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Operations Management For Dummies Cheat Sheet

September 5, 2023
Bill Kimball

Figuring out what the customer actually wants and delivering it is everything in business . Continuously improving the quality of processes is necessary to keep up with changing customer expectations. Better quality can also reduce waste and improve profitability. In this section we tell you exactly what operations management is — and what it’s not. Moreover, we point out why operations are such a critical part of an organization and why all departments must care about operations for an organization to be successful. When most people think of operations management, if any picture comes to mind at all, an image of a large factory billowing smoke often emerges.

Similarly, enterprise management software systems can’t improve a company’s processes. An EMS system, no matter how expensive it is, can’t improve a bad process. So clean up the process and then bring in the information technology to help the new process along if appropriate. The field of operations management is packed with adrenaline junkies and pressure hounds. But crises provide a high potential for inefficiency, mistakes, and customer disappointment. The goal of an operations manager is to create processes that respond smoothly to pressure so crises don’t erupt.

operations management for dummies

Whether your aim is to earn an undergraduate degree in business or an MBA, Operations Management For Dummies is indispensable supplemental reading for your operations management course. Clear documentation can also help with employee training and performance assessments, operational analysis, and other business functions. Operations managers usually use process maps to represent processes. The first step toward meaningful process improvements is finding out what’s working and what’s not. Unfortunately, few firms make the effort to even document their existing processes — let alone measure their performance! So initiatives to improve processes end up chewing through valuable resources, only to spit out new processes that fail to improve efficiency and boost the bottom line. A company with well-designed and perfectly functioning processes has a decisive advantage over its competitors, primarily because it uses resources to generate profits and doesn’t waste them.

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Even a rough process drawing can help you spot trouble points in the process, and the drawing can be perfected later as you work to improve the process. Businesses can’t operate successfully without effective operations and supply management.

So you want to move some of the workers from wheels to painting to improve the overall productivity. In general, business customers are much less forgiving of late deliveries than end consumers. This section highlights some important characteristics of organizations that can help illustrate the nature of certain processes. Regardless of which symbols you use, being consistent across process maps is important to avoid confusion. Figure 2-1 shows a black-box process for converting inputs to outputs. The term black box refers to the inability to see the transformation that’s occurring within the process.

operations management for dummies

Though most of this book concentrates on processes , operations managers must often deal with projects that are executed only once. However, some projects are big enough and occur often enough that reusable processes for managing them can emerge .

Now, Operations Management for Dummies takes the guesswork out of this often-intimidating subject. A product or service is only as good as the weakest link in the supply chain, the network of suppliers that provide the materials, services, and logistics that support an organization . If a company can make suppliers into actual partners in the business and integrate them tightly into product development and productivity improvement efforts, profitability follows . In other words, operations determine the cost, quality, and timing of the value proposition that a company delivers to its customers. Operations determine the customer experience, whether it’s a service or a tangible product. If the customer experience is good, then financials also tend to be good — and there are always ways to further improve the business model . If, on the other hand, operations and the customer experience are poor, then financials are also likely to be poor.

Pharmaceutical companies must stay focused on strict regulations, and firms in the personal computer industry need to worry about their products’ shelf life . To manage operations effectively, you need to understand a company’s processes in context of its business model and industry. Supply chain competence affects your bottom-line in more direct ways than you might realize. This pressure comes at a time when business is becoming more global, supply chains are lengthening, and competition is on the rise. Logistics is a part of the supply chain management that strategies, executes, and manages the storage and flow of products and goods between two points.

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Operations management covers much more than smokestacks or manufacturing parts and products; it also encompasses services and all sorts of projects and initiatives that groups of people undertake together. Operations management is all about efficiency, and Operations Management For Dummies is all about efficiently teaching you what you need to know about this business hot topic. This book tracks typical operations management MBA courses, and it will help you un-muddle concepts like process mapping, bottlenecks, Lean Production, and supply chain management. Learn to step into a business, see what needs improving, and plug in the latest tools and ideas to shape things up in any industry. People in various parts of an organization may assume that what happens in operations is simple. Operations managers may get resistance when they try to standardize, measure, or improve processes.

operations management for dummies

B2B firms tend to deal with a small number of customers with high quantity demands that require heavy customization and significant customer service. Whether you’re starting a new business or you’ve been trading for a while, Creating a Business Plan for Dummies covers everything you need to know. Figure out whether your business idea is likely to work, how to identify your strategic advantage, and what you can do to gain an edge on the competition. Discover why a business plan doesn’t have to be a 30-page document that takes days to write, but can be a simple process that you do in stages as you work through your business concept. Operations are tasks, activities or actions that transform an input in some useful way. Delays are moments in the process when the input is waiting for another operation, but no further change is occurring. Technically speaking, a process is a collection of operations that are connected by the movement of goods and information that transform various inputs into useful — and often consistent — outputs.

