Operational Management | Strategy and cost management

An operations management is a set of activities that generate value in the form of goods and services by transforming inputs into outputs.



The operations management is an activity related to the manufacture of goods, services and their combinations can, through a process of transformation of the production resources into the desire output.

An operations management is a management system or a series of processes in the manufacture of products or the provision of services.

The operations management is a field of management specializing in the production of goods, as well as the use of special tools and techniques to solve production problems.

At operations management is the science and art of ensuring that goods and services were create and successfully send to the customer.

So, operations management is the study of the process of conversion of the input into the output value to meet the needs of consumers.

Ten Strategic Operational Management Decisions

Differentiation, low cost and quick response can be achieve when managers make effective decisions in ten areas of operational management. This decision is known as a decision operation. The following ten operational management decisions that support the mission and strategy:

1. Design of goods and services. Design of goods and services set a large portion of the transformation process will be undertaken. The decision cost, quality and human resources rely on the decision of design.


2. The quality. Customer expectations to quality should be establish, standardize rules and procedures to identify and achieve the quality standards.


3. Process design and capacity. The decision process is taken to make the management took the commitment in terms of technology, quality, human resource deployment and maintenance of the specifics. This capital spending and commitment will determine the structure of the base cost of an enterprise.


4. Site selection. The decision of the location of the manufacturing and service organizations to determine the success of the company.


5. The design of the layout. The flow of raw materials, the require capacity, level of employees, inventory and needs technology decisions affect the layout.


6. Human resources and design work. The human being is an integral part of the overall design and expensive system. Therefore, the quality of the work environment, given the talent and skills that become, and wages should be determine clearly.


7. Supply chain management. This decision explains what to do and what to buy.


8. The decision of supplies can be optimize only if the satisfaction of customers, suppliers, production planning and human resources consider.


9. Production schedule a workable and efficient should be develop.


10. The decision should be complete on the level of reliability and stability desire.

Operational Management Strategy

The company achieved their mission through three ways:

Compete in differentiation.

Differentiation associate with serving something of uniqueness. Of differentiation must be define beyond the physical characteristics and attributes of the service that covers everything about the product or service affects value which consumers get from him.

Compete in costs.

Low cost leadership means to achieve maximum value as the desire customers. It requires testing of ten decisions of the management operations with a hard effort to lower costs and still meet the value expectations of customers. The strategy of low cost does not mean the value or quality of goods being low.

Compete in response.

The overall value that is associate with the development and timely delivery, scheduling is a reliable and flexible performance. Flexible response capability can be regard as fulfilling the changes that occur in the market. Where the going update drafting and volume fluctuations.

There are three strategies each providing opportunities for the managers of the operation to achieve competitive advantage. Competitive advantage means creating a system that has a unique advantage over other competitors. The idea is to create customer value (customer value) with an efficient and effective manner.