ii

TABLE OF CONTENTS
Page

Statement of Authorship...................................................................................................
Table of Contents ............................................................................................................
List of Pictures ...............................................................................................................
CHAPTER ONE. INTRODUCTION.................................................................................
CHAPTER TWO. THE ANSWER SHEET.......................................................................
Question 1....................................................................................................................
1.1. What is operations management?
Why is operations management important in all types of organization?.................
1.2. What are the activities of operations management?..............................................
Question 2....................................................................................................................
2.1. Why is operations performance important in any organization?...........................
2.2. What are the performance objectives of operations?
What are the internal and external benefits which
derive from excelling in each of them?..................................................................
Question 3....................................................................................................................
3.1. What is planning and control?............................................................................
3.2. What are the activities of planning and control?..................................................
Question 4....................................................................................................................
What is supply chain management?
What are the activities of supply chain management?............................................
Question 5..................................................................................................................
What is ERP?
How should ERP systems be implemented?.........................................................
CHAPTER THREE. CONCLUSION...........................................................................
References................................................................................................................
iii

LIST OF PICTURES

No. Name of picture Page

Picture 1.1 The annual report of United Way (2019) 02
Picture 2.1 Competitiveness by operations excellence 04
Picture 4.1 The Amazon’s supply chain 09

Chapter One: INTRODUCTION

This essay will be presented a summary of issues and techniques of operations
management by answering following five questions. Also, some examples will be
iv

given in order to clarify the definition, as well as generate an overview of all activities
that should be done in an organization.

Chapter Two: THE ANSWER SHEET

Question 1
1.1. What is operations management? Why is operations management
important in all types of organization?
Essentially, operations management is about how an organization produces goods and
services in which operation managers strive to balance costs with revenues in order to
maximize net operating profit, as well as keep an organization running smoothly.
Also, it is concerned with converting raw materials and labor into the most productive
goods and services possible. That means operations management is important in all
types of organizations; any business that produces something, whether tangible or
intangible, must use resources to create outputs that fulfill defined market
requirements. There are some details that would be given to prove it.
Firstly, in the health sector, operations management ensures the provision of
appropriate and timely medical services; nurses, doctors, and other health officers
could provide timely services. Moreover, when something is missing, a technical and
savvy individual would know what is at fault (skedulo.com).
Secondly, in the business field, operations management is the heart since the optimum
utilization of resources would generate enormous profits for the organization; as well
as employee efforts and various raw materials are used effectively and converted into
the services and goods required by that organization.
Third, in the hospitality industry, which mainly operating services rather than goods;
operating activities are critical because the operation managers have to oversee all
daily activities in the hotel organization. Also, they take on a variety of tasks
including managing everything from accounting, business development, and customer
service.
v

Due to those three different industries, it is clear that an organization is able to make
good use of its resources such as labor, raw material, money, and others with the help
of operations management. Besides, almost everyone believes that operations
management is only relevant for organizations whose purpose is to make profits;
however, that is also important in a nonprofit organization with more complex
strategic goals which involve a mixture of political, economic, social, and
environmental. Its operation managers would be responsible for directing fundraising
efforts, monitoring government regulations, and guiding public policy (chron.com);
for instance, the United Way organization, all of their activities depend on effective
and professional operations management like a key source of income is for every
dollar donated to them, 86 cents go to their mission with overhead rates vary at local
United Ways (unitedway.com). Also, their leadership team involves people from all
sectors of society to create innovative solutions that address the most complex
challenges of their time. Lastly, United Way brings people and organizations to work
together - nearly 2.6 million volunteers and 9.6 million donors, these numbers are
increasing monthly; it proves that United Way’s operations management is going the
right way.

Picture 1.1 The annual report of United Way in 2019

(source: unitedway.org)
vi

1.2. What are the activities of operations management?

Activities and functions often depend on how the organization has chosen to define
them. Each organization has a different objective; therefore, the detailed activities
might also be different. However, there are still a few general activities that apply to
all types of operations. Understanding the strategic performance goals of the operation
is the first activity as well as the first responsibility of any operations management
team; it could be referred to as an understanding of how to measure the performance
of the operation at different levels, from broad strategic to more effective operational
performance objectives. The second thing would be developing an operational
strategy. A set of general principles that guide decision-making towards the long-term
goals of that organization would be the most important in this activity since every
single decision can have an immediate impact on the organization. After that,
designing the operation’s products, services, and processes; as well as planning and
controlling those operations would be done. That is the activity of deciding what the
operation resources should be doing, then making sure that they really are doing it.
Last but not least, it is to improve the performance of the operation, which is the
continuing responsibility of all operations managers.

