What kind of firms use operations managers

Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.

I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Business Essentials Guide to Mergers and Acquisitions. Business Business Essentials. Key Takeaways Operations management is the administration of business practices to create the highest level of efficiency possible within an organization.

Operations management is concerned with converting materials and labor into goods and services as efficiently as possible. Corporate operations management professionals try to balance costs with revenue to maximize net operating profit.

What Is an Example of Operations Management? Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms Supply Chain Management SCM Supply chain management SCM is the management of the flow of goods and services as well as overseeing the processes of converting original materials into final products.

Supply Management: An Overview Supply management is the act of identifying, acquiring and managing the resources and suppliers that are essential to the operations of an organization. Facility layout is the arrangement of the workspace within a facility. It considers which departments or work areas should be adjacent to one another so that the flow of product, information, and people can move quickly and efficiently through the production system.

Once a product is developed and the manufacturing system is designed, it must be implemented, a task often more easily discussed than carried out. IF the system design function was done thoroughly, it will have rendered an implementation plan which will guide activities during implementation. Nonetheless, there will inevitably be changes needed. Decisions will have to be made throughout this implementation period about tradeoffs.

For example, the cost of the originally planned conveyor belt may have risen. This change will make it necessary to consider changing the specified conveyor belt for another model. This, of course, will impact upon other systems linked to the conveyor belt and the full implications of all these changes will have to be assessed and compared to the cost of the price increase on the original conveyor belt.

Running an efficient production system requires a great deal of planning. Long-range decisions could include the number of facilities required to meet customer needs or studying how technological change might affect the methods used to produce services and goods. The time horizon for long-term planning varies with the industry and is dependent on both complexity and size of proposed changes.

Typically, however, long-term planning may involve determining work force size, developing training programs, working with suppliers to improve product quality and improve delivery systems, and determining the amount of material to order on an aggregate basis. Short-term scheduling, on the other hand, is concerned with production planning for specific job orders who will do the work, what equipment will be used, which materials will be consumed, when the work will begin and end, and what mode of transportation will be used to deliver the product when the order is completed.

Managing the system involves working with people to encourage participation and improve organizational performance. Participative management and teamwork are an essential part of successful operations, as are leadership, training, and culture. In addition, material management and quality are two key areas of concern. Material management includes decisions regarding the procurement, control, handling, storage, and distribution of materials. Material management is becoming more important because, in many organizations, the costs of purchased materials comprise more than 50 percent of the total production cost.

Questions regarding quantities and timing of material orders need to be addressed here as well when companies weigh the qualities of various suppliers.

To understand operations and how they contribute to the success of an organization, it is important to understand the strategic nature of operations, the value-added nature of operations, the impact technology can have on performance, and the globally competitive marketplace.

What factors influence buying decisions for these entities? Production planning allows the firm to consider the competitive environment and its own strategic goals to find the best production methods. Good production planning has to balance goals that may conflict, such as providing high-quality service while keeping operating costs low, or keeping profits high while maintaining adequate inventories of finished products. Sometimes accomplishing all these goals is difficult.

Production planning involves three phases. Long-term planning has a time frame of three to five years. It focuses on which goods to produce, how many to produce, and where they should be produced. Medium-term planning decisions cover about two years. They concern the layout of factory or service facilities, where and how to obtain the resources needed for production, and labor issues.

Short-term planning, within a one-year time frame, converts these broader goals into specific production plans and materials management strategies. Four important decisions must be made in production planning. They involve the type of production process that will be used, site selection, facility layout, and resource planning. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads.

Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors.

Your Money. Personal Finance. Your Practice. Popular Courses. Business Business Essentials. Business Essentials Guide to Mergers and Acquisitions. Key Takeaways Operations management theory encompasses the strategies companies employ to increase efficiency in operations and production. To operate efficiently, firms should use the least amount of resources needed and strive to meet the customer's requirements to the highest possible standard.

Maximizing resources involves managing how raw materials and labor are used to create final goods and services. Modern operations management is comprised of four theories: business process redesign BPR , six sigma, lean manufacturing, and reconfigurable manufacturing systems. Article Sources.