Abstract
"There have been many significant changes in operations management during the past few years, involving such aspects as quality, reduction in inventory and costs, improving delivery and lead times." We are going to discuss these changes, the consequences and expectations for Operations Management today.
Business' environment is changing. We are going to study these changes but before we need to remind what operation management is. We can define operation management in different ways but the main definition was said by Davis Aquilano: "Operations management is the process which transforms inputs such as raw materials and labor into outputs in the form of finished goods and services"
Before we were talking about "production" or "manufacturing" but nowadays, we call it "Operations Management". The aim of an operation manager is to deal with techniques and methods to manage a company effectively and efficiently and not the manufacture of physical goods.
Extract
[...] Then, since 1990, we have noticed the apparition of new concepts such as supply chain management, efficient customer response, and enterprise resource planning. Operation management saw lots of changes during the last decade and continue to evolve. Managers have to adapt their strategy in order to make more profit and win market share: by improving quality and reducing costs, according to the evolution of the environment. To conclude, operation management needs an efficient adaptation with society and environment to permit a company to succeed on the market. [...]
[...] Stocks represent money. We can separate three kinds of stock: speculative stocks (important to face to variation price), safety stock (to face to the problem of consumption or restock), and tool stock. Cost of Stock is very high because implies additional costs. Indeed, there are holding costs (cost of inventory), Ordering cost (cost of order processing, supplies?) and setup cost (cost of preparation of a machine to manufacture an order). As the aim of operation management is reduce costs, we can understand why reducing inventory reduces costs. [...]
[...] That is why design need to be study by the operations managers . To sum up, there were lots of changes affecting the environment in the last few years: we are improving quality, design, and in the same time reducing inventory, delivery times, stocks and costs. Firms have to react quickly and adapt themselves that is why internet is a key to the time problem. IV. Consequences and expectation for the future All the changes we talk about previously have for consequence to improve productivity. [...]
[...] Operation manager are almost now using only internet: it is a necessary tool to reduce delivery time. - Competitiveness between firms is a cause of change in operation management, because it's closely linked with globalisation. Each company wants to have the biggest market share. Competitiveness can accelerate the innovation and the production and the degree of efficiency. - Finally, we can't forget to talk about the evolution of society: it is an external factor but it has a big impact on change in production. [...]
[...] As I said before, firms are using the software Enterprise Resource Planning which "attempts to consolidate all of a company's departments and functions into a single computer system that services each department's specific need". We can consider it as a convergence of people, hardware and software into something efficient, service and delivery system that are finally used to create profit for the company. The ERP2 bring lots of advantages at the condition that there is coordination. Today, companies have to deal with interconnected businesses. The Supply chain management (SCM) is the management of a network of all these areas involved in the production. [...]
