OPERATIONS MANAGEMENT
CHECK POINT 61: THE OPERATIONS MANAGEMENT PROCESS (OVERVIEW)

Please Select Any Topic In Check Point 61 Below And Click.

1. THE PURPOSE OF OPERATIONS MANAGEMENT
2. WORLD CLASS OPERATIONAL GUIDELINES
3. STEPS IN THE OPERATIONS MANAGEMENT PROCESS
4. CLASSIFICATION OF OPERATIONAL ACTIVITIES
5. FACILITY DESIGN, LOCATION, AND ORGANIZATION
6. THE DESIGN OFFICE
7. PRODUCT AND SERVICE DESIGN AND STANDARDIZATION
8. PROCESS DESIGN
9. EQUIPMENT EVALUATION AND SELECTION
10. PLANT LAYOUT
11. EQUIPMENT MAINTENANCE AND REPLACEMENT
12. TOOL CONTROL
13. COST ESTIMATING
14. OPERATIONS PLANNING
15. MATERIAL REQUIREMENTS PLANNING
16. OPERATIONS CONTROL
17. SUPPLY CHAIN AND MATERIAL MANAGEMENT
18. TOTAL QUALITY MANAGEMENT
19. KAIZEN
20. JUST-IN-TIME METHODOLOGY
21. SERVICE OPERATIONS MANAGEMENT
22. PROJECT AND CONTRACT MANAGEMENT
23. FOR SERIOUS BUSINESS OWNERS ONLY
24. THE LATEST INFORMATION ONLINE

1. THE PURPOSE OF OPERATIONS MANAGEMENT

THE PURPOSE OF OPERATIONS MANAGEMENT

Business owners and operations managers must become fully familiar with all aspects of operations management, which represents one of the most critical functions in every organization. Please remember, operations management is really where your “business tires” hit the road and you must be in the “driver seat” if you want to reach your destination, i.e. to succeed in your business.

The main purpose of Operations Management is to plan, organize, direct, and control the process of bringing together people, equipment, materials, and methods to accomplish a broad range of operational tasks outlined below in the most cost-effective manner.

OPERATIONS MANAGEMENT TASKS

No.

Details

1.

To manufacture products.

2.

To provide services.

3.

To merchandise products on a wholesale and retail basis.

4.

To complete projects and contracts.


THE OPERATIONS MANAGEMENT PROCESS

It is essential, therefore, that your company's management team pays close attention to these activities and develops, implements, and maintains a cost-effective Operations Management Process within your organization.

Moreover, to remain competitive in the global business environment, you and your management team must become fully familiar with the prevailing World Class Operational Guidelines and implement these guidelines within your organization. Effective implementation of the world class operational guidelines may subsequently transform your business into a Lean Operations Company and help to secure your company’s success in the highly competitive marketplace.

2. WORLD CLASS OPERATIONAL GUIDELINES

WORLD CLASS OPERATIONAL GUIDELINES

The evolution and development of World Class Operational Guidelines took place in the Western World and Japan during the last decades. This development has been based on   traditional manufacturing and non-manufacturing methodologies and techniques introduced during the last century and implemented throughout the world.

The development of world class operational guidelines, which apply to manufacturing and non-manufacturing activities alike, has been particularly influenced by four World Class Operational Methodologies presented below. These methodologies provide the foundation for the latest developments in the area of modern operations management, known as Lean Operations Management, and are discussed in detail in this Tutorial.

WORLD CLASS OPERATIONAL METHODOLOGIES

     
Supply
Chain
Management
 

Total Quality
Management
(TQM)

  Kaizen   Just-In-Time
Methodology
(JIT)

Note:

3. STEPS IN THE OPERATIONS MANAGEMENT PROCESS

OPERATIONS MANAGEMENT PROCESS

The most important function of the Operations Manager is to plan, implement and control a cost-effective Operations Management Process within the organization. Planning and control of the operations management process entails a number of steps outlined below.

The term “Operations Management” represents a universal term for operational activities in various types of businesses. Thus, depending upon the nature of the company’s activities, this term can mean the following as described below.

THE TERM "OPERATIONS MANAGEMENT" IN VARIOUS TYPES OF BUSINESSES

No.

Details

1.

Production Management in a manufacturing company.

