Page 15 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes
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Caution In order to determine customer needs, it is necessary to monitor the competitive
environment.

2. Develop Product Strategy: This involves marketing, operations, and engineering activities
in order to create products that customers desire. This requires an ability to evaluate
product concepts so that there is support to design new products or introduce product
improvements. The slower the pace, the more is the focus on delighting customers by
finding better ways to incrementally improve products that already exist. But as the pace
of business increases, the greater is the need to be aware of the competitive challenges that
new technologies and competitors introduce into the marketplace.
The organization has to develop the ability to understand the potential customer and the
pleasing/displeasing consequences associated with changes. An aggressive competitive
market exploits the limitations of an organization; as such, it has to possess the ability to
design, build and test prototypes, and develop new products or product improvements
before the competition. The risk is that if the firm does not replace, upgrade its existing
products in time, some other firm will.
3. Secure Processes and Materials to Satisfy Demand: Management activities involve selection
of raw materials from vendors and the ultimate delivering and servicing of the product
for the customer. These activities include operations planning and control processes and
managing the product transformation processes. In addition, the business logistics and
the supply chain process play a critical part and have to be managed effectively. In today’s
world, supply chain players are widely distributed and will seldom lie within the firm’s
boundaries, hence making the need to manage the flow of materials effectively more
challenging.
4. Manage Strategic Planning Processes: Support business processes are essential to all
organizations. The strategic planning process defines the firm’s as well as its own Operations
Management function. It also specifies what it must do to achieve its corporate goals. The
human resource management function creates an organization design that is suited to the
competitive environment and provides and/or enhances the human capital needed by
other functions to effectively carry out their tasks. The Management Information Systems
groups provide timely information that is needed to assess the competitive environment
and the performance of its business functions. The accounting and finance groups monitor
the use of financial assets and take steps to ensure that the financial base of the organization
is both adequate and efficiently utilized. There has to be an adequate interface between all
these functions.
Operations Management activities are mostly involved in the second and third core processes.
Operations Management, as a value creating activity, contributes to the customer satisfaction
process by assisting to design and develop products that possess the capability to satisfy the
customer’s functional need with the desired level of design, quality and cost. Operations
Management is defined as the following:

Operations Management constitutes all of the activities that an organization conducts in order
to deliver value to its customers. It is the set of processes that transforms either materials or
information into a product or service.
The operations function contributes to the ‘value’ delivery to customers by significant
improvements in the cost, quality, timeliness, and availability of products and services.
Organizations can use effective Operations Management either to show improvements in
performance and quality, coupled with lower prices in real value, or to help raise their bottom-
line.

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