Zarina Luz R.

Bartolay OPERATIONS MANAGEMENT AND TQM

BSA 2-8 Leopoldo Francisco T. Bragas, PHD

ASSIGNMENT # 2
1. Functions and Roles in Operations Management

• Planning and implementing manufacturing plants – in order to produce

finished goods to be sold to customers, manufacturing plants should be planned
and implemented. This would also make the production process efficient.
Example: The managers holding a meeting for the construction of a new
manufacturing plant in Laguna.

• Managing projects – operations management involves projects that are being

taken by the company and thus would apply the processes, methods, skills, and
knowledge in order to achieve specific objective associated with that project.
Example: Determining the amount of funding needed

• Planning information systems – creating sets of interrelated procedures using

IT infrastructure in a business enterprise to generate and disseminate desired
information.
Example: Enterprise Resource Planning

• Helping to design and develop products and services – Operations

management is also involved in the development of products and services of a
business enterprise.
Example: designing the cover for a new product

• Managing inventory through the supply chain – Inventories are considered as

huge investment that every stage of the supply chain needs to acquire wherein
every stage would work independently to make the supply chain profitable.
Example:

• Managing delivery to customers in a timely manner – this would help the

management to monitor their product delivery system in order to be efficient and
profitable.
Example: Having records of when the customers put out an order and the
schedule when it is to be delivered to the customers

• Optimizing quality control – saving time and resources by maximizing the

efficiency of operations from supplier control to executive reporting; minimizing
maintenance disruptions etc.
Example: Data Mining

• Conducting procurement/purchasing – the management would also get the

responses from potential sellers, choosing the selling, and awarding the contract
to the chosen seller.
Example: The purchasing manager would deal with different suppliers and would
choose who among these suppliers would be offering a quality and cost-efficient
products.

• Managing logistics – a part of the supply chain management that plans,

implements and controls the efficient, reverse flow and storage of goods,
services, and related information between the point of origin and the point of
consumption in order to meet customer's requirements.
Examples: Inbound transportation, outbound transportation, Fleet management

• Managing transportation and distribution – the management would track and

manage every aspect of vehicle maintenance, warehousing, communications,
carrier selection and management.
Example: The management of a company would keep records of their
transportation vehicles.

• Managing and maintaining facilities – checking the EHS (environment, health

and safety), fire safety, security, maintenance, testing and inspections, as well as
ensuring that the facilities are well maintained in all the different aspects.
Example: Facility Inspection

• Conducting enterprise resource planning (ERP) – the organization would be

able to manage the office and automate the business functions in order to have
an easy access to data as well as improve its usage.
Example:

• Forecasting for planning – the organization would also need to forecast the
performance of the business in the future by evaluating its performance in the
past and present.
Example: The management predicting that the next year’s sales would increase
by 30% based on their performance this year.

• Planning for capacity – After the forecast, the management would take on the
capacity planning. They would be identifying and measuring the overall capacity
of production. This would ensure that costs are maintained at a minimum
possible level without affecting the quality of the product or service.
Example: If your company has 10 employees who each work 40 hours per week,
then the company has 400 hours of weekly capacity. Without factoring in
overtime, this company could handle a maximum of 400 hours of business each
week.

• Analyzing the value chain – The management will be recognizing the activities
that are valuable as well as those activities that could still be improved in order to
provide competitive advantage.
 • Optimizing resource usage – Efficiently organizing and allocating personnel
and equipment for different purposes while at the same time avoiding idle
resources. In order to optimize effectively, allocating the right resource to a
specific activity would help to know whether that resource would be able to
perform a particular task.

