Operations Management as a

Set of Decisions
 Decisions are:

• Strategic Decisions – less

structured; have long term
consequences focus on the entire
organization.
• Tactical Decisions – more
structured; focus on division and
departmental lines.
• Operational Decisions –
repetitive and short-term;
routine focus sections, units
teams and tasks.
 Terminologies:
• Strategic Decisions
- it will affect company’s future
direction.
- operations managers help determine
the company’s global strategies and
competitive priorities and whether its
flow strategy should organize
resources around products/processes
(Operations Strategy)
• 2. Process
-fundamental to all activity that
produce goods/services
-includes:
a. Process Management – making
process decisions about the types of
work to be done in-house, the amount
of automation to use, and methods of
improving existing processes.
b. Management of Technology –
technologies to pursue and ways to
provide leadership in technological
change.
c. Workforce Management – ways to
structure the organization and foster
team work, the degree of
specialization or enhancement of the
jobs created by the processes, and
methods of making time estimates for
work requirements.
3. Quality
- in a general sense, it is defined as meeting or
exceeding the expectations of the customer.
-operations manager helps establish quality
objectives and seek ways to improve the quality of
the firm’s products and services (TQM)
• Customer Satisfaction
• Employee Involvement
• Continuous Improvement
- use of inspection and statistical methods to
monitor the quality produced by the various
processes (Statistical Process Control)
4. Capacity, Location, and Layout
- often requires long-term
commitments
-operations managers help
determine:
• System’s Capacity
• Location of new facilities, including
global operations
• Organization of department and a
facility’s physical layout
5. Operating Decisions
-it is called operations infrastructure
which deal with operating the facility
after it has been built.
 Ten Decision Areas
1. Service and Product Design
2. Quality Management
3. Process and Capacity Design
4. Location
5. Layout Design
6. Human Resource and Job Design
7. Supply Chain Management
8. Inventory, Material, Equipment, Planning
and JIT (integrated set of activities designed to
achieve high volume production using minimal
inventories or parts that arrive at work station
just on time)
9. Intermediate, Short-term, and Project
Scheduling
10. Maintenance
Issues
 What product or service should we offer?
 How should we design these products and
services?
 Who is responsible for quality?
 How do we define the quality we want in
our product or service?
 What process will these products require
and in what order?
 What equipment and technology is
necessary for these processes?
 Where should we put the facility?
 On what criteria should we base location
decisions?
 How large must the facility be to meet our
plan?
 How should we arrange the facility?
 How do we provide a reasonable work
environment?
 How much can we expect our employees to
produce?
 Who are our supplier and who can integrate
into our e-commerce program?
 Should we make or buy this component?
 How much inventory of each item should
we have?
 When do we reorder?
 Is subcontracting production a good idea?
 Are we better of keeping people on payroll
during slowdowns?
 Who is responsible for maintenance?
 Production System is the heart of
Operations Management. A primary
function of an operations manager is
to guide the system by decision-
making.
Two Types of Decisions:
1. System Design
- involves decisions that relate to
system capacity, the geographic
location of facilities, arrangement
of departments, and placement of
equipment within physical
structures, product and service
planning, and acquisition of
equipment.
- this decision essentially determines
many of the parameters of system
operation (e.g. costs, space,
capacities, and quality)
2. System Operation
- decisions on management of
personnel, inventory planning and
control, scheduling, project
management and quality assurance.