10 Strategic Operation Management Decisions

In 2008, Ford Motor Company reorganized using what’s known as the 10 strategic
operations areas. It was part of the company’s turnaround and enabled the organization be
more flexible and survive the financial crisis without taking government bailouts. Toyota,
Google and Jet Blue are also known for using the 10 area system in all of their business
activities. It is used across industries as a guide to operations management.
The areas are:

1. Goods and services: This includes looking for ways to implement consistency in costs,
quality, and resources across all business divisions.

2. Quality Management: Be clear on the customer’s demands and then meet those
expectations. Use market research to determine customer needs and batch quality
assurance testing on products and services in production.

3. Process and Capacity Design: Design strategies which support all production goals
including technology and resources. A value stream map can help determine what
processes are necessary and how to keep them running efficiently.

4. Location: In developing a location strategy consider supply chain and how the location will
receive supplies, the movement of goods and services internally and to customers, and the
role of marketing and public relations in the location choice.

5. Layout Design and Strategy: Consider the placement of desks, workstations, and how
materials are delivered and used.

6. Human Resources and Job Design: Implement continuous improvement programs with
regular reviews, provide continuous training for employees, and institute employee
satisfaction programs to achieve success in this area.

7. Supply Chain Management: Determine the best strategies to streamline, be cost effective,
and to develop trusted partners.
8. Inventory: Different markets mean different challenges when it comes to inventory but all
need to strategize and plan their inventory control. Weather, supply shortages, and labor all
influence how an organization maintains its inventory.

9. Scheduling: Consider both production and people. Ask questions such as how much
product is required to be produced for the customer in the required time? How many people
and how many machines are required to do the job effectively and efficiently? This differs
among industries and business departments. For example, emergency rooms need to
maintain different schedules than a hospital’s corporate office.

10. Maintenance: This includes maintaining people and machines, as well as, process. What
do you need to do to maintain quality and keep resources reliable and stable?
These 10 areas can be applied to any size business, not just global giants such as Ford and
Jet Blue. Use them as a guide to analyze your operations. Measure your current
productivity and then implement strategies to operationalize these 10 areas into your
decision making process and watch your productivity become more efficient.

Difference Between Production and Operations Management

September 26, 2017 By Surbhi S Leave a Comment

The primary
objective of production and operations management is to effectively manage and
utilize those resources of the firm that are essential for the production of goods
and services. Production management refers to the management of activities
related to the production of goods.
On the other hand, operations management is a step ahead of production
management, or it can be said that the production management is a part of the
operations management. Operations Management, as the name suggests is the
administration of business operations, by the managers of the organization.

The difference between production and operations management is very thin and
blurred, which is simplified in this article in a detailed manner.

Content: Production Management Vs Operations

Management
1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart
BASIS FOR
PRODUCTION MANAGEMENT OPERATIONS MANAGEMENT
COMPARISON

Meaning Production Management connotes the Operations Management refers to the

administration of the range of activities part of management concerned with the
belonging to the creation of products. production and delivery of goods and
services.

Decision Making Related to the aspects of production. Related to the regular business activities.

Found in Enterprises where production is Banks, Hospitals, Companies including

undertaken. production companies, Agencies etc.

Objectives To produce right quality goods in right To utilize resources, to the extent
quantity at right time and at least cost. possible so as to satisfy customer wants.

Definition of Production Management

When the principles of management are applied to the production function of the
organisation, it is known as production management. It is a process of planning,
scheduling, supervising and controlling the activities involved in the production
of goods and services, i.e. the transformation of various resources into the value-
added product, in an efficient manner.

In this process, the decision regarding the quality, quantity, price, packaging,
design, etc. are taken by the production manager, so as to ensure that the output
produced confirms the specifications.

Areas of Production Management

Definition of Operations Management

Operations Management implies the management of day to day business

activities, so as to ensure smoothness and effectiveness of operations in the
organization. It involves administration of production, manufacturing and
provision of services in an organisation.

Operations Management is that branch of management, that deals with

designing, implementing and controlling the production process, i.e. converting
inputs into the output, using resources, in order to provide desired goods and
services to customers while adhering to the policies stated by the management of
the organisation.

Operations Management is all about the optimum utilization of company’s

resources, i.e. the resources must be utilized as much as possible, by minimizing
the loss, wastage and underutilization.

