Performance Management in Operations Management

Abstract

Operations management is the process and activity of planning, designing, and controlling the process of production and redesigning business operations in the production of products or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in terms of meeting customer requirements. Operations management is primarily concerned with planning, organizing, and supervising in the contexts of production, manufacturing, or provision of services. It is concerned with managing an entire production or service system which is the process that converts inputs (in the form of raw materials, labour, consumers, and energy) into outputs (in the form of goods and/or services for consumers). Operations management involves the systematic direction and control of the processes that transform resources (inputs) into finished goods or services for customers or clients (outputs) as shown in Fig. 3.1. Operations produce products, manage quality, and create services. Operations management covers sectors like banking systems, hospitals, companies, working with suppliers, customers, and using technology. Operations is one of the major functions in an organization along with supply chains, marketing, finance, and human resources. The operations function requires management of both the strategic and day-to-day production of goods and services. In managing manufacturing or service operations several types of decisions are made including operations strategy, product design, process design, quality management, capacity, facility planning, production planning, and inventory control. Each of these requires an ability to analyse the current situation and find better solutions to improve the effectiveness and efficiency of manufacturing or service operations (Slack et al., 2013).