10 Critical Decisions in Operations Management

Introduction to Operations Management and Controlling

Operations management involves controlling various aspects of a process.
Controlling starts with measurement and the ability to measure functions and processes.
By comparing planned outcomes with actual outcomes, interventions can be made to improve results.
Efficiency of routines is analyzed to identify areas for improvement.
Targets are assessed to determine if they were achieved and if they can be increased.
The control mechanism is evaluated to determine when intervention is needed.
Ten critical decisions in operations management include product and service design, quality management, and capacity design.

Location of the business should be in the right place to meet customer needs and cater to the customer base.
Layout design within the business should be efficient and logical to facilitate productivity and minimize unnecessary movement.
Clear job design and understanding of tasks are important for effective human resource management.
Adequate motivation, training, and competence of employees are crucial for productivity and minimizing absenteeism.
Synchronization in the supply chain is necessary to ensure smooth delivery of raw materials and efficient production.
Inventory management should be optimized to minimize idle stock and cash tied up.
Policies for pricing products and costings should be in place to ensure efficient inventory management.
Work scheduling should be organized and not haphazard to ensure timely completion of orders and efficient production.

Gantt chart can be used to track job schedules and machine requirements.
Maintenance of machines and working environment is crucial to avoid breakdowns.
Good working relationships and goodwill are important for smooth operations.
Procurement involves reviewing guidelines, negotiating discounts, and ensuring efficient purchasing practices.
Management control and coordination function involves monitoring and controlling to meet organizational goals.
Product and service management focuses on individual products/services within the organization.
Quality management involves continuous monitoring and improvement of processes to ensure high-quality goods.

Benchmarking is important to understand what constitutes good quality and compare it to the current quality of the business.
Total quality management and continuous monitoring are necessary to ensure consistent good quality throughout the production or service delivery process.
Inventory management policies, such as just-in-time, can be efficient but risky depending on supplier reliability and potential disruptions in the supply chain.
Holding some stock as a backup plan may be wise for businesses to ensure continuity in case of delivery delays or issues.
Logistics and transport management are essential for efficient and cost-effective movement of goods from suppliers to customers.
Facilities management involves effectively managing assets like buildings, computer systems, signage, machinery, and lighting.
Distribution channels should be chosen based on the nature of the product or service and may overlap with logistics considerations.

The decision to outsource transportation and logistics or handle it in-house depends on the nature of the product and business.
Outsourcing to independent businesses specialized in transportation and logistics may be a suitable option for some businesses.