Production & Operations
The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems. Production and operations management talks about applying business organization and management concepts in creation of goods and services.
Production is a scientific process which involves transformation of raw material (input) into desired product or service (output) by adding economic value. Production can broadly categorize into following based on technique:
- Production through separation - It involves desired output is achieved through separation or extraction from raw materials.
- Production by assembly - Car production and computer are example of production by assembly.
Importance of Production Function and Production Management
Successful organizations have well defined and efficient line function and support function. Production comes under the category of line function which directly affects customer experience and there by future of organization itself. Aim of production function is to add value to product or service which will create a strong and long-lasting customer relationship or association. And this can be achieved by healthy and productive association between Marketing and Production people. Marketing function people are front-line representative of the company and provide insights to real product needs of customers. An effective planning and control on production parameters to achieve or create value for customers is called production management.
As to deliver value for customers in products and services, it is essential for the company to do the following:
- Identify the customer needs and convert that into a specific product or service (numbers of products required for specific period of time).
- Based on product requirement do back-ward working to identify raw material requirements.
- Engage internal and external vendors to create supply chain for raw material and finished goods between vendor production facility customers.
Production Management v/s Operations Management
Production management and operations management both are very essential in meeting objective of an organization.
A high-level comparison which distinct production and operations management can be done on following characteristics:
- Output - Production management deals with manufacturing of products like (computer, car, etc) while operations management cover both products and services.
- Usage of Output - Products like computer/car are utilized over a period of time whereas services need to be consumed immediately.
- Classification of work - To produce products like computer/car more of capital equipment and less labor are required while services require more labor and lesser capital equipment.
- Customer Contact - There is no participation of customer during production whereas for services a constant contact with customer is required.
Operations: Policy & Strategy
It is very important for an organization to have well defined objective. A well-defined objective facilitates development of strategies and policy thereby creating value for customers.
- Operational strategy is essential to achieve operational goals set by organization in alignment with overall objective of the company.
- Operational strategy is design to achieve business effectiveness or competitive advantage.
- Operational strategy is planning process which aligns the following:
- Strategic Management Process for Production and Operation
For success of organizational strategic objective, strategic planning has to trickle down to various function areas of the business. In order to build strategy management, process a sequential process as below is followed:
- Competition Analysis - In this step company evaluates and studies current competition in the market and practices that are followed in the industry for operations and production.
- Goal Setting - Next step involves narrowing down the objective towards which the organization wants to move towards.
- Strategy Formulation -The next step is breaking down of organizational goals into operations and production strategies.
- Implementation - The final step is to convert operations and production strategies into day to day activities like production schedule, product design, quality management etc.
As organizations are always customer-centric, production and operation strategy for organization are built around them.
Measurement of formulated operations and production strategy is important to maintain alignment with the organization objectives. In simple terms productivity is defined as sum of total output per employee or per day. Productivity of company is dependent on industry and environmental conditions in which it is operating.
Two essential part of productivity are labor and capital. In scenario of limited resources, optimum and efficient utilization of labor and capital will generate favorable productivity. Productivity measurement also enables company to identify areas which require improvement or special focus. Also, productivity provides ready report card to measure status against company’s production object
Phoenix labor strategy experts design and implement operations and labor strategies for companies requiring rapid and sustainable improvements. They serve as trusted advisors to management teams, hourly employees, and unions (when applicable), using a hands-on approach that consistently eliminates eleven percent to seventeen percent of total labor costs, increases productivity among shift workers, advances employee recruiting and retention, and drives current employee engagement and happiness.
Our labor strategy experts work with clients through three distinct and separable phases. Our operations and labor strategy review focus on identifying quantifiable cost-saving opportunities and developing action plans to capture them. Our employee feedback and engagement survey assist management and owners in understanding what both prospective and current employees really want and need. Lastly, our
implementation team composed of senior operating experts helps our clients drive to value through hands-on execution of management-approved initiatives.
We support these services through a number of unique offerings:
- Operations and labor strategy workshop to quickly identify immediate opportunities
- Operations and labor strategy review to quantify cost-saving opportunities
- Customized employee engagement survey and benchmarking
- Labor stabilization (during periods of distress)
- Shift work change management implementation
- Staffing plans and strategy
- Labor and staffing operations due diligence and cost-saving estimation
- Labor requirement forecasting and profitability modeling