This assignment discusses the importance of operations to achieve the firm’s objectives with respect to sales, profitability and quality. This paper starts with a definition of operations management.
Operations Management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.
To be able to let the production of goods and services run efficiently, the company requires operations management. To create goods and services, all organizations perform marketing activities, production/operations activities and finance/accounting activities.
Operations management is of a significant importance to the department ...view middle of the document...
Maintenance is of high importance to a company since it establishes reliability in the production process. Operations management should appoint who is responsible for the execution of maintenance. When a machine for example, stops functioning due to a lack of maintenance, this results into a higher cost for the company. When a machine breaks down, parts of the production process are being shut down.
When this occurs companies can suffer losses. All these factors and many more can bring a long costs and it is the task of operations management to keep the cost down without having a trade-off in quality.
Operations management can lead to reducing costs in terms of labor, taxes, tariffs, etc. Operations management can make a company have a higher profit margin when being capable in lowering all kinds of different production costs in an effective and efficient manner.
In the value chain of Porter it becomes graphically clear that operations management is of the utter importance to a company and his other departments like inbound logistics, outbound logistics, marketing and sales, etc.
The effectiveness and efficiency of the production process can achieve a cost leadership, differentiation,...