OPERATIONS AND HUMAN

RESOURCE MANAGEMENT
 LESSSON 1
Production/Operations Management
“Production is an activity that converts materials into useful forms. The materials may be raw materials, semi-processed,
or semi-finished goods, or even finished products. Machinery, equipment, methods, and processes are the basic elements
of production” (Burstiner 1997).

The 5Ms of Production Management by Robert and Chad Counts (n.d):

1. Method- the manager will determine the most efficient way for each portion of the process to eliminate areas where
time and manpower.

2. Manpower- is the ideal number of people it will take to perform these methods and what positions should they
be in.
3. Machine- do all workers have access to the same tools and equipment if needed? Do the tools enable them to perform
tasks independently? Are they trained on how to maintain the machinery and tools?
4. Materials- do you have materials needed to perform all parts of production? Does the layout of the production
department minimize wasted movement?
5. Money- do you have enough profit to buy materials and machines that are needed to perform production?

On the other hand, operations management refers to the activities, decisions and responsibilities of managing the resources
which are dedicated to the production and delivery of products and services. You must be creative, innovative and energetic
in improving processes, products and services.

4 main advantages of an effective operation to the entrepreneurs business:

 Reducing the cost the costs of producing products and services, and being efficient
 Increasing revenue by increasing customer satisfaction through good quality and service
 Reducing the amount of investment that is necessary to produce the required type and quantity of products and services,
by increasing the effective capacity of the operation
 Building a solid base of operations skills and knowledge within the business
 Plan and control
production

Adopt the
Ensure quality standard
control production
models

Manage Design plant

inventory/stock layout for better
well efficiency

Maintain machine
and equipment
properly
 Production/operations Management Practices
Plan and control production- production planning and control is the key to efficient and effective production
management. It deals with decisions that will enable the entrepreneur to produce goods. When the entrepreneur plans
ahead, one can anticipate problems, and work out solutions to prevent problems from occurring.
Adopt the standard production models- adopting the standard production models that can help make this
part of the business operate efficiently and economically.
Design plant layout for better efficiency- this means arranging and putting together the right space,
appropriate furniture, and proper equipment in such a way as to minimize the movement and handling of materials.
According to DTI-BSMED, “a good layout is one that facilitates the manufacturing process, minimizes materials
handling, maximizes use of floor area , and provides safety, and comfort at work.
Choose the right machines and equipment- the choice of machine and equipment affects the overall
profitability of your business. The DTI-BSMED Guide (2010) indicated that when choosing machines and equipment,
the following considerations should be kept in mind by the entrepreneur:
 Operating characteristics- the most important thing in selecting supplier or brand for a particular machine. Decide
on what type of the following models will meet your requirements.
 Engineering feature- these features must be compatible with your other equipment, process, and plant
layout. Consider the machine’s physical size, power requirements, maintenance, and safety features.
 Cost- after you’ve found several machines that fit your requirements, analyze and compare the cost of each
machine in relation to it’s capacity, efficiency in it’s use of fuel, and other technical considerations.
 Qualitative factors- consider all possible suppliers before making a final decision. Who among them are
willing to provide installation assistance, warranty and/or maintenance service? You can also subcontracting
part of your process so you need not buy an expensive piece of equipment. There are advantages and
disadvantage to each option. Carefully study each option before deciding on one.

1. Purchase based on needs and on time- determine correctly what needs to be ordered, the reliable sources
of supply; the quotations, prices and terms of supplies; and the contracting for the supplies or services.
Check the goods upon delivery, or services upon completion, before final payment.
2. Maintain machines and equipment properly- it is important to keep the machines good in running
condition. Their proper care and maintenance ensures that there is no disruption of production due to
machine breakdown. Some tips for proper maintenance are: cleaning machine parts after every use;
applying lubrication on machines regularly (at least once a week); checking for worn-out parts at least once
a month; checking electrical parts and wiring every month; and calibrating machines regularly.
3. Manage inventory/stock well- avoid poor inventory practices it is not a good practice to keep too much or
too little quantities of materials and goods in stock.
4. Ensure quality control- check the quality of your raw materials, calibrate measuring and testing equipment
regularly, maintain machines properly and make sure they are in good condition, conduct adequate test to verify
whether the product meets quality standards or not, and inspect for quality.

