Operations management

Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs (in the forms of materials, labor, and energy) into outputs (in the form of goods and/or services). The relationship of operations management to senior management in commercial contexts can be compared to the relationship of line officers to the highest-level senior officers in military science. The highest-level officers shape the strategy and revise it over time, while the line officers make tactical decisions in support of carrying out the strategy. In business as in military affairs, the boundaries between levels are not always distinct; tactical information dynamically informs strategy, and individual people often move between roles over time.

According to the U.S. Department of Education, operations management is the field concerned with managing and directing the physical and/or technical functions of a firm or organization, particularly those relating to development, production, and manufacturing. Operations management programs typically include instruction in principles of general management, manufacturing and production systems, plant management, equipment maintenance management, production control, industrial labor relations and skilled trades supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning. Management, including operations management, is like engineering in that it blends art with applied science. People skills, creativity, rational analysis, and knowledge of technology are all required for success.

Origins

The origins of operations management can be traced back through cultural changes of the 18th, 19th, and 20th centuries, including the Industrial Revolution, the development of interchangeable manufacture, the Waltham-Lowell system, the American system of manufacturing, Fayolism, scientific management, the development of assembly line practice and mass production, industrial engineering, systems engineering, manufacturing engineering, operations research, the Toyota Production System, lean manufacturing, and Six Sigma. Combined, these ideas allow for the standardization of best practices balanced with room for further innovation through continuous improvement of production processes. Key features of these production systems are the departure from craft production to a more thorough division of labor and the transfer of knowledge from within the minds of skilled, experienced workers into the systems of equipment, documentation, and semiskilled workers, often with an average of less tenure and less experience. The disciplines of organizational studies, industrial and organizational psychology, program management, project management, and management information systems all ideally inform optimal operations management, although most smart people who work in the corporate world can empirically observe that the reality often falls far short of the ideal in ways that the market nevertheless rewards, based mostly on the fact that in markets, "good-enough-to-scrape-by" methods tend to defeat "proper" ones on cost. There is a strong tradition of recruiting operations managers simply by promoting the most effective workers, which does work, although its main systemic flaw is the Peter Principle. One of the reasons why competition doesn't kill businesses that operate this way is that few operate in any more ideal way. Typically the Peter Principle is so pervasive throughout an industry that similarly afflicted businesses face a field of competitors who are more or less equally hobbled by it (the "same circus, different clowns" problem).

There are scores of people who can be viewed as thought leaders whose life's work laid the foundations for operations management (only some of which have name recognition among the general population). A very cursory list would include (in approximate chronological order) Adam Smith, Jean-Baptiste Vaquette de Gribeauval, Louis de Tousard, Honoré Blanc, Eli Whitney, John H. Hall, Simeon North, Henri Fayol, Frederick Winslow Taylor, Henry Gantt, Henry Ford, Sakichi Toyoda, Alfred P. Sloan and Bill Knudsen of GM, Frank and Lillian Gilbreth, Tex Thornton and his Whiz Kids team, and W. Edwards Deming and the developers of the Toyota Production System (Taiichi Ohno, Shigeo Shingo, Eiji Toyoda, Kiichiro Toyoda, and others).

Whereas some influences place primary importance on the equipment and too often viewed people as recalcitrant impediments to systems (e.g., Taylor and Ford), over time the need to view production operations as sociotechnical systems, duly considering both humans and machines, was increasingly appreciated and addressed.

Historically, the body of knowledge stemming from industrial engineering formed the basis of the first MBA programs, and is central to operations management as used across diverse business sectors, industry, consulting and non-profit organizations.

Organizations

The following organizations support and promote operations management:

• Association for Operations Management (APICS) which supports the Production and Inventory Management Journal
• European Operations Management Association (EurOMA) which supports the International Journal of Operations & Production Management
• Production and Operations Management Society (POMS) which supports the journal: Production and Operations Management
• Institute for Operations Research and the Management Sciences (INFORMS)
• The Manufacturing and Service Operations Management Society (MSOM) which supports the journal: Manufacturing & Service Operations Management
• Institute of Operations Management (UK)
• Association of Technology, Management, and Applied Engineering (ATMAE)

Publications

The following academic journals are concerned with Operations Management issues:

• Management Science
• Journal of Operations Management
• International Journal of Operations & Production Management
• Manufacturing & Service Operations Management
• Production and Operations Management
• Production and Inventory Management Journal
• Journal of Modelling in Operations Management

See also

• APICS The Association for Operations Management
• Business process mapping
• Industrial engineering
• Inventory
• Inventory management software
• Lean manufacturing
• National Institute of Industrial Engineering
• Operations research
• Six Sigma
• Project management

Links

• Operations management journal ranking