1. what is operation management? define it.

Operations management (OM) is the administration of business practices to create the

highest level of efficiency possible within an organization. It is concerned with converting
materials and labor into goods and services as efficiently as possible to maximize the profit of an
organization.

 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.

2. write down the historical development of operation management

operations management is as old as time. However the modern concept of operations
management bagan in the eighteenth century as manufacturing management. An
economist, Adam Smith, realized that specialization of labor could be very beneficial to
any organizations economy.
He therefore came up with the idea of breaking up jobs into sub units where only
workers specialized in a certain field would take up the task not only to ensure efficient
delivery of the task but also to further increase their skills (Kumar, and Suresh, 2009, p.
284). Early in the twentieth century, F. Taylor enforced this law which then resulted to
the development of scientific management. Since then until in the early nineties, many
developments were made based on the traditional of the operation.

3. explain briefly the difference between manufacturing operations and

services operation

While manufacturing operations focus on producing goods and storing them at a

warehouse before delivering them to customers, service-providing operations facilitate
simultaneous production and consumption of services. For example, an automobile
company makes a car and keeps it in the warehouse until a customer comes forward
to purchase it. A beauty salon needs to provide haircutting services in the presence of
the customer.
Services cannot be stored for later use. When there is a high demand for services,
service operations should engage additional human resources and modify operational
activities accordingly to manage the supply-demand equation. Due to their nature of
producing and storing finished goods, manufacturing operations don't need to engage
additional resources and modify operational activities when there is a high demand for
products.

4. what is operation decisions making, explain it in details

Operational decisions are made to execute the short tern process with the aim of
achieving the long term and medium term goals that the strategic and tactical level
decisions have adopted.
 Operational decisions are those decisions that are adjusted more frequently in
correspondence to the current external and internal conditions, which usually have
impacts for no longer than a year or even a day. Due to the large number of activities
involved in the manufacturing and service operations, optimization models for
operational decisions vary significantly in scale, complexity, and formulation.

Typically, operational decisions in any business are of the following types

1) Pricing – Go to any retail store and you will find customers haggling on price. Now, if
the owner was himself involved in such operational decisions, the firm would go down
the drain soon. Instead, the owner or the manager gives price levels and margin levels
which are to be maintained and hence the decision is made by the employee.

2) Discounts – In channel sales or in network marketing, the daily sale as well as daily

purchase is so high in quantity, that discounts play a major role on which brand the
dealer will push in the market. And hence, managers should have all information on
current discount levels in the market and what discounts to be given to dealers which are
ultimately given by executives. In short, channel level operations have to be managed
properly.

3) Promotions – Promotions involve a lot of operating decisions, like how to promote

the product, and which areas or mediums will give the best ROI after promotions.
Similarly, getting the promotional material ready and ensuring that the promotions are
done properly in the market are all operational decisions which are to be taken from time
to time.

4) Collecting information – Now this is a task which is huge and can make a big impact
in the altogether running of an organization. If you look at it from the bottom up level,
there is a lot of operational information also collected, which has to be summarized at
the manager level and finally submitted at the director level.

Above 4 are the major operational decisions which have to be taken everyday and
hence are mostly outsourced or are managed via a chain of command in between.
Besides the above, there are other operational decisions also which are made in the day
to day running of a business.

 Maintaining Inventory
 Logistics decisions
 Sales and outreach
 Employee management
 Customer management

5. what is the productivity measurement? discuss and explain about

productivity measurement.

Recall that operations management is responsible for managing the transformation of

numerous inputs into a range of outputs, such as goods or services. But how do we
know whether this transformation process is efficient?
 A measure of how efficiently inputs are converted into outputs is called productivity.
Productivity measures how well resources are used. It is computed as a ratio of outputs
(goods and services) to inputs (labor and materials). The more productive a company is,
the better it uses its resources.

Productivity can be improved by (a) controlling inputs, (b) improving process so that the
same input yields higher output, and (c) by improvement of technology. These aspects
are discussed in more detail in the lesson on Productivity Management. Productivity can
be measured at firm level, at industry level, at national level and at international level.

Productivity is the ratio of outputs (goods and services) divided by the inputs (resources
such as labour and capital).

Units produced
Productivity = Input used
Important Note! Production is a measure of output only and not a measure of efficiency

6. discuss about operation strategy

A firm’s operations encompass all the activities that are performed in order to produce
and deliver a product or a service. An operations strategy refers to a set of operational
decisions that a firm makes to achieve a long-term competitive advantage.  These
decisions may be about the firm’s facilities, its technology/process choices, its
relationships with both upstream and downstream business partners etc.

Operational strategy involves refining and specifying a company’s business strategy and
developing strategic initiatives and operational plans, aiming at enabling our clients to
successfully implement overall strategy for their business.

The work involves, among others:

 Challenging management regarding the way in which they think about their
business, 
 Performing, where needed, detailed strategic and operational analysis to
identify any omissions/problems or areas for improvement. 
 Developing clear, achievable action plans, to deliver the strategy 
 Supporting clients in implementing the action plans and measuring the results
against predefined goals and key performance indicators.
Various techniques may be used to achieve the required level of operational analysis
such as:
 Value proposition and value chain analysis, 
 Activity Based Costing, 
 Benchmarking, 
 Business performance diagnostic, etc. 
 Performance measurement methods and techniques, etc.
7. what is competitiveness in operation strategy?

Once a business strategy has been developed, an operations strategy must be

formulated. This will provide a plan for the design and management of the operations
function in ways that support the business strategy. The operations strategy relates the
business strategy to the operations function. It focuses on specific capabilities of the
operation that give the company a competitive edge.

