Creative Management Operations


Operations management was a major area of organizational creativity in the era of scientific management during the late 19th and early 20th centuries. It got a recharge in the 1950s and 1960s when mathematics and computer science were utilized through operations research models to schedule production, arrive at optimal inventory levels, and so forth. The superior productivity and quality of Japanese manufacturing induced a further revolution in operations management in the 1970s and 1980s, and management vocabulary was enriched by Just-in-time (JIT), Kanban, Total Quality Management (TQM), quality circles, continuous improvement, and so forth. And yet there is much scope for operations-related creativity.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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Basic Organizational Structures


Although there is an almost infinite variety of structural forms, certain basic types predominate in modern complex organizations. There are three basic organizational structures. The conglomerate structure is a variant of divisional structure and is thus not depicted as a fourth structure. Generally speaking, each structure tends to support some corporate strategies over others.

  • Simple Structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Employees tend to be generalists and jacks of all trades.
  • Functional structure is appropriate for a medium-sized firm with several related product lines in one industry. Employees tend to be specialists in the business functions important to that industry, such as manufacturing, marketing, finance, and human resources.
  • Divisional structure is appropriate for a large corporation with many product lines in several related industries. Employees tend to be functional specialists organized.
  • Strategic business units (SBU)are a recent modification to the divisional structure. Strategic business units are divisions or groups of divisions composed of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas. An SBU may be of any size or level, but it must have 1) a unique mission, 2) identifiable competitors, 3)an external market focus, and 4) control of its business functions. The idea is to decentralize on the basis of strategic elements rather than on the basis of size, product characteristics, or span of control and to create horizontal linkages among units previously kept separate.
  • Conglomerate structure is appropriate for a large corporation with many product lines in several unrelated industries. A variant of the divisional structure, the conglomerate structure (sometimes called a holding company) is typically an assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors. The unrelated nature of the subsidiaries prevents any attempt at gaining synergy among them.

If the current basic structure of corporation does not easily support a strategy under consideration, top management must decide if the proposed strategy is feasible or if the structure should be changed to a more advanced structure.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Good Maintenance


Good maintenance is fundamental to productive manufacturing system; try running a production line with faulty equipment. Total productive maintenance is keeping the current plant and equipment at its highest productive level through cooperation of all areas of the organization. Generally, the first task is to break down the traditional barriers between maintenance and production personnel so they are working together. Individuals working together without regard to organizational structure, using their skills and ingenuity, have common objective—peak performance or total productivity.

This approach does not mean that such basic techniques as predictive and preventive maintenance are not used; they are essential to building a foundation for successful total productive maintenance environment. Productive maintenance is the process of using data and statistical tools to determine when a piece of equipment will fail, and preventive maintenance is the process of periodically performing activities such as lubrication on the equipment to keep it running.

The total maintenance function should be directed towards the elimination of unplanned equipment and plant maintenance. The objective is to create a system in which all maintenance activities can be planned and not interfere with the production process. Surprise equipment breakdowns should not occur. Before the advent of computer-aided manufacturing, operators in some organizations were responsible for their machines and took a certain pride of ownership. With the help of maintenance technicians, operators spent part of their work time keeping their equipment in good running order. Recent technical advances have given us more tools to perform the maintenance function.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Production Management


Production is the use of people and machines to convert materials into finished products and supply these products to customers. Production includes three key stages: product development, purchasing, and manufacturing.

The development of a new product involves six steps: idea generation, screening, business analysis, product development, test marketing, and commercialization. Roughly, one in 58 new product ideas becomes a commercial success.

When the product development department designs a new product, a make-buy decision determines which components will be bought from outside suppliers and which will be made by the firm itself.

The six steps in purchasing raw materials and semi-finished and finished parts are 1) recognizing what is needed, 2) developing specifications, 3) requesting bids and selecting a vendor, 4) following up with the vendor, 5) receiving the order, and 6) evaluating the vendor.

Mass production and automation have revolutionized manufacturing methods and have made higher quality, standardized products available at lower prices.

The three classifications of manufacturing operations are standard versus custom manufacture, continuous versus batch process, and analytic versus synthetic process.

Once final products are assembled, the transportation section must ship them to customers on time and in good condition. The managers here use one of the five modes of transportation: highway, rail, air, water, and pipeline. Developments such as piggyback service and containerization allow a business to use two or more transportation modes to move shipment over long distances.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Manufacturing Inventories


Manufacturing inventories depend on how much value has been incorporated by the firm:

  1. Raw materials
  2. Components/Subassemblies/Unfinished items
  3. Work-in-process
  4. End items/Finished goods

Raw materials are any inventories by a company which the company has not yet processed in any way. This would include such obvious raw materials as iron ore, sand or glass. However, by definition, it could include computer chips or other expensive items which have not yet been processed.

Components/Subassemblies/Unfinished items have been processed to some extent by the company, but are not yet finished. They may leave production area and be stored off the line, but will still not revert to being called raw material. They already have value added.

Work in process is similar to components, et al. it is actually a mixture of raw materials and components that are currently a part of the production process. So some raw materials may be part of work-in-process, and some components may not be.

Finished goods are simply goods which are finished and ready for sale. They are almost never left in the work area, but are moved out into final storage or packaging.

There is often some ambiguity about classification, since a company may sell some unpainted furniture but paint some for final sale. Is a given unpainted piece to be considered finished goods or not? Perhaps we need a new term for such goods.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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