Operations
Management
Eddy Purnomo

Purpose
Students understand the definition, principles, functions, processes,
models, and objectives of operations management

Definition
Eddy Herjanto (2003;2)
According to Eddy Herjanto, the notion of operational management is a continuous and
effective process in using management functions to integrate various resources
efficiently in order to achieve goals.
Jay Heizer and Barry Render (2005;4)
According to Jay Heizer and Barry Render, the notion of operational management is a
series of activities that produce value in the form of goods and services by converting
inputs into outputs.
Pangestu Subagyo (2000;1)
According to Pangestu Subagyo, the definition of operational management is the
application of management science to regulate all production or operational activities so
that they can be carried out efficiently.

Definition
Fogarty (1989) defines it as a process that continuously and effectively uses
management functions to integrate various resources efficiently in order to achieve
goals
Schroeder (1994) emphasizes 3 (three) things, namely:
[1] Management of organizational functions in producing goods and services,
[2] There is a transformation system that produces goods and services and
[3] Decision making is an important element of operations management

Operations Management
An Activity Related To The Manufacture Of Goods, Services
Or Their Combination Through The Process Of Transforming
Production Resources Into Desired Outputs

Problem Formulation
• Why is operational
management so important?
• What areas of activity require
Operations Management
skills?

• MO is one of the main functions that must exist in all types of
organizations so that if you are going to manage an organization,
inevitably you have to learn the concept of MO.
• By studying MO, we can find out the ins and outs and various things
related to how to produce goods and services
• By studying MO, we can understand and understand correctly what an
operations manager is supposed to do
• Because MO is the most expensive part of the organization, it is very
important to learn. This can be interpreted as the effectiveness and
efficiency of MO will have a major impact on the company
Why is operational management so
important?

• Plant Manager Plant management includes expertise in the fields of production planning, purchasing
management, inventory management, including employee management in the operational department and
management of other resources used in the factory
• Director of Purchashing regarding the purchasing function, the ability to review sales programs, integrate or
create linkages from suppliers to distributors, coordinate operational activities.
• Quality Manager regarding the statistical concept to be able to supervise all operational aspects because
quality is a shared responsibility among all parties involved in the company, especially operational functions.
• Process Improvement Consultants are concerned with process design so that they can provide various
consultations on process improvement for company operations.
• Supply Chain Manager and Planner Responsible for negotiating long-term contracts between companies and
suppliers and distributors so they must have expertise in Material Requirement Planning, Supply Chain
Management, Advanced communication technology in the business world, scheduling and inventory
concepts
What areas of activity require
Operations Management skills?

Operations Management
Principles
 Reality
 Organization
 Fundamentals
 Accountability
 Differences
 Relationship
 Passion for Work
 Humility
 Success
 Change

Operations Management Strategy
Operational management is one of the driving engines of the company.
Since operations managers are involved in many roles and functions, it
is necessary to develop some appropriate strategies to ensure the
smooth execution of obligations and responsibilities.

Operations Management Strategy
Strategy Content
The strategy here is closely related to meeting market needs, as well as taking advantage of
various opportunities for more potential market share. Strategy depends largely on the
company's plan. Still, in the preparation of operational management strategies, there are
several important contents.
Design the process
In this content there are research, forecast, and development activities. Where all these
activities require expertise and energy whose results can last for a long time.
Innovation
It is a process of updating the company's output in order to compete with the times.

Operations Management Strategy
Data usage
It is an important analytical activity for planning, adjustment, and also making the right
decisions.
Supply chain management
Is the management that regulates the company's relationship with manufacturers who supply
raw materials.
Inventory analysis
Is an activity that manages the company's inventory, and divides it in the ABC analysis. The
inventory owned is divided into 3 categories A, B, and C. Category A has the most value and
control, while C has the least.

Operations Management Strategy
Production control
Is an effective and efficient operational management of processes.
Interdepartmental collaboration
Based on a good collaboration and communication system, operational management can
collaborate effectively with finance, marketing, sales, human resources, and other
departments.
Managing human resources
Management that regulates the company's workers, the level of customer satisfaction, as well
as quality control.

Operations Management
Function
Robbins and Coutler (2015), said that there
are 4 management functions, namely:
planning, organizing, leading, and
controlling

Operations Management Function
Planning
A management function that includes defining goals, setting strategies to achieve goals, and
developing work plans to manage activities.
Organizing (Orginizing)
A management function that involves actions to organize and organize various work activities
in a structured manner in order to achieve organizational sasaram.
Leadership
A management function that involves interacting with others to achieve organizational goals.
Controlling
A management function that involves actions – actions to supervise, assess, and correct the
performance and results of work.

Operations Management
Objectives
This management is in charge of
managing all resources owned by the
company. These resources are in the form
of raw materials, workers, machinery, and
other equipment, and ensure the entire
production process runs efficiently and
effectively. Here are the objectives of
operational management.

Operations Management Objectives
Efficiency
• To increase efficiency in the company, namely by maximizing the
output of goods and services with resource inputs at least.
Productivity
• To increase effectiveness within the company by producing the right
goods and services to meet your needs user.
Economy
• To reduce costs in company activities, namely by: minimize the cost
of producing goods and services to be created.

Operations Management Objectives
Quality
• To improve quality within the company by ensuring that
the goods and services produced are in accordance
with AN standards specified quality.
Reduced processing time
• To minimize time wasted on processes Production by
controlling time and making the most of It may be time
used into other activities

Characteristics of Operations
Management
• Have a goal that is to produce goods and services.
• Having an activity is in the transformation process
activities.
• The existence of a mechanism that controls an
operation.

Summary
Operational management is an important system in the company. So the
effectiveness and efficiency of operational management has a major
impact on the company. This management system has a role to make the
products produced according to predetermined operating standards. The
resulting product must also be able to satisfy consumer needs.
Another thing that must be considered in operational management is a
transparent and efficient financial recording process. Good financial
records make all business plans run optimally. Financial statements will
take place optimally because all reports are presented according to
existing reality.

Summary
A business with good bookkeeping will facilitate financial control. Both
finances are included in income, and expenses. The company's capital
will also be seen whether it is used according to planning or not. In
addition, it will be able to control the company's expenses, especially in
terms of raw material and production costs. To support management,
capable technological resources are needed.
Operational management is needed so that the company can develop
optimally. Enrichment of the supervision system of various departments
in business must be carried out by this management system.

Summary
Operational management is an application of management science that
aims to regulate all company activities to run effectively. This
management must contain a management system and must be carried
out based on its functions. Without operational management, it is feared
that all elements supporting the company's activities cannot run properly.

Bibliography
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