2.

Wholesale Operations Management in a wholesale company.

3.

Retail Operations Management in a retail company.

4.

Service Operations Management in a service company.

5.

Project Management in a project management company.

6.

Contract Management in a contracting company.

Note:

1.

Ask yourself whether you are a Manufacturer, a Merchandiser (Wholesaler or Retailer), a Service Company, a Project Company, a Contractor, or an MBA Student.

2.

Familiarize yourself with all relevant steps according to the nature of your company's activities as presented below. (The information in brackets indicates which type of operations each step is applicable to).

Manufacturing - Merchandising (Wholesaler/Retailer) -
Service - Project - Contractor.

3.

If you are an MBA student, you are advised to become familiar with the entire program.

THE OPERATIONS MANAGEMENT PROCESS

Step 1: Examine Relevant Operational Activities.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 2: Design, Select Location, Organize And Maintain The Operational Facility.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 3: Establish And Maintain The Design Office.
(Manufacturing - Project - Contractor)

Step 4: Initiate And Maintain The Product Or Service Selection, Design And Standardization Processes.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 5: Develop Cost-Effective Operational Methods And  Processes.
(Manufacturing - - Merchandising - Service - Project - Contractor)

Step 6: Evaluate And Select Suitable Plant, Machinery, And Equipment.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 7: Develop And Implement Cost-Effective Plant Layout In The Operational Facility. (Manufacturing - Merchandising - Service - Project - Contractor)

Step 8: Develop And Implement Cost-Effective Equipment Maintenance And Replacement Programs.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 9: Develop And Implement Cost-Effective Tool Control System.
(Manufacturing)

Step 10: Develop And Implement Accurate Cost Estimating Procedures.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 11: Develop And Implement Cost-Effective Operations Planning And Control Systems.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 12: Develop And Implement Cost-Effective Material Requirements Planning (MRP, MRP II, Or ERP) System.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 13: Develop And Implement A Supply Chain And Material Management Program.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 14: Develop And Implement The Total Quality Management (TQM) Program.
(Manufacturing - Merchandising - Service - Project - Contractor)

Step 15: Develop And Implement Kaizen And Just-In-Time Methodologies.(Manufacturing - Merchandising - Service - Project - Contractor)

Step 16: Develop And Implement Cost-Effective Operational Performance Evaluation, Control, And Reporting Systems.
(Manufacturing - Merchandising - Service - Project - Contractor)

4. CLASSIFICATION OF OPERATIONAL ACTIVITIES

CLASSIFICATION OF OPERATIONAL ACTIVITIES

The operations management process requires familiarization with various types of Operational Activities. These activities are generally classified into several types illustrated below.

THREE MAIN TYPES OF OPERATIONAL ACTIVITIES

   

Manufacturing
Activities

 

Non-Manufacturing
Activities

 

Projects
And Contracts


MANUFACTURING ACTIVITIES

Manufacturing Activities entail conversion of raw materials into finished products by utilizing labor, equipment, and plant in a manufacturing facility, based on one of the three production methods.

   

The
Job Shop
Method

 

The Batch
Production
Method

 

The Flow
Production
Method

This method is used to manufacture one or a few similar products.   This method is used to manufacture similar products in batches.   This method is used to manufacture similar products in large quantities.

NON-MANUFACTURING ACTIVITIES

Non-Manufacturing operations include the following types of operations:

  • Service Operations.
  • Merchandising Operations.

Service operations, in turn can be classified as Custom Service and Standard Service. Merchandising operations, on the other hand, can be classified as Wholesaler and Retailer.

 

Service Operations

 

Merchandising Operations

 

Custom
Service

 

Standard
Service

 
 

Wholesaler

 

Retailer


PROJECTS AND CONTRACTS

Projects include a broad range of specialized operations, which may be undertaken by Project Management Companies such as architects, special event organizers, writers, music producers, film-makers, for various clients, or for their own purposes, on an individual basis.

Contracts include a broad range of specialized operations which may be undertaken by Contractors, such as homebuilders, plumbers, electricians, for clients, or for their own purposes, on an individual basis.

Classification Of Operational Activities is discussed in detail in Tutorial 4.

