Significance of Operations Management:
Business firms need to formulate brilliant operations strategies in order to survive in the market for long. Focus on finance and marketing alone is not sufficient to compete in the global market. The emergence of innovative products and processes from leading companies in different parts of the world is a clear-cut evidence to prove the significance of operations function. Operations management is gaining importance, thanks to public awareness on quality and its applicability in service operations too.
Advent of Industrial Revolution:
Until the advent of machinery, each and every nation was dependent on agriculture, which was the prime economic activity. After the industrial revolution of the eighteenth century, mechanization in a large scale converted agricultural economy to an industrial economy. Slowly scientific principles were introduced into production activities to make it more systematic and thus “Production Management” evolved. Now service operations have also gained momentum and since the concepts and techniques of production management are applicable to service operations too, it is rightly called as “Operations Management.”
Operations management functions at three different levels.
At the strategic level, the operations manager must have a long term vision, as to shape up the company’s success in the light of strategic decisions taken, with the approval of the top management. His area of concern would be,
At the tactical level, the operations manager is concerned about the planning and scheduling operations of the desired output. His area of concern would be:
At the operational level, the job of the operations manager is to accomplish the “set targets”, by performing various coordinating and controlling functions. His area of concern would be:
These functions are by no means exhaustive, but only indicative. The process of planning and control operations is not done in water tight compartments, but are interactive and integrative feeding on one another and also aligned in line with the overall corporate objectives. The strategies are evolved for the purpose of efficient utilization of the available resources as well as to predict the changes in the external business environment that calls for suitable action to limit their impact on the goals of the organization, in terms of cost, quality and delivery schedule.