And the job of ensuring that a company’s processes are profitable belongs to — you guessed it — the operations manager. Operations managers must sometimes cope with a number of special situations. These range from one-off projects to outsourcing processes and may include managing immature or obsolete products.

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Nor do they get confused by poor signage, waiting in line, or bad process design. Discover how to overcome common process management challenges, such as shared resources, batching, and rework to keep things running as smoothly and efficiently as possible. Dummies has always stood for taking on complex concepts and making them easy to understand. Dummies helps everyone be more knowledgeable and confident in applying what they know.

His blog has introduced hundreds of thousands of readers to the best business books and most powerful business concepts of all time. Now, he shares the essentials of entrepreneurship, marketing, sales, negotiation, operations, productivity, systems design, and much more, in one comprehensive volume. The Personal MBA distills the most valuable business lessons into simple, memorable mental models that can be applied to real-world challenges.

  • This pressure comes at a time when business is becoming more global, supply chains are lengthening, and competition is on the rise.
  • Now, Operations Management For Dummies takes the guesswork out of this often-intimidating subject.
  • Customizing products usually means higher production costs per unit and higher prices for customers.
  • In fact, automation may make a bad process even worse because automating often hides problems and makes some issues more difficult to solve.
  • An operations manager may consider BVA activities for elimination or reduction, but he must first consider their impact on the rest of the business.
  • Mistakes or failures in upfront planning can’t be gradually fixed through later tweaks the way they can be for routine ongoing processes.
  • Delays are moments in the process when the input is waiting for another operation, but no further change is occurring.

(Find details on capacity in Chapter 7.) Finding the right balance of tools to handle demand variability can provide one of the biggest paybacks from operations management. Some, like ExxonMobil, take pride in their operational excellence. In the case of ExxonMobil, just 1 or 2 percentage points better energy efficiency or plant up-time can represent millions in additional profit. In the field of commerce, the term supply chain management is referred to as the effective management of the flow of products as well as services from the manufacturing units to the end customers. The definition and importance of effective supply chain management needs to be understood by the organizations of the world to ensure seamless operations and satisfaction of the end customer at the same time.

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One mark of a simple process is an easy-to-read process flow diagram . Complex processes are hard to schedule and manage; they accumulate lots of WIP and hide defects . If you need more capacity, make sure to add it at the bottleneck; adding it anywhere else doesn’t help and just wastes it. For non-bottleneck resources, resist the temptation to utilize them 100 percent of the time on the same job because this just ends up creating WIP that builds up.

That makes Operations Management For Dummies a must–for MBA students and business professionals alike. The idea of the supply chain is a basic one that has permeated economic systems since the earliest days of trade and commerce. It is simply a term referring to the collection of businesses or individuals responsible for transforming raw materials into products and then getting those products into the hands of consumers. Not much harm is done if a firm isn’t effective at completing a one-time, isolated process, but inefficiencies affecting ongoing critical tasks usually add up to big problems over the long run. Processes vary quite a bit based on the amount of face time with customers they involve. Service processes that don’t directly interface with customers, such as reconciling checks, are more like manufacturing processes than processes that involve interaction with customers. After all, reconciled checks, like pizzas or widgets, don’t become upset if the resource processing them doesn’t smile.

And, yes, factories that billow smoke are indeed performing operations, but they’re only a small subset of everything that’s involved with operations management. Ultimately, operations determine the cost, quality, and timing of every interaction an organization has with the people it serves.

Planning is important for any operation, but even more so for projects. Mistakes or failures in upfront planning can’t be gradually fixed through later tweaks the way they can be for routine ongoing processes.

Operations And Supply Chain Management Essentials You Always Wanted To Know Self

Get the lowdown on the fundamentals of operations management and understand why it’s so essential to successful businesses. Delays just increase the time required to create a product or serve a customer. Removing delays in a process has no effect on the quality of the end product.

Not all these CEOs studied operations in school; only some of them did. Many majored in finance, marketing, information systems, or engineering and ended up in operations at some point in their careers. In this chapter we point out what’s part of operations and what isn’t. We also describe key concepts in the world of operations and tell you what you can do to improve operations in a business or any other type of organization. A plain-English guide to improving business operations and increasing efficiency. You’ll find the most current, real-world advice on customizing an LLC for your specific business needs, creating a great operating agreement, keeping accurate records, and new information on federal regulations and fees that are applicable to LLCs.

The first point is the origin of the goods or the place of storage/production and the end point is the place where the products or goods are going to be consumed according to the demands of the customers in that specific area. Operations management is the development, execution, and maintenance of effective processes related to activities done over and over, or to one-time major projects, to achieve specific goals of the organization. In this chapter we explain the value of documenting processes and show you how to do it with process flow diagrams. You can also find definitions for common terminology used in the operations management world and get a handle on metrics used to assess process performance. The idea that outsourcing everything and becoming a marketing company is a viable strategy is a very real challenge for operations professionals. Outsourcing can be a good way for a company to reduce cost and improve quality by leveraging the expertise of its supply chain.