Operations management is about managing the activities and processes that create
and deliver an organization's core products and services. But what is this mysterious discipline?
And what do these people do who often behind the scenes are responsible for basically everything
that gets made or done in the world? Hi, I'm Laurence Gartside I give online training and
consults in business operations management through my site, rowtons training helping you
level up your business operations fundamentals. If operations managers manage operations then first
what are they? Business operations are the core daily activities that an organization does every
day to create value and earn a profit. It's one of the primary functions or departments of any
organization alongside the likes of marketing or finance. Operations are the doing, making,
helping, delivering the real work that creates and provides what the customer wants. From a coal mine
digging up coal, an airline transporting people, a restaurant cooking food and serving customers,
a digital marketing agency doing its graphic design and setting up ad campaigns.
The operations are the core activities of those businesses, the systems that transform inputs into
higher value outputs. The coal mine has inputs of labor, machinery, materials, energy, expertise and
transforms it into coal in lorries which is much more valuable than coal in a mountain. An airline
also has inputs of labor, machinery, planes, materials, energy and expertise and transforms
people who are in one city to people who will pay to be in another city. The marketing agency
still uses machines mostly just laptops and also labor, energy, and expertise and creates graphics
and Instagram news feeds that their clients pay handsomely for. Is this really so different from
a factory with inputs of labor, machines, energy, materials expertise and transforms them into other
objects that customers will pay more for than the inputs that went in. For the operations
managers in each of these organizations so many of the fundamental challenges are the
same. Operations managers design, plan, run and improve these systems. Operations management
involves coordinating the input resources to be ready where and when they are needed,
forecasting of future demand to allow decisions on how much labour space materials are needed.
Capacity planning is closely linked and is the act of making longer-term decisions of
what the organization wants to be capable of delivering both next week but also five or
ten years into the future. Demand management is about actively influencing your demand,
keeping it within your capabilities, smoothing it to keep a regular flow of work that can be
efficiently delivered. Scheduling is making plans and decisions about when and in what
sequence jobs should be done both reacting to the daily disruptions and urgent changes
but also strategic decisions for what delivery objectives the business wants to be optimized for.
Then you've got resource requirements planning, oh yeah, that's my go-to dinner party topic
but Hey no resource requirements planning and there won't be a dinner party. How many guests
special dietary requirements, shopping lists made, well-timed supermarket runs to have nice fresh
ingredients, chopping and preparing done well ahead of time and being familiar with the recipe
to plan when everything has to be in the oven so that it's ready right on time for dinner.
See? There's more operations managers out there than you thought. Scale that up to a restaurant
of 10 staff, a hundred different ingredients having to be bought stored prepared and
cooked for a hundred customers served lunch and dinner each day or a 50 million dollar factory,
500 staff and a few hundred million dollars of goods per year flowing through all being prepared
to a tight schedule and you're getting some of the essence of what the Operations Managers are up to.
Before the factory or restaurant even gets built operations management is
the essential discipline to design the system, what equipment staffing layout
processes will be required to be able to deliver a certain set of capabilities, a certain capacity
at a desired quality level within a certain output rate how should the operations strategy align with
the overall business strategy to offer a business winning competitive edge perhaps through lowest
cost or fastest delivery or by having the highest level of customization to the product or service
and then, once everything is up and running how do we know if we're doing a good job? Operations
management involves performance management, designing essential metrics, collecting relevant
data, analyzing, presenting, sharing and acting on it to understand what is and isn't working well,
identify improvements and track progress. Operations management is about getting stuff
done, designing and running effective and efficient systems and processes to create
value for the world. Thank you for watching this video, please remember to thumbs up, subscribe,
ring the bell and share your insights below. And, if you want to learn more about Operations
Management, Supply chain, logistics, inventory, performance improvement, well, watch my next video
or check out my library of courses on my site rowtonstraining.com. All right then, crack on!