Operations Management and its Objectives
Operations management objectives can be categorized into two primary areas: customer service and resource utilization.
Customer Service
The first objective of an operating system is customer service, which aims to satisfy customer needs and expectations. Ensuring customer satisfaction is a key goal of operations management. The operating system must deliver products or services that meet specific requirements concerning specification, cost, and timing.
The primary objective can be summarized as providing the right product or service at the right price and at the right time.
Aspects of Customer Service
Table 1.2 outlines the key aspects of customer service across different functions:
| Principal Function | Primary Considerations | Other Considerations |
|---|---|---|
| Manufacture | Goods must meet a given, requested, or acceptable specification. | Cost (purchase price or cost of obtaining goods) & Timing (delivery delay from order/request to receipt). |
| Transport | Management of a given, requested, or acceptable specification. | Cost (cost of movements) & Timing (duration of movement, waiting time from request to commencement). |
| Supply | Goods must meet a given, requested, or acceptable specification. | Cost (purchase price or cost of obtaining goods) & Timing (delivery delay from order/request to receipt). |
| Service | Treatment must meet a given, requested, or acceptable specification. | Cost (cost of movements) & Timing (duration of treatment, waiting time from request to commencement). |
Organizations strive to maintain reliability and consistency in meeting these customer service standards. Operations managers play a crucial role in ensuring these standards are met, directly influencing decisions to achieve the required level of customer service.
Resource Utilization
The second major objective of operations management is effective utilization of resources. The goal is to provide customer service while ensuring efficient use of available resources. Inefficiency or inadequate resource utilization can lead to operational and commercial failure.
Operations management focuses on:
- Maximizing the effectiveness of resources.
- Minimizing loss, underutilization, or waste.
- Measuring utilization in terms of time, space, and activity levels.
This objective, referred to as resource utilization, ensures that an organization's potential is fully leveraged.
Balancing Customer Service and Resource Utilization
Operations management must achieve a balance between customer service and resource utilization. An improvement in one area often comes at the cost of the other, requiring careful trade-offs. A satisfactory balance is crucial for overall performance.
Summary of Twin Objectives
| Objective | Description |
|---|---|
| Customer Service | Ensure customer satisfaction by delivering goods or services with the right specification, cost, and timing. |
| Resource Utilization | Achieve agreed levels of utilization for materials, machines, and labor to optimize productivity. |
The balance between these objectives is influenced by market conditions, competition, and organizational strengths and weaknesses. Operations managers play a key role in setting and maintaining this balance.
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