MISS OPI

OPERATIONAL MANAGEMENT
K. Lalhruaitluangi

Q.DEFINE OPERATIONAL MANAGEMENT.

Operational management (OM) refers to the process of designing, planning,
executing, and controlling the production of goods and services, along with
managing the supply chain, inventory, and quality control. Operations managers play
a critical role by ensuring that an organization's resources are used optimally to
achieve set objectives. By leveraging the latest technologies and industry best
practices, these professionals can drive innovation, improve productivity, and
ultimately ensure that the organization is profitable and thriving in the long
run.

Q. WHAT ARE THE NATURE OF OM?

•PROCESS ORIENTATION: Operational management is a process-oriented, emphasizing the

design, analysis and improvement of processes to optimize operational efficiency
and effectiveness.
•INTEGRATION OF FUNCTIONS: Operational management integrates various functional
areas within an organization, such as production, procurement, inventory
management, quality assurance, logistics, and customer service, to ensure smooth
and coordinated operations.
•RESOURCE OPTIMIZATION: Operational management focuses on optimizing resources,
including labour, materials, equipment, and technology, to maximize productivity,
minimize costs, and achieve operational efficiency.
•TIME SENSITIVITY: Operational management recognizes the importance of time in
delivering products and services, emphasizing timely production, delivery, and
responsiveness to customers demands.

Q.WHAT ARE THE SCOPES OF OM?

The scopes of operational management are:
•1) Facility layout planning: This step involves deciding how best to utilize the
space in a factory or office to optimize workflow.
•2) Workforce planning and management: This includes ensuring that there are enough
employees with the right skills to do the work required and managing employee
performance.
•3) Inventory management: This encompasses everything from raw materials to
finished products and ensuring that inventory levels are maintained at an optimum
level.
•4) Scheduling: This is creating a production schedule that meets customer demand
while maximizing efficiency.
•5) Quality control: Quality control is essential to ensuring that products meet
customer expectations and standards.
•6) Transportation and logistics: Operations managers must plan to move goods from
suppliers to customers efficiently.
•7) Maintenance: Regular maintenance is necessary to keep equipment and facilities
running smoothly.
•8) Project management: Many operations require project management to ensure that
they are completed within time and budget.

Q.WHAT IS CAPICITY PLANNING IN OM?

Capacity planning in operations management is the process of balancing demand for a
good or service with the ability of a manufacturer or organization to produce
enough to meet demand.
Q.WHAT ARE THE TYPES OF CAPACITY PLANNING IN OM?
Types of Capacity Planning in Operations Management are:
1.Design Capacity Planning: This type focuses on determining the maximum output or
capacity a system or process can achieve under ideal conditions. It helps set
performance benchmarks and identify potential bottlenecks.
2.Effective Capacity Planning: Effective capacity planning considers realistic
constraints, such as equipment breakdowns, planned maintenance, and workforce
availability. It determines the achievable output levels under practical
conditions.
3.Actual Capacity Planning: Actual capacity planning reflects the actual output
achieved in real-time. It considers unforeseen disruptions, resource constraints,
and other factors that affect the actual capacity of a system or process.

Q.WHAT IS MATERIALS PLANNING REQUIREMENT(MRP) ?

Material requirements planning (MRP) is a production planning and inventory control
system used to manage manufacturing processes. These systems are in place so that a
manufacturing facility will always have enough stock for the manufacturing process.
The management of time and resources is pivotal to this process. Most MRP systems
are software-based, however, it is possible to conduct MRP by hand as well.
An MRP system is intended to simultaneously meet three objectives:
(1) Ensure materials are available for production and products are available for
delivery to customers.
(2) Maintain the lowest possible level of inventory.
(3) Plan manufacturing activities, delivery schedules and purchasing activities.

Q.WHAT ARE THE TYPES OF INVENTORY TECHNIQUES?

Types of inventory techniques are:
•Just-in-time inventory :Just-in-time (JIT) inventory involves holding as little
stock as possible, negating the costs and risks involved with keeping a large
amount of stock on hand. The premise is that goods and materials are ordered and
used only when they are needed.
•Just-in-case stock control :Just-in-case (JIC) stock control is an inventory
management technique deployed to protect against unexpected demand surges and
supply chain disruptions. It enables businesses to reduce the risk of stockouts –
and the lost sales that come with them – as well as negotiate fairer prices with
suppliers.
•ABC inventory management : ABC inventory analysis aims to identify the inventory
that is earning you profit by classifying goods into different tiers. It’s loosely
based on the Pareto principle – the concept that the majority of successes come
from a minority of efforts. This inventory management technique enables you to make
informed decisions around budget allocation, marketing, and purchasing at the
product level. This inventory management technique enables you to make informed
decisions around budget allocation, marketing, and purchasing at the product level.

•First in, First out (FIFO) :First in, First out (FIFO) is an inventory costing
technique used to measure the value of inventory stock. In FIFO, the items
purchased or produced first in a specific product line are the first to be sold to
customers. This technique facilitates easy inventory accounting and ensures you are
assigning the correct value when calculating the cost of goods sold (COGS).
•Last in, First out (LIFO) :Last in, First out is an inventory costing technique
that, unlike FIFO, involves selling the most recently purchased or produced items
first and retaining older items until newer ones have been sold. There are several
downsides to this technique: namely, it gives an inaccurate picture of the value of
inventory in a business and is not accepted under the International Financial
Reporting Standards or the tax laws of many countries.
•Vendor-managed inventory : Vendor-managed inventory, or the consignment inventory
management technique, allows a consignor, usually a wholesaler, to give their goods
to a consignee, usually a retailer, without the consignee paying for the goods
upfront.
•Cross-docking :Cross-docking is an inventory management technique that virtually
eliminates the need to hold inventory. Products are delivered to a warehouse where
they are sorted and prepared for shipment immediately. They’re usually then
reloaded into other trucks at the same warehouse and sent out for delivery
immediately.