Key Differences Between Production and Operation

Management
The difference between production and operation management, are presented
hereunder:

1. Production Management can be defined as the administration of the set of

activities concerning the creation of goods or transformation of raw
material into finished goods. Conversely, Operations Management is used
to mean that branch of management which deals with the administration
both production of goods and provision of services to the customers.
2. In production management, the manager has to make decisions regarding
the design, quality, quantity and cost of the product manufactured by the
department. On the contrary, the scope of operations management is larger
in comparison to the production management wherein the operations
manager looks after the product design, quality, quantity, process design,
location, manpower required, storing, maintenance, logistics, inventory
management, waste management, etc.
3. Production Management can only be found in the firms where production
of goods is undertaken. Unlike, one can find operations management in
every organization, i.e. manufacturing concerns, service-oriented firms,
banks, hospitals, agencies, etc.
4. The basic objective of production management is to provide the right
quality goods in the right quantity at right time and best price. In contrast,
operations management aims at making the best possible use of
organization’s resources, in order to fulfil the customer’s wants.
Conclusion

Production and Operations Management are so closely intertwined, that it is

quite difficult to differentiate the two. Production management covers administer
all the activities which are involved in the process of production. On the other
hand, operations management entails all the activities involved in the production
of goods and delivery of services such as material management, quality
management, maintenance management, process management, process design,
product design and so on.

Production And Operations Management

Introduction

Production and operations management is an umbrella term which surrounds a spectrum of

ideas within the managerial circles. The core of any business is to provide the requirements of
the customer by providing apt services and goods and also create value for customers and
help in solving the problems of the customers.

Production and operations management is about implementing business organizational and

management concepts in the creation of goods and services.

Let’s have a precise look at what is production and operations management.

Definition:

Production and operations management is defined as the process which revamps the inputs
and resources of an organization into final products through a set of defined and controlled
rules that adds value to the final output of an organization.

In short, we can say that the Production and Operations Management (POM) is all about the
metamorphosis of the production and operational inputs into the final outputs when shared
can meet the requirements of the customers.

Production
Production is termed as a scientific process that includes the complete change of raw materials
(input) into the coveted product or services (output) by adding the value. The production
process can be categorized into the following technique:

Production through separation process: The desired output is achieved through the separation
or the extraction process from the raw materials. The primary example of this technique can
be the separation of oil into its various fuel products.

Production using the modification process: This process involves the change in chemical and
mechanical parameters of the raw material without changing the physical characteristics of the
raw material.

Production through Congregation process: The process of getting the final output by
assembling or congregating things together is termed as production through congregation
process. The best example is of the car and computer assembly.

Operations Management
To deliver the appropriate product to the customers, the following essentials are needed to
keep in mind for any organization:

1. Make the product or services after identifying the customers’ needs.

2. Based on product needs, do reverse working to check the available raw materials.

3. Employ internal and external vendors to create a supply chain for raw materials.

What is the difference between Production and Operation

Management?
Both the processes are more similar than different. When the manufacturing product process
is a prime interest, then it is called production management, whereas administration of the
services while manufacturing the product is called operation management.

Following are the high-level comparison between the Production and Operations Management:

1. Output

Production Management handles manufacturing of products while the operations management

covers both products and services.

2. Usage of Output

The use of products like computers, cars, etc. can be made over a period whereas the services
need to be consumed immediately.
3. Categorization of work

To outturn products like cars or computers more capital and fewer labor services are required
while in the operations department, more workers and less money is needed.

4. Customer communication

There is no participation of clients during the production phase, whereas for services the client
communication is a must.

Hence, we can say that production and operations management work hand-in-hand and are
very significant for meeting the needs and necessities of an organization.

Production vs Operation Management

Production management and operations management are management jargon that

needs to be simplified for those who are sitting on the fence or those inside an
organization unable to comprehend them clearly. Sometimes it becomes confusing to be
talking about production management inside operations management but they are
separate and distinct entities in the study of management as ultimately, production is a
part of the whole cycle of operations. Read on to clarify the doubts.

Operations Management

The study of set of activities comprising supervision, planning and designing of business
operations in the field of manufacturing of goods and services is termed as operations
management. The purpose of operations management is to make certain that the
operations of a business are efficient and effective and result in minimum of wastage.
Operations management tries to cut down resources involved in operations while at the
same time making operations more effective and productive. In fact operations
management is more concerned on processes than people or products. Operations
management in a nutshell is using physical resources in an optimum manner, converting
input into output, so as to supply to the market the desired and finished product.

Production Management

Production management on the other hand focuses specifically on the production of

goods and services and is concentrated upon churning output from input. It is a broad
sum of activities that go into turning raw material into final, finished product. One may feel
that production management is a subset of operations management, but production
management in itself is a broad subject that comprises production planning and control,
inventory management, and operations control. Production management includes all
management activities spanning selection. Designing, operating, controlling and updating
production system.