What is Operations Management? | Rowtons Training by Laurence Gartside

Summary

Laurence Gartside from Rowtons Training demystifies operations management, highlighting its role in orchestrating the processes behind an organization's core products and services. The video explains how operations managers oversee daily activities, transforming inputs into valuable outputs across various industries. It covers key operational functions like demand forecasting, capacity planning, and performance management, emphasizing the discipline's importance in aligning operational strategy with business objectives for competitive advantage.

Takeaways

• 🔧 Operations management is the discipline that oversees the processes and activities involved in creating and delivering an organization's core products and services.
• 🛠️ Business operations encompass the daily activities necessary for an organization to create value and generate profit, functioning alongside other departments like marketing and finance.
• 🚀 Operations are about 'doing': making, helping, and delivering the real work that satisfies customer needs.
• ⛏️ Examples of operations include a coal mine extracting coal, an airline transporting passengers, a restaurant serving food, and a digital marketing agency creating content.
• 🔄 The transformation of inputs like labor, machinery, materials, and expertise into higher value outputs is a key function of operations.
• 📈 Operations management involves coordinating resources, forecasting demand, capacity planning, and demand management to ensure efficient operations.
• 📊 Scheduling is a critical part of operations management, involving planning and decision-making regarding job sequences and responding to disruptions.
• 📝 Resource requirements planning is essential for operations, akin to planning a dinner party with guests, dietary needs, shopping lists, and preparation timelines.
• 🏭 Operations management is crucial from the initial design phase of a business, including equipment, staffing, layout, and processes to meet delivery goals and quality standards.
• 📊 Performance management in operations involves setting metrics, collecting data, analyzing, and acting on it to improve and track operational efficiency.
• 🌟 Effective operations management is about creating value by designing and running systems and processes that are both effective and efficient.

Q & A

What is operations management?

Operations management is the discipline of managing the activities and processes that create and deliver an organization's core products and services.

Who is Laurence Gartside and what does he do?

Laurence Gartside is a professional who provides online training and consultation in business operations management through his site, Rowtons Training.

What are business operations?

Business operations are the core daily activities that an organization performs to create value and earn a profit, alongside other primary functions like marketing or finance.

How do operations transform inputs into outputs?

Operations transform inputs such as labor, machinery, materials, energy, and expertise into higher value outputs, such as coal from a mine or passengers transported by an airline.

What are the fundamental challenges faced by operations managers?

Operations managers face challenges like designing, planning, running, and improving systems, coordinating input resources, forecasting demand, capacity planning, demand management, scheduling, and resource requirements planning.

What is capacity planning in operations management?

Capacity planning is the act of making long-term decisions about what the organization wants to be capable of delivering in terms of products or services, both in the short term and far into the future.

How does demand management differ from other aspects of operations management?

Demand management involves actively influencing and shaping demand to keep it within the organization's capabilities, ensuring a regular flow of work that can be efficiently delivered.

What is the role of scheduling in operations management?

Scheduling in operations management involves making plans and decisions about when and in what sequence jobs should be done, addressing daily disruptions and urgent changes, as well as strategic decisions for delivery objectives.

Why is resource requirements planning important?

Resource requirements planning is crucial for ensuring that all necessary resources, such as staff, materials, and equipment, are available and ready when needed to meet operational demands.

How does operations management contribute to the strategic alignment of a business?

Operations management contributes to strategic alignment by ensuring that the operations strategy supports the overall business strategy, potentially offering a competitive edge through lowest cost, fastest delivery, or highest level of customization.

What is performance management in the context of operations management?

Performance management in operations management involves designing metrics, collecting data, analyzing, and acting on it to understand what is working well and identify areas for improvement, tracking progress over time.

Outlines

00:00

🔧 Operations Management: The Backbone of Business

Operations management is the critical function that oversees the activities and processes responsible for creating and delivering an organization's core products and services. It is a discipline that often operates behind the scenes but is essential to the success of any business. The paragraph introduces Laurence Gartside, an expert in business operations management, who explains that operations managers are involved in the design, planning, execution, and improvement of systems that transform inputs into valuable outputs. They coordinate resources, forecast demand, manage capacity, influence demand, schedule jobs, and plan resource requirements. The analogy of a dinner party is used to illustrate the complexity of operations management, highlighting the need for careful planning and coordination to ensure efficiency and effectiveness.

05:01

🏭 Operations Management: From Strategy to Performance

This paragraph delves into the strategic role of operations management, emphasizing its importance in the planning and design phase of a business, such as a factory or restaurant. It discusses how operations management aligns with the overall business strategy to provide a competitive edge, whether through cost efficiency, speed of delivery, or customization. The paragraph also touches on performance management within operations, which involves setting metrics, collecting data, and analyzing performance to identify areas for improvement. The summary concludes with an invitation for viewers to engage with the content further, through likes, subscriptions, and comments, and to explore more resources on the topic.

