 35 percent in six months.Signature Leadership Series Building a Leadership Team for the Health Care Organization of the Future coordinated across the continuum of services.
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The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems.
Production and operations management talks about applying business organization and management concepts in creation of goods and. This study attempts to prove the impact of information technology (IT) in supply chain management (SCM).
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Introduction to Supply Chain Management (SCM) System Supply chain management (SCM) is the combination of activities which help a company to improve the methods to make a product or service and deliver it to customers.