Question 2
2.1. Why is operations performance important in any organization?
The first reason is that the operations performance has affected the profitability of a
company. For example, according to research by Nikos Tsikriktsis (researchgate.net),
bad quality would lead to dissatisfaction and dissatisfied customers tend to defect, as
well as bad word of mouth for the company; both of which have a negative impact on
profitability. On the other hand, reliable delivery with a good quality, which could
result in cost reduction since there is no need for expediting and extra labor; indeed,
customers could be willing to pay more to do business with a company with a better
delivery record. Secondly, operations performance would give a company a
competitive advantage because it creates the ability to deal with important internal
vii

and external factors. Some of the key internal factors include intellectual capital,
operating policy, and average attrition rate. The external factors are to improve
competitiveness through low costs, high levels of service, lower operational risk,
lower capital requirements, and providing the capabilities that determine future

innovation (picture 2.1)

The last reason is that operations could help satisfy a wide range of stakeholders.
They are groups that have a legitimate interest in the operation’s activities. Some
stakeholders are internal, for example, employees; others are external such as the
company’s customers, society or community groups, and shareholders. In nonprofits,
these stakeholder groups may overlap; it means voluntary workers in a charity could
be employees, shareholders, and customers at the same time. However, in any type of
organization, the operations function has a responsibility to understand the objectives
viii

of the stakeholders and set these accordingly. As a result, it can be said that operations
performance is vital for any organization.
2.2. What are the performance objectives of operations and what are the
internal and external benefits which derive from excelling in each of them?
According to Andy Neely, author of the book “Business Performance Measurement:
Unifying Theory and Integrating Practice”, there are 5 basic operational performance
objectives: quality, speed, dependability, flexibility, and costs. In order to clarify all
five objectives, the hospital would be used as an example organization.
Firstly, quality is considered as a measure of how well a product conforms to certain
specifications; for example, patients receive the most appropriate treatment, counseled
and informed by polite and helpful staff. Thus, quality not only influences customer
satisfaction but also leads to stable and error-free internal process.
The second objective is speed, which measures how fast companies can deliver their
products. Speed objectives refer to the time required to manufacture and process the
product or to research a new product and develop it; such as the time from request to
treatment and test results of patients must be kept to a minimum. Externally, speed is
an important aspect of customer service. While inside the operation, speed reduces not
only risks by delaying the commitment of resources but inventories by decreasing
internal throughput time as well.
Third, it is operational dependability, which measures how reliably the company can
deliver products to customers on time; for instance, the patient’ test results are
returned as promised. Therefore, internally, it generates reliable processes; and the
external impact is a dependable distribution to customers.
The next objective is operational flexibility, which to deal with various requirements
and to also quickly adapt new requirements; such as being able to adjust the number
of patients, reschedule appointments as well. The internal effect of this performance
objective is the organization's ability to change; conversely, there is more impact on
externality such as frequent new goods and services, variety, volume, and delivery
adjustments.
ix

Lastly, it is variation in costs; even companies that are not price competitive would be
interested in keeping costs low as every dollar removed from the operation’s cost base
is another dollar added to profits. Consider, in hospitals, the cost objective for
operations managers is to strike a balance between the high-tech treatment needed and
community centers that offer preventative services; also, providing additional primary
health care institutions could help avoid the need for expensive emergency services.
In terms of external impact, it would be low prices, high profit margins, or both. On
the other hand, internally, cost is influenced by the other performance objectives; they
generate high total productivity inside the operation.

Question 3
3.1. What is planning and control?
Planning and control involve in operating those resources on a daily basis and
ensuring the availability of raw materials and other variable resources to provide
goods and services that meet customer needs. Also, it provides the systems,
procedures, and decisions that bring together different aspects of supply and demand;
in order to ensure that the operation’s processes take place effectively and produce the
products according to the customer’s requirements. In detail, planning is a
formalization of what is intended to happen at some point in the future; on the other
hand, control is a process of dealing with any changes in the plan, which can mean
that an intervention is required in the operation to get it back “on track”. Even though
planning and control are different in theory, they are usually handled together;
because control can make adjustments that allow the operation to achieve goals set by
the plan, even if the assumptions in the previous plan are incorrect. For example,
when a surgery is booked, much of the planning has to be done, doctors and nurses
are already informed, the pre- and post-operative care is organized accordingly; in
addition, control processes are in place, such as ensuring patient information is correct
and all necessary medications are provided. Besides, there are some changes over
time in terms of the balance between planning and control. While planning is usually
x

