Page 21 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Category
Contemporary Challenges
Decision Area
Products
Structure
 Do we produce standard or custom
products and services?
services that are easy to make?
(What?)

 How can we coordinate design
 Do we make to order or make to
stock?
teams that are scattered across the
world?
Processes
 What kind of equipment should we
 How do we exploit new IT
use?
developments such as the Internet
(How?)
for rapid and flexible response to
 How much of the process should be
customer needs?
automated?
 How should processes be
configured?
 How much is needed?
Capacity
 How do we use flexible capacity
options (such as temporary workers)
(How much?)
 What type?
and economies of scope for
 When should capacity be increased
competitive advantage?
or decreased?
Facilities
 How do we manage and exploit
 Where are they located?
global opportunities for locating
(Where?)
 What products should be produced
facilities?
in each? Typical Questions  How do we design products and
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
Production and Operations Management 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?
Notes Inventory and  What products should we  How do we manage the supply
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?
organi- (Who?)  What types of compensation and  How can we better align work
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?
The departmental mission will to a large extent depend on the nature of the product whether the
organization is dealing with goods, services or contracts. Whatever the product, the department’s
mission is judged on three major components:
 Cost minimization,
 Delivery reliability, and
 Product quality.
Equally if not more important, is the ability to manage humans in a way that is mutually
satisfying to the subordinates, peers, and superiors and this involves getting the necessary
things done.
Effective operations managers must show commitment—both to their employees and to the
organization’s objectives.
Workers expect good managers to be fair and impartial. In an era of downsizing and
disintermediation, workers would like to feel that their manager is an effective advocate when
it comes to advancing or protecting their jobs.
This advocacy role is often in conflict with another real corporate need—the need to have team
players that understand and are committed to the corporate mission. Resolving this conflict to
everyone’s satisfaction is often an art. Operations Management is also the art of getting work
done through people.
The operations manager is also the supply chain manager/coordinator. In a manufacturing
organization,
Example: The manager must view the entire flow of goods and information within the
supply chain, whether this falls within the corporation’s legal boundaries or within that of
suppliers and customers outside the organization.
The operations manager also has duties that involve cross-functional participation with the
business processes in the other three core processes. The most important non-supply chain
business process is the product innovation process. But activities involving human resource
management, accounting, marketing, and R&D processes also are critical contributors to the
operations manager’s effectiveness.
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