5. FACILITY DESIGN, LOCATION, AND ORGANIZATION

FACILITY DESIGN, LOCATION, AND ORGANIZATION

Once a particular type of operations is identified and selected, a suitable facility needs to be designed, located, and organized. Some of the issues related to Facility Design, Location, And Organization in various types of companies are outlined below.

Management needs to be familiar with various aspects of facility design, location, and organization to ensure an efficient overall performance of their organization.

ISSUES RELATED TO FACILITY DESIGN, LOCATION, AND ORGANIZATION

No.

Details

1.

Facility Design.
Facility design entails consideration of a broad range of factors such as present and future accommodation needs, operational requirements, budget limitations, and time parameters.

2.

Facility Selection.
The facility selection process is usually based on such considerations as inter-company integration, availability and cost of labor, services, materials and transportation, expansion potential, cost of land, and living conditions.

3.

Facility Organization.
The process of facility organization entails building a working structure and developing an efficient framework for relationships within the operations department. This process also entails assigning authority and allocating duties and responsibilities to employees within the operational facility to ensure the most cost-effective accomplishment of objectives.

Facility Design, Location, And Organization is discussed in detail in Tutorial 4.

6. THE DESIGN OFFICE

THE DESIGN OFFICE

The design of products, services, and processes represents an important function within the Design Office in many manufacturing companies and some non-manufacturing companies alike.

A company's needs for a design office will vary, depending upon the specific nature of the organization's activities. Thus, if a design office is required, management must become familiar with various aspects related to design offices to ensure successful performance of their organization. Some of the issues related to the design office in various types of companies are outlined below.

ISSUES RELATED TO THE DESIGN OFFICE

No.

Details

1.

The Design Office Functions.
The design office is responsible for the timely issue of all new and revised drawings or blueprints, related to product and process design and modifications.

2.

The Design Office Employees.
The design office functions are normally carried out by a team of designers or design engineers, depending upon the company's organizational structure.

3.

The Design Office Competitiveness.
To remain competitive and successful in meeting their objectives, the design office employees must become familiar with the existing world class operational guidelines.

4.

The Design Office Effectiveness.
The effectiveness of the design office depends substantially upon the use of the modern computer-aided design and computer-aided manufacturing (CAD-CAM) technology which offers an increasing number of computer software packages for a broad range of engineering design applications.

5.

The Design Office Working Procedures.
It is necessary to develop effective working procedures within the design office to meet various manufacturing and operational requirements. This will enable designers to develop and implement new innovations in the area of product and process design, production capacity utilization, material handling equipment, plant and machinery maintenance, and overall production or operational facility improvements.

The Design Office is discussed in detail in Tutorial 4.

7. PRODUCT AND SERVICE DESIGN AND STANDARDIZATION

PRODUCT AND SERVICE SELECTION, DESIGN, AND STANDARDIZATION

Selection, design, and standardization of products or services offered to customers represent an important aspect of operations management.

Company's management, therefore, needs to become familiar with various aspects of Product And Service Selection, Design, And Standardization to ensure their company's success. Some of the issues related to the product and service selection, design, and standardization in various types of companies are outlined below.

ISSUES RELATED TO THE PRODUCT AND SERVICE
SELECTION, DESIGN AND STANDARDIZATION

No.

Details

1.

The Product And Service Selection.
The product or service selection represents the combined and continuous effort of production or operations and marketing executives. This process represents the beginning of any effective product and service design and development in any organization.

2.

The Product And Service Design.
The product design is usually carried out by product designers in the engineering design department and involves several steps. These steps generally include product conception, feasibility study, preliminary design, prototype construction and testing, final design, and pre-production testing.

3.

Equipment Used In The Product Design Process.
The modern CAD-CAM technology and software packages are widely used in the process of the product design in accordance with the world class operational guidelines.

4.

Product Range Standardization.
Sound operations management requires continuous simplification and  standardization of the product range to maximize overall operational efficiency. This entails evaluating the existing range of products with an objective to reduce the number of different products and their components to secure the most cost-effective manufacturing methods.

Product And Service Design And Standardization are discussed in detail in Tutorial 4.

8. PROCESS DESIGN

PROCESS DESIGN

Selection, design, and standardization of products and services are meaningless without a comprehensive Process Design. This issue is particularly important in most manufacturing and some non-manufacturing companies alike.