done on an aggregate basis, which takes a long-term period; control operates in a

short time under resource constrained conditions as well as implementing operational
interventions in response to short-term changes in circumstances
3.2. What are the activities of planning and control?
Planning and control require a reconciliation between supply and demand in terms of
volume, time, and quality. Due to that, there are typically four distinct activities,
namely: loading, sequencing, scheduling, and monitoring and control. All four
activities will be clarified with examples taken from the hospital.
First, load operations refer to the work load that is allocated or assigned to any
workstation. It is divided into two types which are finite load and infinite load. Finite
load is an approach to plan and control a work center (a person, a machine, or perhaps
a group of people or machines) to allocate only up to a limit or maximum of useful
capacity. In the hospital, it is usually done under a normal condition; for example,
their appointment system will limit the load per day. By contrast, infinite load is a
situation where work is allocated regardless of capacity or other limitations; such as in
an emergency, the hospital is bound to follow the infinite load.
The second operation to consider is sequencing, whether the load approach is finite or
infinite, the decision will depend on what the order of performed works. This is a
crucial stage for the hospital, all decisions must be made such as the order in which
patients should be treated, which must depend on a number of pre-existing rules in
operational management such as physical constraints, customer priority, and due date.
Physical constraint means that the physical nature of materials being processed can be
predetermined; for example, a patient in an emergency is treated first. Next, it is
customer priority, allowing a vital or aggrieved customer, or item, to be processed
prior to others, regardless of the order in which the customer or item arrives. In
hospital, similarly, a triage system is used, which is a method for systematic
prioritizing of patients’ treatment according to how urgent they need care
(Wikipedia). The final sequencing operation is due date; it means works are
xi

sequenced depending on when the delivery is due. Obviously, this approach can help
organizations improve their average delivery speed.
The next activity is scheduling, defining the detailed timetable of activities. This is a
complex task in operations management since the scheduler has to handle different
types of resources at the same time such as each machine/equipment will have its own
capacity, as well as employees will have different skills. In addition, there are two
types of scheduling, forward and backward. Forward scheduling refers to starting
work as soon as it arrives; conversely, backward scheduling involves starting work at
a last possible time according to the due date. In general, the main task of scheduling
operation is to ensure that there are enough people working at any given time in order
to provide a capacity that is appropriate to the level of demand at that period.
Lastly, it is monitoring and control, which is the answer to a question “are activities
going to plan?”. Then, if there is a deviation, re-planning is undertaken to get the plan
back on track. One of the elements of control is periodic intervention in activities of
the operation, and how this intervention takes place is considered an important
decision. There are two different systems in used, push and pull control. In a push
control system, activities are planned by the central system and completed according
to the instructions of the center; for instance, inventory and queues often characterize
push systems. On the other hand, in a pull control system, the customer acts as the
sole “trigger” for the movement. That means the speed and specification of what is
done is set by “customer” workstation, which will pull work from the previous
(supplier) workstation. To sum up, there will not be any production or movement of
materials, if the request is not passed back from the customer to the supplier.

Question 4
What is supply chain management? What are the activities of supply chain
management?
Supply chain management involves the entire process of obtaining the raw goods
from a supplier, converting those goods into products, shipping products, and placing
xii

them in front of customers. In large organizations, there can be hundreds of strands of

associated activities that go through the operation; these strands are more commonly
referred to as supply chains. By managing the supply chain, organizations can cut
excess costs and deliver products to the consumer faster; according to
Investopedia.com, this is done by strictly controlling internal inventory, internal
production, distribution, and sales of company vendors. Also, good supply chain
management keeps these organizations out of the headlines and away from expensive
recalls as well as lawsuits. There are four main activities of supply chain management
– integration, operations, procurement and distribution (bizfluent.com); each relies on
the others to provide a seamless path from plan to completion at the most affordable
cost possible.
As with any project, integrated teams work could guarantee that the product gets to
the distribution phase. Due to cooperating, leaders can also monitor the whole
operation and effectively recognize areas along the supply chain that can be improved.
The following element is operations. Daily operations are the foundation of the work
manufacturers do since they can monitor the work being performed and guarantee that
everything remains on track. Next, that is procurement, which can have a very
significant impact on any operation’s expenses, and accordingly profits. The
purchasing area additionally ensures an organization has all that it needs to
manufacture products, including materials, supplies, devices, and equipment. To end
the supply chain, the
distribution activity would be
done; it implies products
should arrive on store shelves
where clients can get them or
before the client’s entryway
(e-procurement). Therefore, it
must be a well-planned
shipping process to perfectly end the supply chain.
xiii