Keywords

💡Operations Management

Operations Management refers to the planning, organizing, and supervising of the production and delivery of goods and services in an organization. It is a critical function that involves the management of resources, processes, and systems to ensure efficiency and effectiveness in meeting customer needs. In the video, it is described as the discipline responsible for managing the activities and processes that create and deliver an organization's core products and services, highlighting its importance in the success of various businesses.

💡Core Products and Services

Core products and services are the primary offerings of an organization that define its business and generate revenue. They are the result of the operations management process, where inputs are transformed into higher value outputs. The video uses examples such as coal mining, airline transportation, and restaurant services to illustrate how operations management turns inputs like labor and materials into these core offerings that customers value and pay for.

💡Value Creation

Value creation in operations management is the process of transforming inputs into outputs that are more valuable to the customer. It involves adding value to the products or services being offered, which is essential for an organization's profitability and customer satisfaction. The video explains how operations managers design systems that take inputs like labor, machinery, and materials and turn them into products or services that customers are willing to pay more for, thus creating value.

💡Capacity Planning

Capacity planning is the act of making long-term decisions about the level of output an organization aims to achieve. It is closely linked to operations management as it involves determining the resources needed to meet future demand. In the video, capacity planning is discussed in the context of deciding what capabilities an organization should have to deliver products or services at a certain quality level and output rate, both in the short term and over the next five to ten years.

💡Demand Management

Demand management is about actively influencing and shaping the demand for an organization's products or services to ensure it aligns with the organization's capabilities. It helps in maintaining a regular flow of work that can be efficiently delivered. The video describes how operations managers use demand management to keep the workload within their capabilities and to smooth out fluctuations, ensuring a steady and efficient operation.

💡Scheduling

Scheduling in operations management involves making plans and decisions about when and in what sequence jobs should be done. It is crucial for reacting to daily disruptions and urgent changes while also aligning with strategic delivery objectives. The video uses the analogy of planning a dinner party to explain scheduling, emphasizing the need to coordinate tasks and resources to meet deadlines and customer expectations.

💡Resource Requirements Planning

Resource Requirements Planning (RRP) is the process of determining the resources needed to execute operations effectively. It includes identifying the types and quantities of resources, such as labor, materials, and equipment, required to meet production goals. The video humorously compares RRP to planning a dinner party, highlighting the importance of having the right ingredients and supplies available at the right time to ensure a successful event.

💡Performance Management

Performance management in operations management involves designing metrics, collecting data, analyzing performance, and acting on the insights to improve operations. It is essential for understanding what is working well and what needs improvement. The video emphasizes the role of performance management in operations by describing how operations managers use it to track progress, identify areas for improvement, and ensure that operations are running efficiently and effectively.

💡Strategic Alignment

Strategic alignment in operations management refers to ensuring that the operations strategy supports and aligns with the overall business strategy. This alignment helps an organization to achieve a competitive edge, whether through the lowest cost, fastest delivery, or highest level of customization. The video discusses how operations management is essential in designing systems that not only meet production needs but also support the broader strategic goals of the business.

💡Competitive Edge

A competitive edge refers to the advantages that an organization has over its competitors, which can be achieved through various means such as cost leadership, product differentiation, or operational excellence. In the context of operations management, having a competitive edge often means being able to deliver products or services more efficiently, at a lower cost, or with higher quality. The video mentions that operations management plays a critical role in aligning operations strategy with the overall business strategy to offer a winning competitive edge.

💡Efficiency and Effectiveness

Efficiency and effectiveness are key outcomes sought in operations management. Efficiency refers to doing things right, minimizing waste, and optimizing resource use, while effectiveness is about doing the right things, ensuring that operations align with organizational goals and customer needs. The video underscores the importance of operations management in designing and running systems that are both efficient, by using resources wisely, and effective, by meeting customer expectations and organizational objectives.

Highlights

Operations management is crucial for managing the activities and processes that create and deliver an organization's core products and services.

Laurence Gartside provides online training and consults in business operations management through Rowtons Training.

Business operations are the core daily activities that create value and earn a profit.

Operations are one of the primary functions of any organization, alongside marketing and finance.

Operations involve the 'doing' aspect of a business, including making, helping, and delivering.

Examples of operations include a coal mine, an airline, a restaurant, and a digital marketing agency.

Operations transform inputs like labor, machinery, and materials into higher value outputs.

Operations managers design, plan, run, and improve systems that transform inputs into valuable outputs.

Operations management involves coordinating input resources to be ready where and when they are needed.

Forecasting future demand is essential for making decisions on labor, space, materials, and other resources.

