Operations Management Questions and Answers

It is essential for studying operations management because operation is one of the most integral functions in businesses around the world, and we have to face it from day to day whether we work in production or service industries. If we only choose a limited functional perspective, we will surely restrict our decisions. In other words, we cannot see an overall picture and do not meet requirements of employers. Additionally, we study operations management to maintain efficient production or service processes with a workforce in order to readily adapt to new equipment and schedules, on the other hand, to ensure smooth and efficient operation. Studying operations management provides necessary ideas, techniques and principles which can be used in both manufacturing and service industries. The principles of process thinking can be applied across the business. Overall, operations Management is an interesting and challenging field of study.

2. What is the difference between the terms “production management” and “operations management”?

The difference between the terms “production management” and “operations management” is that production management is related mainly to manufacturing. Meanwhile, operation management includes manufacturing as well as service industries.

3. How does the function of an operations manager differ from the function of a marketing manager or a finance manager? How are these functions similar?

The function of an operations manager is to create the supply of goods, whereas the marketing manager’s function is to create the demand for goods. Meanwhile the function of a finance manager is to secure and allocate the capital to produce the goods.

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These functions are similar because decisions made by all three managers affect four types of operations decisions including process, quality, capacity and inventory. Therefore, a high level of integration is needed between decisions made by the marketing, finance, and operations managers.

4. How is the operations management field related to the fields of human resources, information systems, or accounting?

The human resources function directly influences the skills level of operations workforce, their capacity and availability to perform work, and their ability to work as a team towards common goals. Operations management is a major internal customer of information systems, and as a result, these systems generally support specific operations decisions such as capacity determination, forecasting, quality management, inventory control, and scheduling. Be similar to finance, accounting interacts with all four decision categories in operations, particularly when capital or measurement of operations is required.

5. Describe the nature of operations management in the following organizations. In doing this, first identify the purpose and products of the organization; then use the four decision types to identify important operations decisions and responsibilities.

a. A college library

b. A hotel

c. A small manufacturing firm

a. A college library

Purpose: Make information available to students and faculty.

Products: Services and products in the forms of books, periodicals, reference materials, the internet, etc.

Process: First, designing the way the facility is arranged with an emphasis on fiction, non-fiction, reference, periodical, and administrative sections. Second, we decide the kinds of office equipment will support the students and staff. Third, we determine how materials will be recorded, checked in/out, and returned to their proper book-shelf. Fourth, we determine the type of information technology equipment that used to support the circulation process and student internet access. Fifth, we consider who will be responsible for library operation and who will monitor and evaluate their performance.

Quality: Be sure that materials are up to date and relevant. Make sure that the staff is available to assist library. Manage feedback system to monitor student and faculty satisfaction.

Capacity: The library services and materials’s demand affect the size of the shelves, what it carries, the number of librarians, and when those employees are scheduled

Inventory: How many books, magazines, encyclopedias, computers needed to meet the demands of students and faculty

b. A hotel

Purpose: Provide a comfortable place for guests

Products: Services and goods in the forms of room service, beds, premium linens, pools, night-clubs, foods, etc.

Process: First, information architecture will be required to support the guest reservation, payment, check in/out, and entertainment processes. Second, equipment needed to support the room, housekeeping, and food service divisions. Third, job descriptions and performance standards required for staff in each of those divisions. Fourth, management needed for monitoring employee performance and resolving guests’ feedbacks.

Quality: Be sure that the rooms are clean, and affordable. Make sure that staff maintains friendly attitudes with guests.

Capacity: Local demands determine the number of available rooms, the convenience provided, and how many employees of each department will serve.

Inventory: Local demand affects inventory variation to support the hotel’s administrative, household management, and food service divisions.

c. A small manufacturing firm

Purpose: Provide merchandise with high quality to the consumer at the lowest possible cost

Products: Physical goods come along with the essential services to support those goods

Process: What type of industrial facilities will be equipped? How large a facility will be needed to house the production line and administrative support offices? How the goods will be designed, manufactured, packaged, marketed, and supported?

Quality: Use a quality control process to detect and reduce defects. Make sure that staff maintains friendly attitudes with customers during all levels of the sales and support processes.

Capacity: Physical facilities & labor.

Inventory: What, when & how much raw materials kept on hand to facilitate the manufacturing process?

6. For the organizations listed in questions 5, describe the inputs, transformation process, and outputs of the production system.

a. A college library

Input: The library’s staff decides and collects books, periodicals, reference materials which match the college’s requirements

Transformation: First, accountant pays out for the cost of buying books, shelves, and other facilities. Second, librarians arrange and lay out books so as to make them available to students and faculties.

Output: Students and faculties refer and borrow books, periodicals, reference materials.

b. A hotel

Input: Rooms and amenities, employees, capital, and other resources.

Transformation: Use those above inputs to offer hotel services.

Output: Customers hire and use services

c. A small manufacturing firm

Input: Energy, materials, labor, capital, information.

