Operations Management and Decision Making

Keywords: decision making in procedure management

Operations management targets carefully handling the processes to create and spread products and services. Usually, smaller businesses don't talk about "operations management", but they carry out the activities that management classes typically associate with the expression "operations management" major, overall activities often include product creation, development, production and syndication. These activities are also associated with Product and Service Management. However product management is usually in regards to one or more tightly related product -- that is, a product line. Businesses management is in regards to all operations within the business related activities include taking care of buys, inventory control, quality control, storage, logistics and assessments. Significant amounts of concentrate is on efficiency and efficiency of procedures. Therefore, businesses management often includes substantive measurement and examination of internal operations. Ultimately, the nature of how functions management is completed in an company depends quite definitely on the type of products in the organization, for example, retail, processing, low cost, etc. An operating-system utilises resources to convert inputs into outputs by means of goods or services. Conventionally, operations management is defined as the task of designing, building, planning, and operating, controlling, preserving and increasing such systems. As the result of such systems constitutes both goods and services this establishes procedures management as a field of activity slightly broader than creation (or developing) management which exclusively provides goods or artefacts. However the distinction between goods and services is unclear and the last mentioned category is wide-ranging and heterogeneous.

Operations Management (OM) can be involved with the going of the day-to-day operations of the business or other organisation as effectively and proficiently as possible. It really is of critical importance in every organisations, whether they make products for customers or provide a service.

OM is the branch of management science concerned with the study of the factors involved in the successful management of the organisation's day-to-day functions. It seeks to build up and apply the techniques and techniques needed to design and put into action systems that will enable the efficiency and performance of these functions to be improved upon. Operational problems can range between purchasing, through processing to the ultimate distribution of the products. The last a decade has observed the re-emergence of Operations Management as a critical function in the progress and profitability of organisations. The ability to deliver products and services fast and right first time while lowering costs is becoming fundamental never to only the competitiveness of the business, but also its success.

Before operating any managerial activities efficiently what comes first is the Decision-making. Decision-making is the procedure of evaluating alternative lessons of action to a given problem and coming to the best option plan of action. It entails extensive analysis of the pros and cons of every choice solution. Scientific management facilitates decision-making. The factors of risk and doubt are considered while making decisions.

Description: The use of operations management whether new or old, big or small, to run well and achieve the goals and goal which is has set fifth of elements. There are basically five management ideas that allow any organization to handle the tactical, organized and set decisions. The five basic functions of the operation management are merely to have a manipulated plan in the preventive measure. They are simply

Plan: It is the foundation part of management. It is the base upon which the all areas of management should be built. Planning requires administrations to asses where in fact the company presently established, and where it might be in the upcoming. Following that and appropriate plan of action is set and implemented to achieve the company's goals and targets.

Organize: The second function of the management gets structured. Management must coordinate all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Organizing is creating the internal organizational framework of the business enterprise. The concentration is on section, co-ordination, and control of activity and the move of information within the organization.

Staffing: The 3rd function is stuffing. After using individual to be employed by your organization, you must create an effective "Project Management Procedure" that allows feedback and maximum output that occurs. A staffing management plan or process is finally a report that explains the various recruiting requirements that will be achieved for both personnel management and worker alike. The program is essentially a portion of the task management plan where allows project to reach your goals by properly taking care of various groups to complete tasks effectively and proficiently.

Direct: Directing is the fourth function of the management. Working under this function helps the management to regulate and supervise the action of the staff. This can help them to assist the personnel in achieving the business's goals and also completing their personal or career goals, which can be powered by inspiration, communication, team dynamics, and division leadership.

Control: Control is the previous of four function of management, includes building performance standards, which can be of course predicated on the company's aim. It also involves evaluating and reporting of genuine job performance. Once the management studies these items then it's important to compare both things. This analysis on comparability of both decides further corrective and precautionary actions.

Before go to decision making on operation management we shortly discuss what is Operations, procedures management and operations managers?

Every organisation has an operations function, whether or not it is called 'functions'. The goal or purpose of most organisations involves the production of goods and/or services. To get this done, they need to procure resources, convert them into outputs and spread them with their intended users. The term businesses embraces all the actions required to create and deliver an organisation's goods or services to its customers or clients.

