Page 20 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 1: Operations Management Basics

In this dynamic environment, the operations manager must understand his roles. These keep Notes
modifying and the focus keeps changing in the context of the forces of change that operate and
impact the functioning of the organization. The roles of the operations manager have to be
suitably moderated depending on the changed circumstances. The primary role of the operations
manager is to accomplish the department’s mission as best as possible.
The department’s mission can be segregated into three different decision areas. These are as
follows:

 Structural decisions,
 Infrastructural decisions, and
 Organizational decisions.
Structural decisions refer to the ‘hardware’ of organizations; they are long-term decisions that
require substantial capital investment and are difficult to reverse once they are in place.

Example: The structural decisions are the number and size of facilities and the type of
processing equipment.
Infrastructural decisions are the ‘software’ of operations. These are typically tactical in nature
and facilitate the management of day-to-day issues.

Example: Machine loading and the changing of ‘dies’ in a forging unit.
Table given below describes the decision areas in detail.

Category Decision Area Typical Questions Contemporary Challenges
Structure Products  Do we produce standard or custom  How do we design products and
(What?) products and services? services that are easy to make?
 Do we make to order or make to  How can we coordinate design
stock? teams that are scattered across the
world?
Processes  What kind of equipment should we  How do we exploit new IT
(How?) use? developments such as the Internet
 How much of the process should be for rapid and flexible response to
automated? customer needs?
 How should processes be
configured?
Capacity  How much is needed?  How do we use flexible capacity
(How much?)  What type? options (such as temporary workers)
and economies of scope for
 When should capacity be increased competitive advantage?
or decreased?
Facilities  Where are they located?  How do we manage and exploit
(Where?)  What products should be produced global opportunities for locating
in each? facilities?
Infra- Quality  How do we prevent defects and  How can we better learn from
structure Management errors? customers?
(How to improve?)  How do we improve products and  How can we improve quality to
processes? world-class standards?
Schedule  Should scheduling be centralized or  How do we use available cost
Management decentralized? and financial information in
(When?)  How do we prioritize work and/or scheduling?
customer orders?  How do we integrate enterprise
resource planning systems into
operations?
Inventory and  What products should we  How do we manage the supply
Contd...
Supply Chain outsource? chain for increased value to the
Management customer?
 How many suppliers should we
(How to acquire use?  What effect does the Internet
and deliver?) have?
People Workforce and  What skill level and training should  How can we develop truly “high-
and Productivity employees have? performance” work systems?
LOVELY PROFESSIONAL UNIVERSITY
organi- (Who?)  What types of compensation and  How can we better align work 15
zation reward systems are best? systems with long-range plans and
objectives?
Organization  Is a hierarchical or team-based work  What structures are best suited
(What structure?) structure better? for operations in different countries?
 Should we train in-house or  Should we “flatten” the
outsource? organization?
 Lean Manufacturing
Strategy  How to respond to customer’s  How can we develop a learning
(How to manage special needs? organization in a globalized
growth?)  What information do we need to environment?
effectively manage growth?  How can we best look at the
organization across functional
boundaries?