Thus, depending upon the nature of the company, management should become familiar with various aspects of process design to ensure an efficient performance of their organization. Some of the main issues related to process design in various types of companies are outlined below.

MAIN ISSUES RELATED TO PROCESS DESIGN

No.

Details

1.

Process Design Procedures.
Process design includes a set of procedures for manufacturing products or providing services in a most cost-efficient manner. Hence, one of the major responsibilities of the production or operations manager is to develop a specific range of manufacturing or operational processes to satisfy the customers' needs and the company’s budget requirements.

2.

Guidelines For Process Design.
Manufacturing or operational processes must be developed in accordance with world class operational guidelines which incorporate the traditional elements of operations management and main components of Lean Operations, such as Supply Chain Management (SCM), Total Quality Management (TQM), Kaizen, and Just-In-Time (JIT) Methodology.

3.

Factors Influencing Process Design.
Process design requires consideration of several important factors including company financial resources, specific design requirements, equipment and manpower availability, and demand for specific products or services in the marketplace.

4.

Importance Of Process Design.
Process design is particularly important for all manufacturing companies and many service organizations.

Process Design is discussed in detail in Tutorial 4.

9. EQUIPMENT EVALUATION AND SELECTION

EQUIPMENT EVALUATION AND SELECTION

Without proper plant, machinery, and equipment, selected in accordance with world class operational guidelines, the company's chances of remaining competitive in the existing market environment are slim.

Thus, Equipment Evaluation And Selection represents another important function of the operations manager. This function is particularly important in all manufacturing and some non-manufacturing companies alike.

The equipment evaluation and selection process requires consideration of several factors, as outlined below. The final selection of equipment also demands comprehensive evaluation of anticipated operating costs associated with the utilization of equipment in the operations department.

EQUIPMENT EVALUATION AND SELECTION FACTORS

No.

Details

1.

Equipment operational capacity.

2.

Equipment versatility.

3.

Equipment reliability.

4.

Equipment maintenance.

5.

Equipment safety.

6.

Equipment compatibility.

7.

Equipment availability.

8.

Equipment installation.

9.

Equipment design.

10.

Auxiliary equipment.

11.

Overall effect on the organization.

Equipment Evaluation And Selection is discussed in detail in Tutorial 4.

10. PLANT LAYOUT

PLANT LAYOUT

Plant Layout*, or Facility Layout, is designed to ensure effective performance of plant, machinery, and equipment in the operational facility. Good plant layout involves consideration of several factors such as operational flexibility, coordination, accessibility and visibility, movement and handling of materials, employee comfort, safety, and operational security.

The development of the world class operational guidelines helps to focus the operational efforts in maximizing the effectiveness of the modern plant layout. Thus, depending upon the specific technological requirements and the company’s objectives, four different types of plant layout may be selected, as illustrated below. Each type of plant layout has its advantages and disadvantages.

The first three types of plant layout represent the traditional manufacturing approach, while the Just-In-Time plant layout represents an important part of world class operational guidelines and provides the foundation of a Lean Operational Facility.

FOUR TYPES OF PLANT LAYOUT

     
Process
Layout
  Product
Layout
  Fixed
Position
Layout
  Just-In-Time
Plant
Layout

* Note:

"Plant" is defined by Webster as: "the tools, machinery, fixtures, buildings, grounds, etc. of a factory or business."

Plant Layout is discussed in detail in Tutorial 4.

.

11. EQUIPMENT MAINTENANCE AND REPLACEMENT

EQUIPMENT MAINTENANCE AND REPLACEMENT

Effective performance of the operational facility strongly depends upon the standard and frequency of equipment maintenance. This function may also include design, construction, modification, installation, and removal of machinery, depending upon the company’s specific operational requirements.

Thus, it is important to become familiar with various aspects of Equipment Maintenance And Replacement to ensure the efficient operational performance of the organization. Some of the main issues related to equipment maintenance and replacement are outlined below.

MAIN ISSUES RELATED TO EQUIPMENT MAINTENANCE AND REPLACEMENT

No.

Details

1.

Equipment Maintenance.
Equipment maintenance in a small or medium-sized company is usually handled by employees in a specially designated maintenance section within the operations department.

2.

