Introduction to Operations Management

Goods are tangible items (pencil, apple, chair) that satisfy the needs and requirements of human and provide utility. Goods can be consumable items useful to people, however they are scarce items in relation to the demand, therefore some effort is needed to get them. Some examples of goods can be computers, cars, engines for trucks and so on.

Service is a kind of economic activity that is intangible and a set of activities providing some combination of time, location, form or psychological value. Transfer of goods, such as the cargo service delivering a television, and the use of expertise or experience, such as a person having millions of dollars visits a financial investment expert are some examples for the services.

Operations management is the business function that plans, organizes, coordinates and controls the resources needed to produce a company’s goods and services (Reid & Sanders, 2013, p. 3). In other words, operations management designs, operates and improves production systems to get work performed. A group of interrelated activities, which are involved in the production of certain goods and services, is called operations management.

The transformation process can take the following forms:
• Physical: in manufacturing operations such as automobile manufacturing.
• Chemical: in manufacturing operations such as paper manufacturing.
• Locational: in transportation or warehouse operations such as delivery of a refrigerator to home.                                                                                     • Exchange: in retail operations such as buying a shirt from a retail shop.
• Psychological: in entertainment operations such as going to a holiday.
• Informational: in communication operations such as calling a friend from a
cellular phone.

Some of the important key concepts of operations management are resources, systems, transformation and value addition activities. 

Resources involve human, materials and capital inputs to the production process. Systems are the set of inputs in interaction designed to achieve goals according to the plan. The purpose of transforming all the inputs into goods and services is to have a higher value than the original inputs.

Information system is a function that enables information to flow throughout the organization and allows operations management to operate effectively. While jobs are done in operations unit, many information is needed such as forecasts of demand, required quality level, inventory level, supplier deliveries, and so on.

In order to hire the right people to the right jobs, human resource managers must have information about the job requirements. On the other hand, operations managers need to understand job market trends, hiring and firing costs and training costs to manage the employees effectively.

Industrial revolution is a movement that changed the way of production of goods from labor power to machine power. Industrial Revolution began in the 1770s in England and spread to the rest of Europe and to the United States during the 19th century. Some important changes in the 18th century changed the structure of production such as using machine power instead of human power. 

One of the most important trends within companies today is time-based competition which is developing, producing and delivering new products to customers faster than competitors.

Coordination of the relationship between the company and the suppliers: Many companies prefer to buy parts and services from outsourcers instead of producing them internally. This decision increases the level of outsourcing and related activities such as wrapping, packaging, moving and loading. Moreover, a lot amount of time and cost spent for these activities. The responsibility of these outsourced goods and services brings the question of safety for the companies.

Managing customer contact: Today companies try to become more customer focused and interact well with them. For this purpose, they provide some services such as help lines, call centers, checkout counters. However, if the personnel in these service departments are not sufficiently trained, it causes frustration and many unsatisfied customers.

E-business is any type of business or commercial transaction including share of
information across the internet. By the emergence of the Internet, e-business increasingly takes place among companies and customers. Moreover, e-business has added new dimensions to business both in buying and selling activities and this change in business has presented new challenges.

The scope of operations management includes many activities such as product design, process and technology selection, job design, location of facilities, plant layout and material handling, production planning and control, quality control, forecasting, capacity planning, scheduling, inventory control, maintenance, materials management, distribution and logistics and after sales service.

Flow process is the continuous movement of products through the production process and when one task is finished the next task starts immediately.

Job-shop process is a type of production process in which small amounts of a variety of custom products are made.

Cellular process is the production of similar products using cells or work stations to facilitate operations by the elimination of setup and unneeded costs among operations.

Total quality management is a philosophy that involves everyone in the company in a continual effort to improve quality and achieve customer satisfaction.

Agile manufacturing is the capability to survive and to be successful in a competitive environment by responding quickly and effectively to changing market needs and requirements.

There are four primary types of mass customization which move mass production to a new level (Pine II, 1993): These are;
1. Collaborative customization: Companies work in partnership with customers to offer products or services uniquely suited to each customer.
2. Adaptive customization: Companies produce standardized products which the customer may customize.
3. Transparent customization: Companies provide unique products to individual customers without overtly stating the products are customized.
4. Cosmetic customization: Companies produce standardized products but market them in different ways to various customers

Six Sigma is a data-driven approach and continuous improvement methodology for eliminating defects in a product, process or service. Six Sigma emphasizes both cycle-time improvement and reducing manufacturing defects to a level of no more than 3.4 occurrences per million units or events.

Computer integrated manufacturing(CIM) is a manufacturing approach that provides a complete automation of a manufacturing facility by using various technologies like computer-aided design and computer-aided manufacturing.

e-Manufacturing is a transformation system that gives to the production the ability of achieving predictive near-zero-downtime performance and also synchronizing with the business systems through the use of webenabled and tether-free (i.e., wireless, web, etc.) infotronics technologies.