Operations company to illustrate a service organization’s operations

Operations management is the management function that is responsible for planning, controllingand coordinating the resources needed in the production of goods and service. It is that functionof management that deals with the core capabilities of an organization.

Morash, (2001) definesoperations management as that function of an organization that is concerned with the design,planning and control of resources for the production of goods or provision of services. Itencompasses the management of systems or processes that create goods and/or provideservices. The scope of operations management ranges across the organization. Operations managementpeople are involved in product and service design, process selection, selection and managementof technology, design of work systems, location planning, facilities planning, and qualityimprovement of the organization’s products or services.

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The operations function includes many interrelated activities, such as forecasting, capacityplanning, scheduling, managing inventories, assuring quality, motivating employees, decidingwhere to locate facilities, and more.We can use an airline company to illustrate a service organization’s operations system.The system consists of the airplanes, airport facilities, and maintenance facilities, sometimesspread out over a wide territory. The activities include:Forecasting such things as weather and landing conditions, seat demand for flights, andthe growth in air travel.

Capacity planning, essential for the airline to maintain cash flow and make a reasonableprofit. (Too few or too many planes, or even the right number of planes but in the wrongplaces, will hurt profits.)Facilities and layout, important in achieving effective use of workers and equipment.Scheduling of planes for flights and for routine maintenance; scheduling of pilots andflight attendants; and scheduling of ground crews, counter staff, and baggage handlers.Managing inventories of such items as foods and beverages, first-aid equipment, inflightmagazines, pillows and blankets, and life preservers.Assuring quality, essential in flying and maintenance operations, where the emphasis is onsafety, and important in dealing with customers at ticket counters, check-in, telephone andelectronic reservations, and curb service, where the emphasis is on efficiency and courtesy.Motivating and training employees in all phases of operations.Locating facilities according to managers’ decisions on which cities to provide servicefor, where to locate maintenance facilities, and where to locate major and minor hubs.


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