Within large and sophisticated organisations operations is generally a major useful area, with people specifically specified for taking responsibility for handling all or area of the organisation's operations operations. It really is an important functional area because it plays a crucial role in identifying how well an organisation satisfies its customers. In the case of private-sector companies, the objective of the businesses function is usually portrayed in terms of profits, expansion and competitiveness; in public areas and voluntary organisations, it is often expressed in conditions of providing value for money.

Operations managementis worried about the look, management, and improvement of the systems that create the organisation's goods or services. The majority of most organisations' financial and recruiting are committed to the activities involved with making products or delivering services. Businesses management is therefore critical to organisational success.

An understanding of the rules of functions management is important for all professionals, because they offer a systematic way of taking a look at an organisation's techniques. The necessity to manage developing and service operations successfully and effectively has led to a considerable increase in interest in procedures management lately. However, the idea of procedures is not new.

Decision making is a central role of all operations management

Theabove comments try to identify functions management as an area worthy of consideration, and also to suggest that some decisions of procedures managers are worth focusing on to those with decision-making duties in other functions in the business.

Paradoxically whilst a lot of what is discussed operations management is concerned with a kind of decision-making - fixing of particular problems - relatively little attention has been directed at the wider decision-making process. We define the procedures management decision-making process at this level, as the formulation of overall strategies for operations, typically including inter-related areas of responsibility with businesses management, and the taking of decisions in those areas in the quest for these strategies, all within the broader business framework.

Textbooks have before viewed businesses management in terms of the casual or repetitive handling of specific problems in areas such as arranging, inventories, planning, control, etc. They have emphasised the analytical solutions of such problems, and other solutions relating to the manipulation of factors in the pursuit of some given objective function, e. g. period, utilisation, throughput, cost, etc.

Capacity Management Decision:The capability management is to balance the level of operations with the level of demand. This involves the concern of likely medium- to long-term demand patterns, to permit the determination of the capacity necessary to meet such demand, and the development of strategies for the introduction of resources, specifically for accommodating changes in the demand levels.

Two basic capacity management strategies are present, namely:

  • To provide for efficient modification or variant of system capacity, to match demand level changes.
  • To eliminate or decrease the dependence on such modification in system capacity.

The strategies offered businesses managers the next - for use separately or in mixture:

Strategies 1: Give efficient adjustment of system capacity (e. g. through sub-contracting, changes in make/buy balance, minimizing material details, work hour changes, labor force size changes, source transfers, etc. )

Strategies 2: Eliminate or reduce the need for alterations in system capacity through
  • maintaining excess capacity, i. e. sufficient to meet all future demand.
  • Reducing or smoothing the effect of demand level fluctuations by:
  • fixing an higher capacity limit, and beyond that expecting either loss or trade or customer queuing and reduced service;
  • using output shares to soak up demand level fluctuations.
The operation Director are associated at
  • designing the operations system or its layout
  • managing the businesses system
  • improving the procedures system.
The five main varieties of decision in each one of these relate to
  • the processes by which goods and services are produced
  • the quality of goods or services
  • the level of goods or services (the capacity of businesses)
  • the stock of materials (inventory) needed to produce goods or services
  • the management of recruiting.

Let us show how the above hyperlink are worked when a administrator making decision on his / her procedure management system.

A person in managerial position who is poor in decision making is fit to be called only an administrator rather than a director.

The decision making process normally will involve the following levels

1) Defining the problem /issues / situations / troubles which calls for a decision making

2) Collecting relevant facts, information and figures to help in and support decision making process

3) Identifying the various alternatives of choice

4) Seeking ideas and alternative view factors from "people who know"and "people who subject".

5) Pondering over the problems peacefully (where time enables) and

6) Deciding on the best choice or a couple of best lessons of action.

Some times, decision making may just entail taking "yes"or "no"decision in which case, if the challenge or issue is easy, there might not really be considered a need for any sophisticated data collection or need for wider consultations.

At times, where the issue is of serious characteristics, even making yes/no decision may require all the complex stages listed above. Example: An organization more developed in manufacture of automobile accessories discusses a proposal to diversify directly into manufacture of computer hardware accessories. Thoughts and opinions in the most notable management is split into two - some want to remain and then the proven primary business line plus some are extremely enthusiastic to diversify. The Chief executive has to decide yes or no for diversification.

Where the decision making requires multiple choices, it may get more complicated. Why don't we take the same example. The chief executive decides towards diversifying into making the computer accessories. Now, he would be met with decision making on several issues. He has to start out off with determining the issues.

