Business Management: Operations As a Competitive Weapon

This article introduces the terminology used in operation management.

  • What is operations management?

The operation management is the systematic design, direciton and control of processes that transform input into services and products for the internal, and external customers.

  • Why study operation management?

Understanding the operation management helps you understand how the process you are a part of fits into the overall fabric of the business, and helps you get prepared to manage a department or a particular process in your discipline. As a manager, it is also critical for you to understand how your business partner works. Operation management helps you understand how different functions in the business work together.

  • What’s the goal of a operations manager?

The operations manager’s decisions should reflect the corporate strategy. The plns, policies and actiosn should be lined to those in other fnctional areas to support the firms goal and objectives.

  • What is process?

Every processes has a sub process, which is often called a nested process. For example, a planning processes on the department level often has subprocesses on the team level.

  • Why process view helps us better understand how the firm works?

Process view of the firm provides a much more relevant picture of the way firms actually work. Department or organization view only gives you a static view of the firm, while the process help you understand how the work and information flows through the organization. An organization is only as effective as its processes.

  • What is customer of the process?

Customers: process often provide outputs to customers. Some are external customer, who is either an end user or an intermediary buying the firm’s finished services or products. Some are internal customers, one or more employees or processes that rely on the input from other employees or processes in order to perform their work.

  • What is the supplier of the process?

Every process relies on the suppliers. There are external suppliers who are business or individuals that provide resources, services, products and materials for the firm’s short-term and long term needs. And there are internal suppliers who are employees or processes that supply important information or materials to a firm’s processes.

  • What is service and manufacturing processes and why are they important?

The service and manufacturing processes are the two major types of processes. The two are different from each other at the nature and the degree of customer contact. Manufacturing processes convert materials into goods that have a physical form we call products, while service processes tend to produce intangible, perishable outputs. On the other hand, services processes tend to have a higher degree of customer contact, ,while manufacture process tend to have less.

  • What is the value chain?

The value chain is an interrelated services of processes produces a service or products to the satisfaction of customers. Process must add value for customer.

  • Why value chain is important for operation management?

The managers should examine the processes from the perspective of the value to understand the effectiveness of the them.

  • What are the basic step of decision making?

First, recognize and clearly define the problem, then collect the information needed to analyze possible alternatives, next choose the most attractive alternative then implement the chosen alternative.

  • What is strategy decision and what is the tactic decision?

Strategy decisions are less structured and have long term consequence, tactical decisions are more structured, routine and repetitive and have short term consequences.

  • How do you leverage the strategical decision and the tactical decision?

You design new processes that have strategic implications and deeply involved in the development and organization of value chain linking external suppliers and external customers to the firm’s internal processes. Manager also involves in the tactical decision that supports the strategical decisions, including process improvement and staffing plans etc.

  • How does the global trade change the operation management?

Operation managers must now view customers, suppliers, facility locations and competitions in global terms. They need to design the operation process by involving the materials and services from all over the world. One major factor spurred the need for sound global strategies is the comparative cost advantage. For example, china for manufacture and India for services as they are sources for low cost but skilled labor.