Transformation: tracking all component parts, work in process, packaging materials.

Output: finished goods, and general supplies.

7. Describe the decision-making and the process view of operations management. Why are both these views useful in studying the field of operations management?

The decision-making is a process of deciding or settling something important, especially in a group of people or in an organization. On the other hand, it is the way we choose between alternative courses of action using cognitive processes – memory, thinking, evaluation.

The process view of operations management provides a basis of defining service and transformation process as well as a foundation for analysis and design of operations.

Both these views are useful in studying the field of operations management because the decision-making provides a foundation to divide operations into part such as process, quality, capacity and inventory. Meanwhile, the process view provides essential insights for the productive processes in functional areas.

8. Write a short paper on some of the challenges facing operations management in the future. Use newspapers and business magazines from the library or the Internet as your primary sources.

Operations management is not a sustainable thing. It always changes and copes with new challenges in the future. First, globalization is one of the integral challenges facing operations management today and into the future. Operations managers will have to face global competition today and in the future. One of the examples is the lawsuit between Apple and Samsung now. Apple has started proceedings against Samsung for copying the designs of iPhone and iPad (Daily Mail, 2011). Although Samsung – a Korean company is a supplier and partner of Apple – an American group, the lawsuit still happens because they are competitors on mobile devices field. Second, environmental responsibility will affect operations management in the future. The changes in environmental rules may change processes and capacity. Third, operations management will face awareness of technology and its trends as an indispensable challenge. Technology has changed everything in operations and it will continue. For example, automation system could replace human resource more than ever. Overall, those things are only three parts of challenges facing operations management in the future. However, they are typical challenges today and into the future.

9. Review the want ads in The Wall Street Journal or use the Internet to look for management positions that are available for operations management graduates.

On Monster.com, MANUFACTURING BWAY Corporation has sought an operation manager for coordinating manufacturing process. This position includes production, scheduling, safety, maintenance/​repair, quality management. Candidates have at least five years experiences as a Production Operations Manager; college degree and effective communication ability. Also, it requires candidates to be able to ensure quality and delivery performance for the plant (Monster, 2011).

10. How do changes in the environment, such as demand changes, new pollution control laws, the changing value of the dollar, and price changes, affect operations? Name specific impacts on operations for each change.

Changes in demand, law, currency value, etc. affect significantly to operations. Operations have to adapt to such changes quickly. The demand changes will increase or decrease the number of products, thereby affect process, capacity and inventory. On the other hand, every addition and change in the pollution control laws, operations must consider that production process use safe and certificated resources. If a manufacturing process does not match the law, it will be redesigned and reconsidered. The changing value of dollar will cause a lot of effects. It will affect the environment such as the customers demand, transportation cost, etc. Price changes will increase or cut down the input cost, thereafter affect production cost and finished goods’ price.

11. Find examples of well-run and poorly run operations in recent business periodicals such as BusinessWeek, Fortune, and the Wall Street Journal. What can you learn from these examples?

On the Wall Street Journal, there is an article that describes Fujitsu, a well-run operation in the difficult time after disasters (Osawa, 2011). Fujitsu has prepared for all possible contingencies in order to reconsider the production process after catastrophes. I can learn from this example something valuable, particularly, Fujitsu has clear plan and they made decision quickly after disasters. Therefore, the production system was not interrupted for a long time. In one BusinessWeek’s article, MGM Grand had an issue on engaging employees with operations. Sometimes employees did not know what meetings were at the hotel (BusinessWeek, 2009). From this example, it is clear that stuck of staff would affect operations such as customer loyalty, return visits, and spending in the hotel.

12. Identify some of the current trends in operations that you think are of critical importance.

Some current trends in operations that are critical importance:

• Global Competition
• Operations Strategy
• Supply Chain Management
• Lean manufacturing

13. Describe how operations process thinking can be applied to the following types of work:

a. Acquisition of another company.

b. Closing the books at the end of the year.

c. Marketing research for a new product.

d. Design of an information system.

e. Hiring a new employee.

Operations process thinking can be applied well to various types of work by following process, quality, capacity and inventory.

a. Acquisition of another company

Process: Consider and seek to take over another company or at least gain a controlling interest in that company.

Quality: Minimize the expenses of cash in making the acquisition.

Capacity: Ensure that we can borrow a significant amount of money to pay for the acquisition.

b. Closing the books at the end of the year.

Process: Prepare financial statements.

Quality: The accounting revisited to ensure all statements are proper.

c. Marketing research for a new product.

Process: Corporate staff makes some of the process decisions. They have developed a standard that is simply sized to fit customers’ demand.

Quality: Products must follow certain standards for quality that have been set by the corporate staff.

Capacity: Decisions about capacity determine the maximum level of output of products

Inventory: Select appropriate suppliers and decide how much components to order and when to place orders.

d. Design of an information system.

Process: Analyze and design system requirements from different perspectives.

Quality: Ensure that design meets the requirements.

Capacity: The information system has ability to satisfy every work today and into the future.