• Eliminating waste and bottlenecks – Bottleneck is a point of congestion in a

production system that occurs when workloads would arrive too quickly for the
production process to handle. In order to avoid problems, the management would
be eliminating the waste and bottlenecks by adding more resources, minimizing
downtime, or eliminating non-value activities.
Example:

• Continuously improving processes – The management would always focus on

continuously improving the processes of the operations to be more profitable and
efficient.
Example: From the traditional manual labor to utilizing machineries and
equipments

• Executing a company’s strategic plan – One of the most important is by

executing a strategic plan in order to carry out the activities needed to meet those
goals and objectives aimed by the organization
Example: Yearly Strategic Plan

2. Operations Management Strategies

• Use of Data: Analytics are essential for strong planning, adjustments, and
decision making. Two common types are efficiency metrics and effectiveness
metrics.
• Inventory Analysis: To manage inventory in the supply chain, ABC analysis
(also called Pareto analysis) comes into play. It divides inventory into three
categories A, B, and C; “A” has the most value and tightest controls, and “C” has
the least. Example: ABC Analysis
• Data Challenges: Data is often siloed, which makes it difficult to compare.
But newer systems and setups are making this easier and helping analysts and
managers examine data in new, helpful ways.
• Process Design: Researching, forecasting, and developing a sound process
takes expertise and energy, but the results can be lasting.
• Forecasting and Goal Setting: The best forecasting often combines a look
at historical data with analysis of changing conditions. Example: a company might
use its past sales information to make predictions about what its sales volume will
be for the next 12 months.
• Collaboration Among Departments: With good communication and
collaboration, operations management can work effectively with finance, sales,
marketing, human resources, and other departments. Example: Human
 Resources Department cooperating with the Marketing Department about the
performance of the employees.
• Being Green: Ecological soundness has become a strategic and legal
necessity at companies nowadays, especially in manufacturing.
• Managing People: With all the advancements in machinery and technology,
people remain critical to the equation, though often in different types of jobs.
Example: Meeting with the workers about their opinions and suggestions to the
company.

3. Levels of Operations Management

You can think of operations management as three levels: strategic, tactical, and
operations. To achieve the company’s goals, operations managers develop
strategies. Under those broad strategies are tactics, or specific tasks and steps to
implement the strategies. The third level, operations, refers to the daily control of
production, such as scheduling, monitoring, and adjusting.

Strategic - is an organization’s process of defining its strategy, or direction, and

making decisions on allocating its resources to pursue this strategy.
Tactical - is short range planning emphasizing the current operations of various
parts of the organization.
Operations - process of linking strategic goals and objectives to tactical goals and
objectives.

4. Principles of Operations Management

Randall Schaefer, CPIM, described The 10 Principles of Operations Management

at his presentation at the 2007 conference of the American Production and
Inventory Control Society (APICS).

• Reality: There is no universal solution to the problems in your business.

• Organization: You must organize all aspects of production into a coherent
whole.
• Fundamentals: Adhere to fundamentals, such as accurate inventory records.
• Accountability: People try harder when they’re held accountable.
• Variance: Variance is part of every process.
• Causality: Problems are often symptoms. Get to the root cause.
• Managed Passion: People with a passion for their jobs will drive your
company.
• Humility: You don’t have to know everything.
• Success: Define success, and change with the market.
• Change: Every manufacturing solution is temporary.

Another set of operations management principles comes from author Dr. Richard
Schonberger. His 16 principles are:
• Team up with customers. Know what they buy and use. – Being aware of your
customer’s wants and needs would enable you to develop and improve your
products and services.
• Engage in continual, rapid improvement.
• Maintain a unified purpose. Involve employees in strategy. – It is important
that your employees would know the strategies to be implemented by the
organization in order that they would be able to help achieving the objectives and
goals of the organization.
• Know the competition. – Do not rely on your own products. Know who your
competitors as well. With this, you’ll have an idea as to what to improve and what
to avoid as such.
• Focus. – Focus on the main priorities of the organization.
• Organize resources. – Organizing the resources would help in carrying out the
production processes of the organization
• Maintain equipment.- Always keep the equipment properly maintained at all
times.
• Use the simplest, best equipment. – As long as your equipment would work in
order to satisfy the needs, choose the best and simplest equipment as possible.
• Minimize human error.
• Cut times. Shorten the product path to the customer.- This would reduce costs
and improve efficiency.