Capacity planning involves making long-term decisions on what the organization wants to be capable of delivering.

Demand management is about actively influencing and smoothing demand to keep a regular flow of work.

Scheduling involves making plans and decisions about when and in what sequence jobs should be done.

Resource requirements planning is crucial for ensuring all necessary resources are available for operations.

Operations management is involved in the design of systems and processes before a factory or restaurant is even built.

Performance management in operations involves designing metrics, collecting data, and analyzing performance.

Operations management aims to create value by designing and running effective and efficient systems and processes.

Rowtons Training offers courses on operations management, supply chain, logistics, inventory, and performance improvement.

Transcripts

Operations management is about managing  the activities and processes that create  

and deliver an organization's core products and  services. But what is this mysterious discipline?  

And what do these people do who often behind the  scenes are responsible for basically everything  

that gets made or done in the world? Hi, I'm  Laurence Gartside I give online training and  

consults in business operations management  through my site, rowtons training helping you  

level up your business operations fundamentals. If  operations managers manage operations then first  

what are they? Business operations are the core  daily activities that an organization does every  

day to create value and earn a profit. It's one  of the primary functions or departments of any  

organization alongside the likes of marketing  or finance. Operations are the doing, making,  

helping, delivering the real work that creates and  provides what the customer wants. From a coal mine  

digging up coal, an airline transporting people,  a restaurant cooking food and serving customers,  

a digital marketing agency doing its  graphic design and setting up ad campaigns.  

The operations are the core activities of those  businesses, the systems that transform inputs into  

higher value outputs. The coal mine has inputs of  labor, machinery, materials, energy, expertise and  

transforms it into coal in lorries which is much  more valuable than coal in a mountain. An airline  

also has inputs of labor, machinery, planes,  materials, energy and expertise and transforms  

people who are in one city to people who will  pay to be in another city. The marketing agency  

still uses machines mostly just laptops and also  labor, energy, and expertise and creates graphics  

and Instagram news feeds that their clients pay  handsomely for. Is this really so different from  

a factory with inputs of labor, machines, energy,  materials expertise and transforms them into other  

objects that customers will pay more for than  the inputs that went in. For the operations  

managers in each of these organizations so  many of the fundamental challenges are the  

same. Operations managers design, plan, run and  improve these systems. Operations management  

involves coordinating the input resources  to be ready where and when they are needed,  

forecasting of future demand to allow decisions  on how much labour space materials are needed.  

Capacity planning is closely linked and is  the act of making longer-term decisions of  

what the organization wants to be capable of  delivering both next week but also five or  

ten years into the future. Demand management  is about actively influencing your demand,  

keeping it within your capabilities, smoothing  it to keep a regular flow of work that can be  

efficiently delivered. Scheduling is making  plans and decisions about when and in what  

sequence jobs should be done both reacting  to the daily disruptions and urgent changes  

but also strategic decisions for what delivery  objectives the business wants to be optimized for.  

Then you've got resource requirements planning,  oh yeah, that's my go-to dinner party topic  

but Hey no resource requirements planning and  there won't be a dinner party. How many guests  

special dietary requirements, shopping lists made,  well-timed supermarket runs to have nice fresh  

ingredients, chopping and preparing done well  ahead of time and being familiar with the recipe  

to plan when everything has to be in the oven  so that it's ready right on time for dinner.  

See? There's more operations managers out there  than you thought. Scale that up to a restaurant  

of 10 staff, a hundred different ingredients  having to be bought stored prepared and  

cooked for a hundred customers served lunch and  dinner each day or a 50 million dollar factory,  

500 staff and a few hundred million dollars of  goods per year flowing through all being prepared  

to a tight schedule and you're getting some of the  essence of what the Operations Managers are up to.  

Before the factory or restaurant even  gets built operations management is  

the essential discipline to design the  system, what equipment staffing layout  

processes will be required to be able to deliver  a certain set of capabilities, a certain capacity  

at a desired quality level within a certain output  rate how should the operations strategy align with  

the overall business strategy to offer a business  winning competitive edge perhaps through lowest  

cost or fastest delivery or by having the highest  level of customization to the product or service  

and then, once everything is up and running how  do we know if we're doing a good job? Operations  

management involves performance management,  designing essential metrics, collecting relevant  

data, analyzing, presenting, sharing and acting on  it to understand what is and isn't working well,  

identify improvements and track progress.  Operations management is about getting stuff  

done, designing and running effective and  efficient systems and processes to create  

value for the world. Thank you for watching this  video, please remember to thumbs up, subscribe,  

ring the bell and share your insights below.  And, if you want to learn more about Operations  

Management, Supply chain, logistics, inventory,  performance improvement, well, watch my next video  

or check out my library of courses on my site  rowtonstraining.com. All right then, crack on!