Preventive Maintenance Program.
Many companies develop and adhere to a preventive maintenance program to secure high standards of operational performance in accordance with world class operational guidelines.

3.

Equipment Replacement Program.
Since equipment does not last forever, it is necessary to develop and implement a sound equipment replacement program. Some of the major objectives of this program include reduction of operational and repair costs, increase in operational capacity, and simplification of manufacturing operations and processes.

4.

Equipment Replacement Program Factors.
The development of an equipment replacement program requires consideration of several technical and cost-related factors associated with the use of equipment in the operations department.

Equipment Maintenance And Replacement is discussed in detail in Tutorial 4.

12. TOOL CONTROL

TOOL CONTROL

Another important function of the operations manager is the development and implementation of an effective Tool Control system. This function is particularly important in all manufacturing and some non-manufacturing companies alike. 

Thus, management must be familiar with various aspects related to tool control to ensure the efficient performance of their organization. Some of the main issues related to tool control are outlined below.

MAIN ISSUES RELATED TO TOOL PLANNING AND CONTROL

No.

Details

1.

Tool Planning And Control System.
Such a system relates to standard, special, and perishable tools, as well as jigs and fixtures used in the operations facility. The planning of tooling requirements represents an integral part of the effective operations planning process. Although some companies have their own toolroom, the bulk of tools are still being purchased from tooling specialists.

2.

Tool Planning And Control Procedures.
Tool planning and control procedures have also been affected by the prevailing world class operational guidelines. These guidelines, for example, prescribe the allocation of special tools in the close proximity of their application instead of having one centralized tool storage location.

Tool Control is discussed in detail in Tutorial 4.

13. COST ESTIMATING

COST ESTIMATING

Cost Estimating represents one of the basic elements of routine operational activities and it entails preparation of accurate cost estimates of products or services and specification of completion and delivery dates.

Correct cost estimating is vitally important in ensuring a continuous and profitable operation of any organization. Some of the main issues related to cost estimating are outlined below.

MAIN ISSUES RELATED TO COST ESTIMATING

No.

Details

1.

Cost Estimating Procedure.
The cost estimating procedure requires identification of all labor, material, and plant overhead costs involved in a particular operational process.

2.

Advantages Of Cost Estimating.
Cost estimating provides the foundation for controlling manufacturing or non-manufacturing expenses and determining the final selling price of products or services.

3.

Combined Effort In Cost Estimating.
The cost estimating process of products and services in any organization represents a combined effort between the operations department on the one hand, and the financial department on the other hand.

Cost Estimating is discussed in detail in Tutorial 4.

14. OPERATIONS PLANNING

OPERATIONS PLANNING

One of the most important functional responsibilities of the Operations Manager is to initiate effective Operations Planning in manufacturing or non-manufacturing organizations alike. It is essential, therefore, that management becomes familiar with various aspects of operations planning to ensure the continuous success of their company. Some of the main issues related to operations planning are outlined below.

MAIN ISSUES RELATED TO OPERATIONS PLANNING

No.

Details

1.

The Operations Planning Process.
This entails systematic pre-determination of methods and procedures for the completion of products, services, projects, and contracts in the most economical manner.

2.

The Purpose Of Operations Plans.
Effective operations plans aim to maximize the utilization of plant capacity, meeting manufacturing or operational output, manpower, and equipment utilization requirements, as well as to maintain sufficient inventory levels, when applicable.

3.

Basic Functions Of Operations Planning In A Manufacturing Facility.
The two basic functions of operations planning are scheduling manufacturing activities into acceptable timetables and loading various machines and operations in accordance with specific operational needs.

4.

Basic Functions Of Operations Planning In A Non-Manufacturing Facility.
The basic functions of operations planning in a non-manufacturing facility, such as a wholesaler, retailer, or service provider are much less complex than in a manufacturing operation, and they entail scheduling of all operations into acceptable timetables to meet the company’s operational objectives.

5.

Considerations In The Operations Planning Process.
The operations planning process should be developed and implemented in accordance with world class operational guidelines to ensure successful operational performance within the operational facility.

6.