For example,

  • Whether to float another company with the objective in a new name or produce the services in the prevailing set up but market it in a different brand name
  • Whether to utilize the same company name (and to utilize the familiarity and trustworthiness of the brand) but produce the things in a fresh factory
  • Whether to look for indigenous or imported technology
  • Whether to employ totally new managerial team or utilize existing ability pool in the company for key administrative positions
  • Whether to find the factory next to the existing manufacturing plant or find a totally new location

Decisions drive a business. The idea on decision making is great but can be summarized quite effectively by using Vroom and Yetton's normative model for decision making.

The model characterizes several types of decision making, each well suited for varying situations. These types are

A1: Leader takes known information and then chooses alone.

A2: Leader gets for information from fans, and then determines alone.

C1: Leader shares problem with supporters separately, listens to ideas and then chooses alone.

C2: Leader stocks problems with fans as an organization, listens to ideas and then chooses alone.

G2: Leader shares problems with followers as an organization and then seeks and allows consensus agreement.

According to Vroom yet ton each decision is affected by twomajor factors

1. Decision Quality- May be the quality of your choice measurable?

a. Will the administrator have the required skills and information to consider? Do employees own that information?

b. Does the issue accessible have a structural quality? Is the situation structured?

c. Can the probability of decision being the correct solution be measurable?

2. Acceptance-

a. Does the execution of the decision require employee popularity? Do employees don't mind spending time to be involved?

b. Will the decision be accepted by employees if taken only by the administrator?

c. Will there be an id between staff and organizational goals?

The execution of the model is quite simple. If approval is of importance types A1 and A2 will be less appropriate. If the director considers decision quality as important and employees do not then G2 would be less appropriate.

Example of Decision Tree:

Source: Time management Guide

However, decision theory and decision tree can be used jointly. For instant a building company that has received favourable publicity from guest performances of public Tv set have improvement program. People TV development decision seen to be unstable thus cannot estimate the probability of continued benefit advantages from its relationship with the shown demand for improvements next yr may.

Thus, decision-making can be referenced, as being a central role of all operations managers Decision-making is a central role of all operations professionals. Decisions have to be made in
  • Designing the procedures system
  • Managing the procedures system
  • Improving the procedures system.

Conclusion: Businesses is one of the central functions of all organisations. It embraces all the activities necessary to create and deliver an organisation's goods or services to its customers or clients. Some managers have a particular and central role in the management of procedures such as a production administrator in a manufacturing plant or an functions administrator in a hotel string. However, most professionals have at least some businesses management aspect to their job. The primary target in the Operation Management on Decision Making is Create Money, Reduce Cost and keep maintaining Efficiency.

Slack et al (2006) argues that with businesses management decisions you can see what you are interacting with. You ca touch inventory, speak to people and program machines and so forth nevertheless, you cannot see strategy, feel it or touch it. The consequences of most procedures management decisions become visible relatively fast, it can be years before an functions strategy decision can be judged to be always a success or not Slack et al contributes (2006) on to say strategy is more than a single decision. Businesses strategy will be revealed in the total pattern of decisions a business consumes developing its businesses in the long run.

In the management the manager or decision creators always have airplane how can raise the company or establishment income and have to consider right decision. Your choice maker also takes care of the organizational cost. If he failed to protect his cost then he will be not a good decision manufacturer. Reduce cost create earnings and income is money. Finally your choice taken should maintain and continue its requirements, quality, and services with efficiencies.

The change model is a tool for analysing any kind of organisation in terms of the inputs, transformation process and outputs mixed up in functions function.

During the operation incidents or disruptions that could impact their normal businesses. Such situations may range from external threats such as a terrorist episode, natural devastation or pandemic, to localized and more common happenings such as lack of key IT systems.

We have viewed procedures management decision-making as an activity where effects are influenced by feasibility, desirability and desire factors. This helps the contention that the functions manager's decision-making process has clear cause and effect relationship with insurance policy decision-making and the decisions in other business functions. The reputation of these interactions and the adoption of a suitable decision-making process is a main requirement for effective procedures management, and the perfect solution is of particular problems must be observed as subsidiary part of the decision-making process. The operation manager's responsibility within the wide business framework must include the recognition of the fact that decisions in other functions will limit his own decision; but, similarly important, he must seek to influence those factors which bring about feasibility and desirability constraints on his decisions to be able to exercise his own performance.

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