Why is operations management important for both manufacturing and service organizations?

Manufacturing operations management refers to the tools and methods to optimise production. This includes managing business resources such as people, technology, equipment, and other resources that improve the efficiency and productivity of the manufacturer. 

Manufacturing operations management ensures that the physical equipment and the user interface of a business work harmoniously for the benefit of the company. A manufacturing system provides a platform where human and automated activities are blended in real-time.

Notable benefits include: 

Giving your company a competitive advantage

Managing your business operations gives you the ability to deal with important internal and external factors. Some of the key internal factors include intellectual capital, operating policies, and average attrition rates. The external to improve competitiveness. 

Increasing your profitability 

When the operations are running smoothly, managers will have more time to generate new ideas and apply them to increase company sales. When you have an experienced manager, the monitoring of your revenue and expenses becomes easier. In the long run, your overall income increases. When your business profitability is well managed, it becomes easier to understand your revenue.

Increased product quality

Operations management gives you the opportunity to increase the efficiency of the way you manufacture goods. You are also able to improve the way your raw materials are stored. The advantage of this is that you can minimise damage and, hence, minimise losses.

Manufacturing operations management includes making use of useful tools such as warehouse management software, production software, defect-trackers, and process re-engineering programs. All these tools assist in increasing the efficiency of your facility.

Ensures you comply with government regulations

By managing your business operations, each head of the department in your company takes the responsibility to ensure that all tasks performed under him are done in a lawful manner. This protects your company from potential government fines and severe regulatory decisions. 

Increased customer satisfaction

Meet customer expectations by deploying a quality management program to help maintain high standards while ensuring efficiency. When customer expectations are met, satisfaction level can increase, which can also lead to better retention and increased referrals. 

Helps in waste reduction 

Another benefit of employing manufacturing operations management is the application of manufacturing systems that aid in reducing waste production. Often these systems will have an inventory management function to help control inventory and consequently reduces the potential of production issues due to the lack of stock. Investing in these types of management system helps reduce inventory space and improve accuracy.

Increased teamwork 

Manufacturing operations management requires different departments to work together to produce quality products. This helps improve business productivity and meet the expectations of your customers.

Ensure that you employ innovative technology to help your company achieve its set goals and objectives. You also need to ensure that your system is working by carrying out regular statistical control methods.

WinMan is a reliable business system that help you create end-to-end manufacturing processes. Contact us today for more information on our solution.

Topics: Manufacturing, Business Management Software, Production Management, Business Efficiency, supply chain, Productivity, Warehouse Management Systems

Operations is a core functional area of an organization, along with marketing, human resources and accounting. Operations management plays a crucial role in enhancing the quality of products and efficiency of the production environment. According to the Corporate Finance Institute, operations management is the process of administering business practices to maximize the efficiency of operations and enhance the quality of output. Operations management involves activities such as planning, organizing and overseeing operational activities to reduce costs and improve profitability.

Manufacturing Operations

The term "manufacturing operations" refers to a framework in which man, machine and material come together to produce a tangible product. It deals with all the supply chain activities such as gathering requirements from customers, procuring raw materials, allocating resources, scheduling the production, maintaining the inventory, and delivering end products to customers.

Manufacturing operations are classified into process manufacturing and discrete manufacturing. Process manufacturing is an operational method that produces goods by following a specified sequence of steps or a predefined formula. Discrete manufacturing emphasizes producing individual finished goods that are distinct from one another. While pharmaceutical and food and beverage industries adopt the process manufacturing method, automobiles and smartphone manufacturers adopt a discrete manufacturing method.

Service-Providing Organizations

Services are intangible and non-physical products offered by one party to another in exchange for money. As reported in the Harvard Business Review, service-providing operations aim to deliver an experience that leads to customer satisfaction. Service operations engage a wide range of teams to deliver services, including professional service teams, customer support teams and customer experience teams. Organizations that engage in hospitality, travel, media, sports, health care and entertainment are service-providing organizations. Service-providing operations send employees to their customers' locations or meet the customers at the company's premises to facilitate the service provision.

The important components of service-providing operations are labor, service model and service environment. Labor could be a skilled workforce or semi-skilled workforce that directly engages with customers to provide services. The service model is the approach that the organization adopts to deliver intangible value to customers. SAAS (Software-As-A-Service) is a perfect example of a service operations model adopted by software firms. A restaurant drive-in option is another service operations model that lets customers remain in parked vehicles while they eat. Service environment refers to the ambiance of the premises where the service provision takes place.

Similarities of Goods Production and Service Operations

Goods production and services operations look similar to an extent. Both goods production and service operations engage human and physical resources to deliver the desired output. For example, the goods production environment of an automotive company uses human resources such as mechanical engineers, production labor and physical resources like fabrication, welding and drilling machinery to deliver finished goods. Similarly, service operations at a beauty salon engage human resources, including haircutting experts and beauticians, and physical resources, such as conditioners, straighteners, clippers, wands and combs, to offer the desired services.

Differences Between Goods Production and Service Operations

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.

Why is operations management important in manufacturing?

How is operations management used in both manufacturing and service organizations?

How does the role of operations management differ in manufacturing and service organizations?

Why is service operations management important?