Various Types Of Operational Planning.
Operational planning in a manufacturing environment may differ depending upon the specific manufacturing method used by the organization, namely, job shop, batch production, or flow production. Operational planning in a non-manufacturing environment will depend upon the specific type of activities, namely, merchandising – wholesaler or retailer, and service operation – custom service or standard service.

7.

Importance Of Operational Planning.
Operational planning represents a critical element of the entire manufacturing or non-manufacturing process and it requires a "hands-on" approach by all employees within the operational facility.

Operations Planning is discussed in detail in Tutorial 4.

15. MATERIAL REQUIREMENTS PLANNING

MATERIAL REQUIREMENTS PLANNING (MRP, MRP II AND ERP)

Material Requirements Planning (MRP) and Manufacturing Resources Planning (MRP II) systems are an integral element of the overall operational planning process in many successful manufacturing companies. These systems, including the upgraded Enterprise Resource Planning (ERP) systems play a vital role in many lean operational facilities.

It is essential that management becomes familiar with MRP and other related systems to secure the long-term success of their organization in a competitive market environment. Some of the main issues related to material requirements planning are outlined below.

MAIN ISSUES RELATED TO MATERIAL REQUIREMENTS PLANNING
(MRP, MRP II, AND ERP)

No.

Details

1.

The Purpose Of Material Requirements Planning (MRP) Systems.
The purpose of computer-based MRP systems is to calculate quantities and to determine timing of materials, parts, and components required to complete a particular manufacturing or operational task.

2.

The Purpose Of Manufacturing Resources Planning (MRP II) Systems.
The purpose of computer-based MRP II systems is to enhance the functionality of MRP Systems and, in addition, to determine operational capacity requirements and connect the operational planning function with other departments within the organization.

3.

Sources Of Information Used By MRP Systems.
Among the main sources of information used by MRP and MRP II systems are Master Production Schedules, Bill of Materials Files, and Inventory Status Files. Operations, finance, and marketing personnel provide a major input toward the development of accurate Master Production Schedules.

4.

Advantages Of MRP Systems.
Both MRP and MRP II systems represent an important contribution and help many small and medium-sized companies to reduce the cost of products and operations by maximizing their operational capacity utilization, and improving the overall efficiency of the operational planning process. Details regarding MRP systems are provided in this Tutorial.

5.

The Purpose Of Enterprise Resource Planning (ERP) Systems.
The prime purpose of computer-based ERP systems is to further enhance the functionality of MRP and MRP II systems and, in addition to determine the operational capacity requirements, to connect operational planning functions with financial, marketing, sales and human resources functions within the organization. These systems are designed for larger organizations.

Material Requirements Planning is discussed in detail in Tutorial 4.

16. OPERATIONS CONTROL

OPERATIONS CONTROL

Operations Control represents one of the most critical functional responsibilities of the operations manager in any manufacturing company and non-manufacturing company alike.

This function is particularly important because without a proper operations control, the organization will simply not be able to survive. Some of the main issues related to operations control are outlined below.

MAIN ISSUES RELATED TO OPERATIONS CONTROL

No.

Details

1.

The Purpose Of Operations Control.
The main purposes of operations control are to authorize operational activities, to secure effective implementation of operational plans, and to maintain control over manufacturing and non-manufacturing costs within the operations department.

2.

Two Basic Functions Of Operations Control.
The two basic functions of operations control in manufacturing and non-manufacturing environments are dispatching and expediting work in accordance with the operations planning requirements.

3.

The Purpose Of Work Dispatching.
The main purpose of work dispatching is to authorize and initiate the manufacturing activities in a manufacturing company, or operational activities in a non-manufacturing company.

4.

The Purpose Of Work Expediting.
The main purpose of work expediting is to maintain an overall control of all manufacturing activities in a manufacturing company, once production has begun, or to control all operational activities in a non-manufacturing company.

5.

Advantages Of Operations Control.
Effective implementation of both functions helps the company in meeting its objectives in accordance with the world class operational guidelines and assists in becoming a lean operational facility.

Operations Control is discussed in detail in Tutorial 4.

17. SUPPLY CHAIN AND MATERIAL MANAGEMENT

SUPPLY CHAIN AND MATERIAL MANAGEMENT

A company's profitability and successful performance as a lean operational facility will depend substantially upon its ability to develop effective and reliable sources of materials and services supply. 

