The most important thing before comprehending the process of operations management is understanding the entire concept of its system.A collection of processes, men and objects which are used for the operation in a particular work environment is defined as a system.
There are 2 important aspects in Management system. They are:
- Management
- Systems
Management here is described as a social process where material resources and human coordination is actively involved. This organisational involvement is made through few functions which revolve around planning, staffing, organising, forecasting, controlling and directing, and is used for achieving the objectives in an effective way.
The accomplishments of correct objectives by utilising conventional methods effectiveness of management can be related.When minimum resource amount is utilised for achieving the objectives, efficiency can be related to it.
In simple words, the decision to reach any certain place depends on the proceeding direction and then running very fast in a systematic way to reach to that place.
There are 5 parts in a production system.
- Inputs
- Conversion Process
- Outputs
- Feedback
- Operating environment
Inputs are converted into outputs in this process. Here inputs are the resources which are divided into 3 parts.
- Material resources
- Human resources
- Time resources
Material or human resources comprises of intangible resources of all types. They include energy, techniques, knowledge, management process and other types of resources.
The required resources which are used for meeting the specifications for commodities and services are termed as outputs.
The third aspect is the operating environment where conversion of resources takes place providing a desirable result. This factor is counted as the most important aspect, as it is environment which provides other resources as well as distinct manpower quality.
It can be easily relayed in the form of an example. Consider the example to be of the production facilities of Maruti Udyog limited (MUL) which is established at Gurgaon. An advantageous factor is its placement near Delhi. Another reason of this added benefit is the availability of the type of workforce and their work ethics in a unique environment. It is a much better option in comparison to any other locations in the country.
The inputs shown in the operating system is not only limited to capital, land and labour. It also encompasses vehicles in a repair workshop, customers of road and railways, patients in a hospital, guests in a hotel,customers in a bank and so on.
The output may be in the form of patients treated by a hospital, complete or semi-finished commodities, messages delivered by a courier company, goods transported by trucks or train, or even a repaired vehicle. It can be only obtained when the inputs pass through a complete conversion process.
Productivity of conversion process is another attribute of the production system. The output to input ratio can be discovered with the help of productivity of conversion process’s efficiency.
Production (P) (Output (O))/(Input (I))
From the given productivity definition which is stated above, it is clear that it can be enhanced. There are 3 ways by the help of which this improvement can be achieved.
- Increasing outputs of advantageous and specific standards with similar inputs.
- Reducing input levels for same outputs.
- Increasing outputs and decreasing its input to alter productivity ratio.
One should have a clarity between productivity and production and have a good understanding about the two. The generated ‘scrap’ or ‘waste’ in the entire conversion process is an important constituent in a production system.
A scrap does not always relate to only used material. Even if a material which has not been processed but is kept waiting in stores due to the unavailability of workmen or a machine, it is also called a ‘waste’.
For example, a vehicle sent to a repair shop has to be kept there because of inadequate facilities or because of less manpower. If this scenario is considered in an efficient production system, the vehicle is regarded as a ‘scrap’ which is required to be decreased for increasing a system’s productivity.
A correction in the system is a must if the output is not for what it is desired. This rectification can be made with the help of feedback. The feedback being a production system’s essential part can be obtained by 3 ways.
- Regular monitoring of outputs.
- Differential result between the desired outputs and actual outputs.
- Differential result as an input which is used in the conversion process is required for the correction.
Links of Previous Main Topic:-
- Introduction and types of dividend
- Concept of cost of capital
- Capitalization meaning
- Concepts of working capital
- Concept of capital expenditure
- Learning objectives and chapter outline
Links of Next Finance Topics:-
- Important features of operation research
- Types of operation research models
- Methodology of operation research
- Tools of operation research
- Important application of operation research
- Pitfalls in the use of operations research for decision making
- Some applications of linear programming
- Review and discussion questions limitations of operations research
- Linear programming learning objectives and outline of chapter
- Introduction learning objectives
- Duality in linear programming
- Learning objectives
- Learning objectives and chapter outline in assignment model
