Page 12 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes In addition, marketing is the key information gatekeeper between production and the
product markets. Marketing determines the kind of product customer's value. This starts
prior to product development, positioning, pricing, forecasting and promotions both
before and after product launch. Interdisciplinary co-operation involving production and
marketing decisions go back over many decades.
Conflicts between production and marketing in most organizations result from the lack
of broad agreement on critical organizational decisions such as the width of the product
line, the amount of time taken to deliver the product, and service or quality levels. The
interface between these two functions offers wide leverage in most organizations –
increased understanding and trust between production and marketing propels many
organizations to higher levels of effectiveness.
2. Production Management – Finance Interface: Capital equipment, cost-control policies,
price-volume decisions and inventories constitute the interface with financial decision-
making. As acquisition and management of assets is an important part of decision making,
finance and production need to work together to understand the nature of technology
used in production and the practice-performance gap in their organization.
Tracking performance requires that the organization develops common, objective
platforms for performance evaluation. Finance provides data on product and service costs
that help managers evaluate operational performance. Production managers should have
knowledge of financial procedures, limits, and capabilities. The effectiveness of operational
planning and budgeting is often driven by the level of co-operation between these two
areas.
3. Production Management – Design Interface: Shrinking product lifecycles have been adding
to the demands on the product development process. This is especially true for industries
that have a high clock-speed. Launching more new products faster requires tight integration
between the design and Production Management functions. Initiatives such as simultaneous
engineering and early supplier involvement in the product design process not only add to
the role of production but also improve the perception of value provided in the product
and service concept design process.

In addition, process development and engineering is responsible for production methods
necessary to make the products. This function has a great impact on production.

Therefore, co-operation between these three functions, i.e., process engineering, design
and production, leads to improved organizational performance.

4. Production Management – Human Resource Interface: No plant manager anywhere would
ignore the role of good people management in running an efficient operation. The human
resource function includes operation's approaches such as continuous improvement and
total quality that rely mainly on human inputs. Decisions about people and the organization
of the production function interact significantly with both structural and infrastructural
decisions. Such issues are not unique to the production function, however; they impact
other functions and are dealt with more effectively through the human resource
management function.

In services, the human resource focus is vital, as customer's perceptions of an organization
are generally formed by their interaction with customer contact personnel, such as
customer service representatives. As organizations increasingly opt for 'flextime', the
production function has to develop unique process configurations to accommodate
employees with minimum disruption in the flow of work. Production Management and
Human Resource departments have to co-operate for recruiting and training employees,

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