1. Cost
Competing based on cost means offering a product at a low price relative to the prices
of competing products. The need for this type of competition emerges from the business
strategy. The role of the operations strategy is to develop a plan for the use of resources
to support this type of competition.

2. Quality
Many companies claim that quality is their top priority, and many customers say that
they look for quality in the products they buy. Yet quality has a subjective meaning; it
depends on who is defining it. For example, to one person quality could mean that the
product lasts a long time, such as with a Volvo, a car known for its longevity. To another
person quality might mean high performance, such as a BMW.

3. Time
or speed is one of the most important competitive priorities today. Companies in all
industries are competing to deliver high-quality products in as short a time as possible.
Companies like FedEx, Lens Crafters, United Parcel Service (UPS), and Dell compete
based on time. Today’s customers don’t want to wait, and companies that can meet their
need for fast service are becoming leaders in their industries.
4. Flexibility
As a company’s environment changes rapidly, including customer needs and
expectations, the ability to readily accommodate these changes can be a winning
strategy. This is flexibility. There are two dimensions of flexibility. One is the ability to
offer a wide variety of goods or services and customize them to the unique needs of
clients. This is called product flexibility. A flexible system can quickly add new products
that may be important to customers or easily drop a product that is not doing well.
Another aspect of flexibility is the ability to rapidly increase or decrease the amount
produced in order to accommodate changes in the demand. This is called volume
flexibility.

8. write about operation strategy in manufacturing sector

Manufacturing companies help their clients by building a strategy which focuses on who,
what and where of the global manufacturing network. They help clients by build
 capabilities to integrate the network, creating visibility and transparency. As a result, they
develop better collaboration and communication with partner networks, minimizing the
risk of delays and keeping the supply chain free of defects.
They have demonstrated experience in helping their clients to achieve significant improvements:
 Increase revenues through new market entry and strategic merger and acquisition.
 Decrease cost of goods sold
 Reduce working capital
 Improve asset utilization
 Increase efficiency

These concepts can be summarized as follows:

 Deep manufacturing experience. Firms should have extensive experience helping
clients transform their manufacturing strategy and operations and have invested heavily
in our methods, software solutions and people. This combined with deep knowledge of
the industries we serve is our competitive advantage.

 Rapid time to value. Their methodologies, frameworks and tools will identify quick value
opportunities while also minimizing design risk. Firms will quickly validate how to drive
value from improvements in manufacturing by enhancing functional capabilities and
enabling technologies.

 Optimal mix of strategy, process, execution and technology. Certain companies are
unique among its competitors: their capabilities cover the full project life cycle from
strategy to execution to enable our clients’ success at every point of their transformation
journey.

9. explain the concept of operation strategy in service sector

Arias-Aranda (2002) proposed a model based on the three basic operations strategies
identified in service literature according to the firm’s focus of activities. These basic
operations strategies pursued by service industries are process, service or customer-
oriented operations strategies. He also identified nine structural and infrastructural
decisions that lead to a determined service operations strategy

These are type of operations layout, PUSH/PULL orientation of the service delivery
process, degree of process standardization, number of different services offered, use of
information technologies (cost reduction vs. service improvement), back and front office
activities relationship, human resources specialization, degree of customer participation,
and new service design and development.

Service Flexibility
Flexibility as a competitive goal still lacks a clear and accurate definition. In service firms,
flexibility is a fuzzy concept, as not all service flexibility dimensions have been clearly
determined.
However, flexibility is generally accepted as a useful tool to improve the competitive
position of the firm, especially when related to the process of decision-making in
technologies adoption and implementation

10. write about products and services design

Product design and process selection decisions are typically made together. A company can
have a highly innovative design for its product, but if it has not determined how to make the
product in a cost effective way, the product will stay a design forever.
Product design and process selection affect product quality, product cost, and customer
satisfaction. If the product is not well designed or the manufacturing process is not true to the
product design, the quality of the product may suffer. Further, the product has to be
manufactured using materials, equipment, and labor skills that are efficient and affordable;
otherwise, its cost will be too high for the market.
We call this the product’s manufacturability—the ease with which the product can be made.
Finally, if a product is to achieve customer satisfaction, it must have the combined
characteristics of good design, competitive pricing, and the ability to fill a market need. This is
true whether the product is pizzas or cars.
Most of us might think that the design of a product is not that interesting. After all, it probably
involves materials, measurements, dimensions, and blueprints. When we think of design we
usually think of car design or computer design and envision engineers working on diagrams.
However product design is much more than that. Product design brings together marketing
analysts, art directors, sales forecasters, engineers, finance experts, and other members of a
company to think and plan strategically. It is exciting and creative, and it can spell success or
disaster for a company.
Service design defines the characteristics of a service, such as its physical elements, and the
esthetic and psychological benefits it provides.
The design elements discussed are typical of industries such as manufacturing and retail in
which the product is tangible. For service industries, where the product is intangible, the design
elements are equally important, but they have an added dimension.
Service design is unique in that we are designing both the service and the entire service
concept. As with a tangible product, the service concept is based on meeting customer needs.
The service design, however, adds the esthetic and psychological benefits of the product.
These are the service elements of the operation, such as promptness and friendliness. They
also include the ambiance, image, and “feel-good” elements of the service. Consider the
differences in service design of a company like Canyon Ranch, which provides a pampering
retreat for health-conscious but overworked professionals, versus Gold’s Gym, which caters to
young athletes. As with a tangible product, the preference for a service is based on its product
design.