To enable the Operations manager to make good decisions, there is a need for long term forecasts (more than 5 years) and short-term sales forecasts (12 moths)
Long -term market forecast - is usually outside the purview of the Operations. The forecast of carried out by Marketing staff and backed by economic, political, social and technological data. The forecast may take the form of a statement of anticipated output in volume and monetary form. It is from this forecast that the organization must contemplate capital expenditures such as erecting new buildings to support increased volumes or changing out equipment owing to obsolescence of current technologies.
Short-term sales forecast - is the basis from which much of the transformation activity stems. It is a prediction covering the next budget period (usually 12 months) of:
-Products/services to be sold (detailed breakdown)
-The prices which the market can bear
-Quantity, quality and reliability expectations of each product
-Required delivery dates
While recognizing the POM is a system within a system, it is worthwhile to reiterate that this function has characteristics that distinguish itself from other functions within the organization. POM employs the bulk of the staff, utilizes the bulk of physical assets, requires the bulk of financial resources and is made of many sub-systems in the organization. Thus, there is a need to develop and operate POM management system. The task is never easy, as it has to deal with multi-faceted functions within the organization.
A proposal to help develop a system for POM is to combine the four considerations (strength and weakness of the enterprise, opportunities and threats offered to the enterprises) and the five Ps (product, plant, processes, programs and people).
The Operations managers' job is both exciting and challenging. On a daily basis, he or she has to deal with problems that are multi-faceted in nature. As the operations manager controls the bulk of the organization's physical and personnel resources, problems are aplenty and must be resolved timely. Usually, decisions can be segregated as programmable (routine and positive) or non-programmable (unstructured and often involved people).
Clearly, the more decisions that can be programmed, the more time the Operations manager can make time available dealing with the non-programmable problems which are frequently the most important and subtle. Systems and procedures should be developed to better manage the programmable ones.
The 5 PS:
A good framework for examining the POM function is the 5Ps.
The product is the most obvious embodiment of the interface between production and marketing. It is not good enough if there is a demand for products; the firm must be able to produce it.
Further to that, there must be consensus on attributes such as:
-Quality and reliability
In managing the above attributes, the organization must also examine the external and internal factors such that it will be in sync with the overall corporate strategy of the organization. For example, if the firm opts to satisfy customers' request for customization, there must be conscious awareness that there will be trade-off within the production process.
To manufacture products, we need building and equipment. Usually, the plant accounts for the bulk of the fixed assets of a firm. It must match the needs of the products, market, operating staff and the organization. This need should be a long-term one. Another consideration is one that relates to the environment. Business decisions concerning plant must be considered in conjunction with the financial, fiscal, political and cultural constraints imposed by the environment within which the business is carried out.
Operations management is concerned about:
-Future possible demands...
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