Operations management is the emphasis of prudent supervision of the procedures of production, and its accompanying activities of handling purchases and storage, inventory and quality control, as well as distribution and the assessment of procedures. It is the hub that thinks about what the organization needs to for it to produce and deliver the goods and services their client’s desire from them. The scope of operations management entails three levels to achieve optimal production. The levels range from creating a strategy to tactics and then the operational level. Operations managers has to strategize the best locations for manufacturing plants and also determine the size of the plant. In addition to size and location, operations managers have the tasks of creating pristine supply chains and determine the structure of service and communication systems.
The tasks of deciding the methods of project management, the selection and replacement of equipment, as well as the structure and layout of the manufacturing plant heads the tactical issues of operations management. The main operational issues that occurs include scheduling and control of the production process, managing inventory, inspection and quality control, creating and enforcing policies for equipment maintenance and handling traffic and materials. Therefore, individuals in the field of operations management are frequently involved in the internal processes of the organization in an effort to accomplish careful analysis and substantial measurements. Essential the type of products or services the organization manufactures and distributes determines the responsibilities of individuals involved in operations management.
Having a clear understanding of the three Es’ idea that is the effectiveness, efficiency and economy management help managers in the process of performance evaluation and how best to make improvements in the areas found lacking. It is of great importance that senior managers establish their priorities because this will determine the actions that are most suitable to implement that will lead to the ultimate Es’ mix. The focus of the organization as well as external influences will be the determining factor for creating the best Es’ mix, which is subject to change over time. When managers have a pristine understanding effectiveness, efficiency and economy, it makes them better manager. Every manger can be better with the 3Es, and superior managers lead to improvements in the overall performance of the business.
Effectiveness speaks to whether or not targets are being met, in regards to goals set for achievement. The setting of clear goals before work begins, followed by an assessment of whether or not the goals have been me is a measure of effectiveness. When the correct work is being completed this means work is being effectively performed and operations managers are the ones responsible for ensuring effectiveness occurs and remains consistent or is continually being improved. When a team is working really hard, meeting deadlines and completing task, but what is needed is not being delivered, then effectiveness is not being achieved. Another component of the three Es model is economy, this area pays attention to the costing as it relates to the resources used and the value of the final product or service being delivered. This aspect of the three Es is of great importance especially in the current economy where companies have to be continually tightening their budget, and producing at the most affordable cost.
Efficiency in operations management, which is a major aspect of the three Es, is dependent on how well the resources of an organization is being utilized in the production of the various goods and services it offers. Therefore, efficiency is the process of identifying and using inputs, such as human, equipment, energy, and financial resources. To produce or deliver outputs, of various goods and services, at a rate that gives the best productivity. Hence, efficiency is about the techniques used to complete work, which in turn requires measuring the process of completing tasks. And then studying the process in an effort to identify the required resources, the most efficient use of resources identified then becomes the benchmark of measuring efficiency within production and other departments. The benchmark measurement is effectively used in future works to determine whether or not more resources is required, in production and many other areas. The Best Effectiveness, Efficiency and Economy Mix is can be very difficult to find as there are so many ways to obtain value. For instance, a company may be focused on providing a specific product or service, making it dependent on optimal effectiveness for the least cost, which may be at the expense of efficiency.
In order for production managers to get the most out of resources while reducing the time necessary for the completion of project, a critical path analysis (CPA) should be used. CPA is the process of outlining and sequencing of the tasks necessary to achieve favorable outcome of the project. The aim of CPA is to assist OMs in decision making by focusing on time management and the ongoing evaluation of a project's progress. A Gantt chart is generally used to determine the most important steps, by identifying the major activities and sequencing them with estimated activity time, to arrive at the total time needed for the project as well as the critical areas.
Gantt chart – starting a business
The creation of a network diagram, also known as a logic diagram allows operation managers to visualize and better understand how the project will progress. A network diagram makes clear the critical path, the activities that has to be accomplished, to ensure success. The network typically show activities by sequences denoted most frequently by blocks that are linked together in the most logical format. The concept in simple, making it easily applicable outside of project management, and successfully integrated in various industries, especially service industries that use it to chart and comprehend work flows.
Network Plan – critical path highlighted in orange boxes
References
Brewer, Dawn. (2010) Management Efficiency Effectiveness and Economy. Making it in Business. Retrieved from https://suite.io/dawn-brewer/2zfk2qk
Critical path analysis. (n.d.). In Investopedia Encyclopedia. Retrieved from http://www.investopedia.com/terms/c/critical-path-analysis-cpa.asp
McNamara, Carter. (n.d.). Operations Management. Free Management Library. Retrieved from http://managementhelp.org/operationsmanagement/index.htm?PHPSESSID=5d461796f9 5ec637100f7f212eb8b535
Operations Management (n.d.). MIT Sloan School of Management. Retrieved from http://mitsloan.mit.edu/omg/om-definition.php
10 Steps to Starting a Business. (n.d.). The U.S. Small Business Administration. Retrieved from http://www.sba.gov/content/follow-these-steps-starting-business