For example, Amazon Inc, which is the world’s largest online retailer, provides
products and services like video streaming, audiobook purchases, kindle e-readers,
fire TV and echo devices.
Due to extremely innovative and technologically advanced methods such as
automated warehousing and drone delivery (picture 4.1), this organization is one of
the top supply chain leaders. In addition, being an online marketplace, Amazon’s
supply chain has direct control over the key performance areas like order processing,
packaging, shipping, replacements, reverse logistics and customer support.
Picture 4.1. the Amazon’s supply chain

Question 5
What is ERP? How should ERP systems be implemented?
ERP is an enterprise-wide information system that integrates all the information from
many functions such as planning, purchasing inventory, sales, marketing, finance,
human resources, and more. Nowadays, many ERP software applications are
important to companies since they help a corporation become more self-aware by
linking all needed information together. Also, ERP software has progressed over time
from traditional software models based on physical client servers to cloud-based
software with remote, web-based access. Due to that, companies can better plan and
allocate resources with a greater line of sight; conversely, without ERP, these
companies tend to function in silos, with each department running its own
unconnected system.
As ERP systems are designed to address problems of information fragmentation
implementation will be complex and cross organizational boundaries. So there are a
number of critical success factors (CSFs) that companies must get right in order for
the ERP system to work effectively; such as strategic issues that specify the need for a
project mission, top management support, and a project schedule outlining, as well as
tactical issues that focus on communication with all affected parties, recruitment of
necessary personnel for the project team (portal.org).
xiv

In strategic factors, the first one is top management support; that means top
management needs to identify the project as a top priority publicly, in order to set up
the suitable and competent project team, then share the role of new systems as well as
structures through the whole organization. Also, top management must act as a coach,
keeping his/her employees motivated and in harmony (Mousseau, 1998). Secondly, it
is minimum customization; since the more customization needed, the longer it will
take to roll the software out and the more it will cost to keep it up to date (Myerson,
2002). The final critical success factor in terms of strategy will be implementation
time, and its length is affected to a great extent by the number of modules being
implemented. Managers may have good reasons if moving fast, to keep pace with a
competitor that has already implemented the ERP system. However, the danger is
while the ERP system may help them meet their immediate challenge, the rush act of
that may generate even larger and long-term problems.
In terms of tactical, business process reengineering (BPR) is a vital factor; according
to Bingi et al, BPR is strongly related with how suit is the ERP software chosen with
current business process. Sine software cannot be modified as far as possible;
companies should be willing to change their business process to with it. The following
factor is consultant and vendor support. In a highly centralized structure organization,
the top management is not familiar with the real operational process; therefore,
consultants and IT vendors role are to remove knowledge barrier between various
level of management within a company. In addition, consultants can recommend
which hardware and software that is most suitable, and assist companies in
implementation management (Arens & Loebbecke, 1997). Last but not least, it is the
problems anticipation; software problems such as bugs and troubleshooting might
appear during the testing. Especially, a modified system would increase the possibility
of bugs and troubleshooting.

Chapter Three: CONCLUSION

xv

To sum up, in my opinion, without good operations management, there is a greater

likelihood that various departments will be in conflict with one another; also, applying
operations management strategies would have numerous advantages such as the
ability to obtain insight into critical areas, which require improvement. As a result, it
is important to have enough and favorable operations management in any
manufacturing organization such as people, equipment, information, and technology
in order to guarantee that production works smoothly even when unforeseen events
emerge.
REFERENCES
Textbook:
6th edition Operations Management by Nigel Slack, Stuart Chambers, and Robert
Johnston
Reports & Articles:
https://www.skedulo.com/blog/operations-management-in-healthcare/
https://smallbusiness.chron.com/responsibilities-nonprofit-operations-managers-
12003.html
https://www.unitedway.org/contact-us/faqs
https://www.researchgate.net/publication/
220391436_The_Effect_of_Operation_Performance_and_Focus_on_Profitability_A_
Longitudinal_Study_of_the_US_Airline_Industry
https://www.investopedia.com/terms/s/scm.asp
https://www.scdigest.com/assets/newsviews/15-11-12-1.php?cid=9923
https://www.diva-portal.org/smash/get/diva2:3922/FULLTEXT01.pdf