OPERATIONS MANAGEMENT PLANNING is the development of plans and strategies that will allow your

business to effectively seize opportunities and meet challenges head on. It's linking strategic business goals to
tactical objectives, which are intermediate steps taken to achieve your goals. Operations management planning
also involves taking the necessary steps on the ground for achievement of business goals. Let's take a closer look
at the process.

Strategic Planning
Strategic planning involves the big picture and consists of several different components. First, strategic planning
addresses product design. At this stage of planning, you are determining what new products your tech company
is going to produce and the primary features of the product. Let's say that you've decided to develop a new
generation of computer tablets to complement your smart phones.
The next step in strategic planning is determining the production processes you are going to use. There are two
steps here: a technical component and a business component. The technical component of planning requires
your operation managers to figure out what type of equipment is needed and what type of raw materials, parts
and components will be needed to build the tablets. And let's not forget that we need to figure out the best way
to put the tablets together when production starts.
The business component revolves around anticipated consumer demand. Important questions need to be
answered to make good decisions. Does your marketing research indicate that the tablet will be popular enough
to support mass production right off the bat? Will demand be so high that you need to have a facility dedicated
to manufacturing just these tablets? Are you going to design different versions of the tablet given a variety of
consumer preferences, or do most consumers want the same features?
After your team has figured out the production processes, it needs to determine the facility design and
location. Facility design involves building a facility with the right equipment, layout and capacity. Capacity is
the ability of a facility to produce the products demanded by your customers in the time required. Forecasting
the demand for your product will be an important part of planning the correct level of capacity.
Keep in mind that building a facility is a huge investment of capital and time - which is why it's a strategic
decision. You also need to consider the location of the facility. Factors you will consider when picking a location
include local labor supply, local government regulations, transportation costs and the initial capital investment
required.
Overseeing
An operations manager fills a pivotal role in a business, government or other organization. The precise tasks of
an operations manager depend in large part upon the nature and size of the enterprise, but she needs a wide
range of business and interpersonal skills to succeed. In general, an operations manager plans, oversees and
smooths communication.
cost

Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day
basis. The operating cost is a component of operating income and is usually reflected on a company’s income
statement. While operating costs generally do not include capital outlays, they can include many components of
operating a business including:

 Accounting and legal fees

Control

Quality management plays an imperative role in selling a product. The operation managers allocate the task of
quality management to a team and then supervise their task. The managers identify project defects and rectify
them to ensure quality. For this, certain systems are used that measure and maintain the quality of the product.
Five Differences between Service and Manufacturing Organizations
There are five main differences between service and manufacturing organizations: the tangibility of their output;
production on demand or for inventory; customer-specific production; labor-intensive or automated operations;
and the need for a physical production location. However, in practice, service and manufacturing organizations
share many characteristics. Many manufacturers offer their own service operations and both require skilled
people to create a profitable business.
Physical Goods
The key difference between service firms and manufacturers is the tangibility of their output. The output of a
service firm, such as consultancy, training or maintenance, for example, is intangible. Manufacturers produce
physical goods that customers can see and touch.
Inventory Levels
Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it.
Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some
manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their production
capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a manufacturing
organization.
Customer Demands
Service firms do not produce a service unless a customer requires it, although they design and develop the scope
and content of services in advance of any orders. Service firms generally produce a service tailored to customers’
needs, such as 12 hours of consultancy, plus 14 hours of design and 10 hours of installation. Manufacturers can
produce goods without a customer order or forecast of customer demand. However, producing goods that do not
meet market needs is a poor strategy.
Labor Requirements
A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Service
delivery is labor intensive and cannot be easily automated, although knowledge management systems enable a
degree of knowledge capture and sharing. Manufacturers can automate many of their production processes to
reduce their labor requirements, although some manufacturing organizations are labor intensive, particularly in
countries where labor costs are low.
Physical Location
Service firms do not require a physical production site. The people creating and delivering the service can be
located anywhere. For example, global firms such as consultants Deloitte use communication networks to access
the most appropriate service skills and knowledge from offices around the world. Manufacturers must have a
physical location for their production and stock holding operations. Production does not necessarily take place
on the manufacturer's own site; it can take place at any point in the supply chain.
Differences in Manufacturing Versus Service Operations
All organizations can be broadly divided into two categories: manufacturing organizations and service
organizations. Although both categories have an OM function, these differences pose unique challenges for the
operations function as the nature of what is being produced is different. There are two primary distinctions
between these categories of organizations. First, manufacturing organizations produce a physical or tangible
product that can be stored in inventory before it is needed by the customer. Service organizations, on the other
hand, produce intangible products that cannot be produced ahead of time. Second, in manufacturing
organizations customers typically have no direct contact with the process of production. Customer contact
occurs through distributors or retailers. For example, a customer buying a computer never comes in contact with
the factory where the computer is produced. However, in service organizations the customers are typically
present during the creation of the service. Customers here usually come in contact with some aspect of the
operation. Consider a restaurant or a barber shop, where the customer is present during the creation of the
service.

