Question

Discuss the management of many business functions to include production and manufacturing and suppliers which is key to achieving operating profit.

Answer 1

Operations management is the management of processes that transform inputs into goods and services that add value for the customer.

he goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs.

Countless operating decisions must be made that have both long- and short-term impacts on the organization’s ability to produce goods and services that provide added value to customers. If the organization has made mostly good operating decisions in designing and executing its transformation system to meet the needs of customers, its prospects for long-term survival are greatly enhanced.

For example, if an organization makes furniture, some of the operations management decisions involve the following:

• purchasing wood and fabric,
• hiring and training workers,
• location and layout of the furniture factory,
• purchase cutting tools and other fabrication equipment.

If the organization makes good operations decisions, it will be able to produce affordable, functional, and attractive furniture that customers will purchase at a price that will earn profits for the company.

• Operations management transforms inputs (labor, capital, equipment, land, buildings, materials, and information) into outputs ( goods and services ) that provide added value to customers.
• All organizations must strive to maximize the quality of their transformation processes to meet customer needs.
• Controlling the transformation process makes it difficult for competitors to manufacture products of the same quality as the original producer.

It is now widely recognized that one of the main determinants of business profitability is market share. Under most circumstances, enterprises that have achieved a high share of the markets they serve are considerably more profitable than their smaller-share rivals.

Whatever you manufacture has to be something that customers really want to buy. You have to design it right. We’re really focused on being connected to the customer.” To that end, Deere’s factories maintain a robust feedback loop with the design, engineering, and research and development functions. Nurturing market sensitivity can be a problem for manufacturers that shift production offshore in pursuit of cost savings.

An integrated supply chain can be defined as an association of customers and suppliers who, using management techniques, work together to optimize their collective performance in the creation, distribution, and support of an end product. It may be helpful to think of the participants as the divisions of a large, vertically integrated corporation, although the independent companies in the chain are bound together only by trust, shared objectives, and contracts entered into on a voluntary basis. Unlike captive suppliers (divisions of a large corporation that typically serve primarily the parent corporation), independent suppliers are often faced with the conflicting demands of multiple customers.

All supply chains are integrated to some extent. One objective of increasing integration is focusing and coordinating the relevant resources of each participant on the needs of the supply chain to optimize the overall performance of the chain. The integration process requires the disciplined application of management skills, processes, and technologies to couple key functions and capabilities of the chain and take advantage of the available business opportunities. Goals typically include higher profits and reduced risks for all participants