The company's management, therefore, should become familiar with various aspects of the Supply Chain And Material Management to secure the company's long-term success. Some of the main issues related to the supply chain and material management are outlined below.

MAIN ISSUES RELATED TO THE SUPPLY CHAIN AND MATERIAL MANAGEMENT

No.

Details

1.

The Purpose Of Supply Chain Management.
The main purpose of supply chain management is to develop and maintain effective business connections with suitable and reliable suppliers.

2.

Advantages Of Supply Chain Management.
A successful supply chain management strategy will guide the company's management team in making correct choices regarding the selection of business associates and companies to do business with. This strategy will also provide guidance in selecting the dimension and organizational form which the ultimate supply chain management implementation will take.

3.

Material Management.
Material management represents an important element of operations management and it includes purchasing, control, storage, and dispatch of materials.

4.

Material Purchasing.
The prime purpose of material purchasing is to ensure that the "right" quality and quantity of materials are purchased at the "right" time, and at the "right" price from the "right" source. Material purchasing is also affected by Just-In-Time material purchasing guidelines, which are discussed in this Tutorial.

5.

Materials Storage And Control.
Materials storage and control entails inspection, acceptance, storage, distribution, and control of inventories in the operational facility.

6.

Materials Dispatch.
Materials dispatch entails developing sound procedures to ensure timely delivery of products to customers.

Supply Chain And Material Management is discussed in detail in Tutorial 4.

18. TOTAL QUALITY MANAGEMENT

TOTAL QUALITY MANAGEMENT (TQM)

A company's profitability and successful performance as a lean operational facility will depend substantially upon the quality control standards established and maintained within the operations department and within the entire organization.

Thus, it is essential that management becomes familiar and implements Total Quality Management (TQM) within their organization to ensure its long-term success. Some of the main issues related to total quality management are outlined below.

MAIN ISSUES RELATED TO TOTAL QUALITY MANAGEMENT (TQM)

No.

Details

1.

The Purpose Of Total Quality Management.
The purpose of TQM is to design and implement procedures on an organization-wide basis to ensure that the organization constantly meets and exceeds customers' requirements in accordance with world class operational guidelines.

2.

Development Of A Quality Assurance Program.
Since the bulk of work in a manufacturing or non-manufacturing organization alike is done in the operations department, Total Quality Management entails development of a sound quality assurance program, elimination of waste, and implementation of continuous improvements throughout the facility.

3.

The Purpose Of A Quality Assurance Program.
The quality assurance program generally aims at ensuring the quality of design, conformance, and performance of products and services offered by the company. Moreover, this program entails evaluation and continuous improvement of all operational processes, identification of defects and prevention of their occurrence in products or services.

Total Quality Management is discussed in detail in Tutorial 4.

19. KAIZEN

KAIZEN

One of the most important “secrets” kept by the Japanese from the Western World for a long time is called Kaizen. However, during the last few decades, since this “secret” has been out, Kaizen became one of the main elements of world class operational guidelines for all manufacturing and non-manufacturing organizations alike. 

In the Japanese language, “Kaizen” means a "process of continuous and gradual improvement". In reality, Kaizen is much more than a process - it is a culture with a very specific set of positive values and attitudes toward overall and consistent improvement of everything, related to human activities.

It is essential that management in every organization become familiar with basic principles of Kaizen to ensure the long-term success of their organization in a competitive market environment. Kaizen methodology can also play a very important role in transforming your company into a successful lean operational facility.

IMPORTANCE OF KAIZEN

No.

Details

1.

The Kaizen Guidelines.
In relation to business management, and operations management in particular, Kaizen prescribes gradual and continuous improvement of everything that may relate to operational activities within any organization irrespective of its size, type of products or services. If a particular product, service, process or operation can be improved - Kaizen may offer sound guidance.

2.

The Kaizen Role In World Class Manufacturing.
Kaizen played and continues to play a major role in defining world class operational guidelines. Kaizen implementation represents an integral element of converting any organization into a lean operational facility and helps the organization to become competitive and profitable in a long run.

Kaizen is discussed in detail in Tutorial 4.

