Operations Management

An Introduction to

Operations Management

Compiled by: Yosef N

School of Graduate Studies

Unity University College

Addis Ababa

March 2008

Contents

Operations Management 1

Origins and Development 2

Craft Manufacturing 3

Mass Production 3

The modern period 4

Key Issues In Operations 5

Building Success With Operations 8

References 10

Operations Management

Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is also the management of resources, the distribution of goods and services to customers, and the analysis of queue systems.

APICS The Association for Operations Management also defines operations management as "the field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions as they affect the organization" (APICS Dictionary, 11th edition).

Operations also refers to the production of goods and services, the set of value-added activities that transform inputs into many outputs. Fundamentally, these value-adding creative activities should be aligned with market opportunity for optimal enterprise performance.

Operations management focuses on carefully managing the processes to produce and distribute products and services. Product management is usually in regard to one or more closely related product -- that is, a product line. Operations management is in regard to all operations within the organization.) Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations. A great deal of focus is on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes.

Operations management is a multi-disciplinary field that focuses on managing all aspects of an organization's operations. "The typical organization consists of the integration of many different functions. The two most obvious functions are to provide the product or service and to sell the product or service. Operations management focuses on the function of providing the product or service. It is concerned with the planning and controlling of all activities necessary for the provision of the firm's product or service." Aspects of operations management, then, include products or services to emphasize; facility size and location with respect to customers and suppliers; marketing strategies to attract clients/customers; techniques and equipment to use to make the goods or to provide the services; work force management and training; and measurements of quality assurance. Operations managers apply ideas and technologies to increase productivity and reduce costs, improve flexibility to meet rapidly changing customer needs, enhance product quality, and improve customer service.

Origins and Development

The origins of Operations Management can be traced back to the Industrial Revolution, the same as Scientific Management and Operations Research. Adam Smith treats the topic of the division of labor when opening his 1776 masterpiece: An Inquiry into the Nature and Causes of the Wealth of Nations, also commonly known as The Wealth of Nations. The first documented effort to solve operation management issues comes from Eli Whitney back in 1798, leading to the birth of the American System of Manufacturers (ASM) by the mid-1800s. It was not until the late 1950's that the scholars noted the importance of viewing production operations as systems.

Every organization has an operations function, whether or not it is called �operations’. The goal or purpose of most organizations involves the production of goods and/or services. To do this, they have to procure resources, convert them into outputs and distribute them to their intended users. The