The differences between manufacturing organizations and service organizations are typically not as clear-cut as
they might appear in the preceding example. Usually there is much overlap between them, and their distinctions
are increasingly becoming murky. Most manufacturers provide services as part of their business, and many
service firms manufacture physical goods they use during service delivery. For example, a manufacturer of jet
engines, such as Rolls Royce, not only produces engines but services them. A barber shop may sell its own line of
hair care products.

We can further divide a service operation into high contact and low contact segments. High contact segments
are those parts of the operation where the customer is present, such as the service area of the post office or the
dining area of a restaurant. However, these services also have a low contact segment. These can be thought of as
 “back room” or “behind the scenes” segments. Examples would include the kitchen segment at a fast-food
restaurant or the laboratory for specimen analysis at a hospital.

Finally, in addition to pure manufacturing and pure service, there are companies that have some characteristics
of each type of organization. It is difficult to tell whether these companies are actually manufacturing or service
organizations. An excellent example is an automated warehouse or a mail-order catalog business. These
businesses have low customer contact and are capital intensive. They are most like manufacturing organizations
yet they provide a service. We call these companies quasi-manufacturing organizations.

Importance of Operation Management

Operation management is a process that involves planning, organizing, managing, controlling and supervising
the production and manufacturing processes. The major aim of an operation manager is to ensure timely delivery
of the products and to successfully turn the raw materials into the finished products (input to
output). Operations Management plays a vital role to run any project successfully. Its benefits include:

 Operation management involves similar management for every industry or business irrespective of their
nature of the operation. Planning, organizing, staffing, monitoring controlling, directing and motivating are its
significant elements. Operation management is obligatory for organizations to manage the daily activities
seamlessly. With its help, an organization is able to make good use of its resources like labor, raw material,
money and other resources.
 Operation Management is important to improve the overall productivity. The ratio of input to output is
termed as productivity. It gives a measure of the efficiency of the manager as well as the employees. Since the
discipline focuses on using the available resources in the best possible way to achieve end goals, so it improves
the overall productivity.
 Operation management is the management of the various business activities that take place within an
organization and contributes in making the products to align with customer’s requirements. Operation
management is the heart of an organization as it controls the entire operation If the products are made catering
to the needs of the customers then, they’ll be sold at a rapid rate.
 Under operation management, there is the optimum utilization of resources leading to enormous profits
of the organization. The efforts of the employees and the various raw materials are efficiently utilized and
converted into the services and goods required by the organization. Operation management plays a crucial role
in an organization as it handles issues like design, operations, and maintenance of the system used for the
production of goods.
 Earlier everyone believed that the operation management was not that important for the organization,
but later on, it was discovered that it is actually important for the functioning of the organization. It was found
that the manufacturing of raw materials to make the goods and selling them along with management of sales is
necessary, and this is done efficiently by managing the operations.