20. JUST-IN-TIME METHODOLOGY

JUST-IN-TIME METHODOLOGY

Familiarization with world class manufacturing and operational guidelines cannot be completed without understanding Just-In-Time (JIT) Manufacturing And Operational Methodology. This methodology has a strong connection with Lean Operations in manufacturing and non-manufacturing environments. JIT, therefore, is essential in converting any organization into a Lean Operational Facility, thereby ensuring improved profitability and customer satisfaction.

JIT methodology represents another highly successful Japanese approach to solving manufacturing and operational problems. Thus, it is important that management in every organization becomes familiar with the basic principles of Just-In-Time methodology to ensure the long-term success of their organization.

PURPOSE OF JUST-IN-TIME METHODOLOGY

No.

Details

1.

The Purpose Of Just-In-Time Methodology.
The prime objective of JIT methodology is to eliminate waste in the total manufacturing or operational process, from purchasing of raw materials through distribution of finished goods.

2.

Main Concepts Of Just-In-Time Methodology.
JIT methodology incorporates concepts of total quality throughout the manufacturing process, uniform loading of equipment, overlapping of operations, reduced set-up times, pull system, JIT purchasing, employee participation, and teamwork.

Just-In-Time Methodology is discussed in detail in Tutorial 4.

21. SERVICE OPERATIONS MANAGEMENT

SERVICE OPERATIONS MANAGEMENT

Service Operations Management represents the key management task in every service-oriented organization. The complexity of this task will depend upon the nature of the service operations, namely, custom (specialized) service and standard service.

Thus, management in every service-oriented organization must become familiar with various aspects of planning and control of service operations to ensure the long-term success of their organizations. Some of the main issues related to planning and control of service operations are outlined below.

ISSUES RELATED TO SERVICE OPERATIONS MANAGEMENT

No.

Details

1.

Planning Of Service Operations.
Planning of service operations entails defining the sequence of various operations, identifying the type and volume of service, employee requirements, operational capacity requirements, and other related issues.

2.

Master Operations Schedules.
Planning of service operations is frequently accomplished through a Master Operations Schedule. This schedule represents a short-term plan that outlines the details of services to be rendered and specifies operational dates in accordance with the existing operational capacity.

3.

Control Of Service Operations.
Control of service operations entails continuous monitoring of all elements of the service operation in progress. This is essential to ensure successful and cost-effective completion of services in accordance with the pre-planned schedules.

Service Operations Management is discussed in detail in Tutorial 4.

22. PROJECT AND CONTRACT MANAGEMENT

PROJECT AND CONTRACT MANAGEMENT

Planning And Control Of Projects And Contracts is a highly critical area of responsibility in organizations which specialize in long-term projects and contracts.

The complexity of the planning and control of projects and contracts will depend substantially upon the specific nature of the company's activities. Thus, management in every project or contract organization must become familiar with various aspects of planning and control of project and contract operations to ensure the long-term success of their organizations. Some of the issues related to planning and control of projects and contracts are outlined below.

ISSUES RELATED TO PROJECT AND CONTRACT MANAGEMENT

No.

Details

1.

Definition Of A Project.
A project is a long-term task to develop and produce a special, often one-off, product. Such a project may be a software program, a book, a movie, an architectural design, or any kind of a unique or specialized creation.

2.

Who Is Doing Projects?
Depending upon the specific nature of the project, it may be undertaken by a computer programmer, by a scientist, by a writer, by a movie producer, or by any creative person or a group of people. Planning and control of each stage of the project execution usually represents a challenging task for people involved in it.

3.

Importance Of Planning And Control Of Contracts.
Planning and control of contracts is critically important for any contractor. Many contractors, who are small business owners, specialize in areas related to home building and affiliated sub-contracting disciplines, such as: air-conditioning, roofing, plumbing, framing, concrete, swimming pools. Each contract must be planned and controlled in a particular manner, depending upon its specific nature.

Project And Contract Management is discussed in detail in Tutorial 4.

23. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

24. THE LATEST INFORMATION ONLINE

WOULD YOU LIKE TO LEARN MORE?

As an added benefit to all members of Business Management Club, you will have access to the Latest Information Online on various topics discussed in this Check Point. You will be able to access this information through Business Links included in the downloadable version of this program. These links are updated on a continuous basis.

Note:

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LESSON FOR TODAY:
Operations Is Where Your Business Will Make It Or Break It!