Cbmec 1 M1 Wed

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CBMEC 1
OPERATIONS MANAGEMENT
MODULE 1
(Wednesday)
The four core business processes in this model are described below:
o Determine Customer Needs
 It is critical for the organization to know the customers needs in
order to support the firm’s demand, its forecasting needs and its
product design and development activities.
 The supporting business processes are involved in marketing
products and providing after-sales service.
o Develop Product Strategy

 This involves marketing, operations, and engineering activities in
order to create products that customers desire.
 This requires an ability to evaluate product concepts so that there is
support to design new products or introduce product improvements.
o Secure Processes and Materials to Satisfy Demand

 Management activities involve selection of raw materials from
vendors and the ultimate delivering and servicing of the product for
the customer.
 These activities include operations planning and control
processes and managing the product transformation
processes.
 In addition, the business logistics and the supply chain process play
a critical part and have to be managed effectively.
o Manage Strategic Planning Processes

 Support business processes are essential to all organizations.
 The strategic planning process defines the firm’s as well as its own
Operations Management function.
 It also specifies what it must do to achieve its corporate goals.
 The human resource management function creates an organization
design that is suited to the competitive environment and provides
and/or enhances the human capital needed by other functions to
effectively carry out their tasks. The Management Information
Systems groups provide timely information that is needed to assess
the competitive environment and the performance of its business
functions.
 The accounting and finance groups monitor the use of financial
assets and take steps to ensure that the financial base of the
Neha Tikko, Neha (Editor). Production and Operations Management. Excel Books Private Limited.
https://ebooks.lpude.in/Management/Bba/Term_4/Dmgt206_Production_And_Operations_Manageme
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organization is both adequate and efficiently utilized. There has to

be an adequate interface between all these functions.
Operations Management processes are designed to deliver value and contribute

to the customer satisfaction process in two significant ways:
o 1. Operations Management assists in the organization’s product

innovation process to design and develop products that can satisfy the
customer’s functional need with the desired level of design quality and
cost.
o 2. Product Design determines product specifications to meet customer

needs; Process Development subscribes the production methods
necessary to make the products.
Business and organizational performance can be judged on its capability to: 

o Deliver a product that measures up to design specifications.
o Be flexible enough to offer products to customers depending on how,
when, and where they want it.
o Do the above at an acceptable cost.
Decisions areas
o Structural decisions refer to the ‘hardware’ of organizations; they are long-
term decisions that require substantial capital investment and are difficult
to reverse once they are in place.
 Example: The structural decisions are the number and size of
facilities and the type of processing equipment.
o Infrastructural decisions are the ‘software’ of operations. These are
typically tactical in nature and facilitate the management of day-to-day
issues.
 Example: Machine loading and the changing of ‘dies’ in a forging
unit.
o Organizational decisions - effective operations managers must show
commitment—both to their employees and to the organization’s
objectives.
Interface of Operations Management with other functional areas in the

organization are described below:
o 1. Operations Management-Marketing Interface - marketing is responsible

for understanding customer needs, generating and maintaining demand
for the firm’s products, ensuring customer satisfaction, and developing
new markets and product potential. The firm’s strategic positioning and its
market segmentation decisions to a large extent determine the
manufacturing and operations strategy.
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o Operations Management-Finance Interface - capital equipment, cost-

control policies, pricevolume decisions and inventories constitute the
interface with financial decision making. As acquisition and management
of assets is an important part of decision making, finance and operations
need to work together to understand the nature of technology used in
operations and the practice-performance gap in their organization.
o Operations Management-Design Interface - shrinking product lifecycles

have been adding to the demands on the product development process.
This is especially true for industries that have a high clock-speed.
Launching more new products faster requires tight integration between the
design and Operations Management functions. Initiatives such as
simultaneous product engineering and early supplier involvement in the
product design process not only add to the role of operations but also
improve the perception of value provided in the product and service
concept design process.
o Operations Management-Human Resource Interface - no plant manager

anywhere would ignore the role of good people management in running an
efficient operation. The human resource function includes operation’s
approaches such as continuous improvement and total quality that rely
mainly on human inputs. Decisions about people and the organization of
the operations function interact significantly with both structural and
infrastructural decisions. Such issues are not unique to the operations
function, however; they impact other functions and are dealt with more
effectively through the human resource management function.
o Operations Management-Information Systems - information systems

provide, analyze, and co-ordinate the information needs of operations.
The distributed processing environment and the growth and evolution of
Enterprise Resource Planning (ERP) systems for the organization have a
direct impact on operations. It allows organizations to generate relevant
information and make appropriate information available when needed. The
operational plans become the driver of all business planning including
recruiting, cash flows, and marketing promotions. With Computer
Integrated Manufacturing (CIM) systems IT plays a very important role
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1

o Develop Product Strategy

o Secure Processes and Materials to Satisfy Demand

o Manage Strategic Planning Processes

organization is both adequate and efficiently utilized. There has to

Operations Management processes are designed to deliver value and contribute

o 1. Operations Management assists in the organization’s product

o 2. Product Design determines product specifications to meet customer

Business and organizational performance can be judged on its capability to: 

Interface of Operations Management with other functional areas in the

o 1. Operations Management-Marketing Interface - marketing is responsible

o Operations Management-Finance Interface - capital equipment, cost-

o Operations Management-Design Interface - shrinking product lifecycles

o Operations Management-Human Resource Interface - no plant manager

o Operations Management-Information Systems - information systems

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