LESSON 2
HUMAN RESOURCE MANAGEMENT
According to Noe, Hollenbeck, Gerhart, and Wright (2006), human resource management (HRM) refers to “the
policies, practices, and systems that influence employees’ behaviour, attitudes, and performance.” As cited
further by Noe, at al. (2006), effective HRM has customer satisfaction, innovation, productivity, and
development of a favourable reputation in the firm’s community.
 Design an Implement an
effective attractive
Get the right people
recruitment compensation
strategy scheme

Adopt a good Design work-family

Prepare an employee
selection process balance programs
manual

Observe fair Effectively

Develop effective Invest in human communicate policies
training programs employee relations
practices capital and practices with
employees

Conduct performance Determine the Maintain employees

entrepreneurs role in Motivate people in
management the workplace commitment and
the business loyalty
Human Resource Management Practices
Design an effective recruitment strategy- all companies have to make decisions in three areas of
recruiting: personnel policies, recruitment sources, and the characteristics and behaviour of the recruiter.
Adopt a good selection process- it is a process by which the organization attempts to identify applicants
with the necessary knowledge, skills, abilities, and other characteristics that will help the organization achieve its
goals.
Develop effective training programs- planned by the company to facilitate employees learning of job-
related competencies.
Conduct performance management- a process through which managers ensure that employees activities
and outputs contribute to the organizations goals.
Implement an attractive compensation scheme- refers to all forms of financial returns and tangible
services and benefits that employees receive as part of an employment relationship.
Design work-family balance programs- which and individual is able to simultaneously balance the
temporal, emotional, and behavioural demands of both paid work and family responsibilities.
Observe fair employee relations practices- is an interaction between employees and employer to attain
their perspective goals, while accommodating the needs of both parties.
Determine the entrepreneurs role in the business- many small business begin with the founder-owner
doing all the management functions of marketing, production, human resource, and finance without the help of
specialized staff. The following factors can help the entrepreneur to choose which role to take:
 Education and Training- if you are an engineer or you have some technical training, it will be natural for
you to consider being in the technical or production area.
 Experience- it is important for you to be handy in performing certain management functions.
 Interest and Talent- not having the education or the experience to back up your inclination to take on a
specific management function will not disqualify you. If you enjoy working with your hands and putting
things together, you can handle production.
 Time- ask yourself if you are able and will have the time to handle all the management functions in case you
decide to be on top of everything.
 The Pros and Cons of Having a Bird’s Eye View- finally, weigh the advantages and disadvantages of having
a broad view of your business. Being “everywhere” in your business will allow you to see the interrelationship
among management areas.
Get the right people- do not limit applicants to the trained and experienced. Be open to those who can help the
enterprise grow. Choose the people who possess the expected work values and are willing to be trained and
to stay in the company after being trained.
Prepare an employee manual- this should contain information pertaining to company policies and procedures
on working conditions, compensations, other benefits, discipline, and among others.
Invest in human capital- allocate sufficient budget for the cost of specialized training that human resources
may need to meet the skills necessary to be able to make the product or complete the service to be offered
to acquire or develop market.
Motivate people in the workplace- motivation is a function of willingness and ability to do the job, as well as
help employees work at high energy levels.
Maintain employees commitment and loyalty- one way of doing this is to ensure that the work environment is
safe, healthy, caring for employees, and at least compliant with government rules and regulations, as
well as company social responsibility.
Effectively communicate policies and practices with employees- communication is very important so that
employees feel they are really part of the organization and when employees know that they are given
the opportunity to give feedback to the concerned stakeholders in the enterprise, they will feel valued
and respected. This can lead to better performance and higher productivity.