Q.WHAT IS TOTAL QUALITY MANAGEMENT?

Total quality management (TQM) is the continual process of detecting and reducing
or eliminating errors in manufacturing. It streamlines supply chain management,
improves the customer experience, and ensures that employees are up to speed with
training.
A core definition of total quality management (TQM) describes a management approach
to long-term success through customer satisfaction. In a TQM effort, all members of
an organization participate in improving processes, products, services, and the
culture in which they work.

Q.DESCRIBE TOOLS OF TOTAL QUALITY MANAGEMENT.

The tools of total quality management are:
•Check List - Check lists are useful in collecting data and information easily.
Check list also helps employees to identify problems which prevent an organization
to deliver quality products which would meet and exceed customer expectations.
Check lists are nothing but a long list of identified problems which need to be
addressed. Once you find a solution to a particular problem, tick it immediately.
Employees refer to check list to understand whether the changes incorporated in the
system have brought permanent improvement in the organization or not?
•Pareto Chart: The credit for Pareto Chart goes to Italian Economist - Wilfredo
Pareto. Pareto Chart helps employees to identify the problems, prioritize them and
also determine their frequency in the system. Pareto Chart often represented by
both bars and a line graph identifies the most common causes of problems and the
most frequently occurring defects. Pareto Chart records the reasons which lead to
maximum customer complaints and eventually enables employees to formulate relevant
strategies to rectify the most common defects.

•The Cause and Effect Diagram - Also referred to as “Fishbone Chart” (because of
its shape which resembles the side view of a fish skeleton)and Ishikawa diagrams
after its creator Kaoru Ishikawa, Cause and Effect Diagram records causes of a
particular and specific problem. The cause and effect diagram plays a crucial role
in identifying the root cause of a particular problem and also potential factors
which give rise to a common problem at the workplace.
•Histogram - Histogram, introduced by Karl Pearson is nothing but a graphical
representation showing intensity of a particular problem. Histogram helps identify
the cause of problems in the system by the shape as well as width of the
distribution.

•Scatter Diagram - Scatter Diagram is a quality management tool which helps to

analyze relationship between two variables. In a scatter chart, data is represented
as points, where each point denotes a value on the horizontal axis and vertical
axis. Scatter Diagram shows many points which show a relation between two
variables.
•Graphs - Graphs are the simplest and most commonly used quality management tools.
Graphs help to identify whether processes and systems are as per the expected level
or not and if not also record the level of deviation from the standard
specifications.

Q.WHAT IS JUST IN TIME(JIT) PRODUCTION?

The just-in-time (JIT) inventory system is a management strategy that aligns raw-
material orders from suppliers directly with production schedules. Companies employ
this inventory strategy to increase efficiency and decrease waste by receiving
goods only as they need them for the production process, which reduces inventory
costs. This method requires producers to forecast demand accurately.

Q.WHAT IS ISO 9000?

•ISO 9000 is a series of standards, developed and published by the International
Organization for Standardization . It defines, establishes and maintains an
effective quality assurance system for manufacturing and service industries.
•The ISO 9000 standard is the most widely known and has perhaps had the most impact
of the 13,000 standards the ISO has published. It serves many different industries
and organizations as a guide to quality products, service and management.
•The one standard in the ISO 9000 series of standards that an organization can earn
a certification in is the ISO 9001 individual standard. By earning that
certification, an organization shows it is compliant with its industry's ISO 9000
standards. To be certified, an outside examiner must check the organization's
practices.

Q.WHAT DO YOU MEAN BY JOB SHOP?

A job shop is a type of manufacturing process in which small batches of a variety
of custom products are made. In the job shop process flow, most of the products
produced require a unique set-up and sequencing of process steps.
A job shop is a manufacturing system that handles custom/bespoke or
semi-custom/bespoke manufacturing processes, such as small to medium-size customer
orders or batch jobs. Such a process is called "job production." Job shops
typically move on to different jobs when each job is completed.

Q.WHAT IS QUALITY ASSURANCE ?

The quality assurance process helps a business ensure its products meet the quality
standards set by the company or its industry. Another way to understand quality
assurance (QA) is as a company’s process for improving the quality of its products.
Many businesses view their QA program as a promise to internal stakeholders and
customers that the company will deliver high-quality products that provide a
positive user experience.

Q.WHAT IS AGGREGATE PLANNING?

Aggregate planning is a strategic process businesses employ to synchronize

production, workforce, and inventory levels with anticipated demand over a
specified timeframe, typically ranging from a few months to a year. Aggregate
planning serves as a vital link between strategic and operational planning, aiming
to optimize resources while minimizing costs. Key components include forecasting
demand, adjusting production capacity, managing inventory, planning workforce
needs, and creating production schedules. The primary goal of aggregate planning is
to strike a balance between production capabilities and customer demand. By
aligning these factors, organizations can effectively navigate seasonal
fluctuations or changes in the market, ensuring they meet customer requirements in
a cost-efficient manner.