Edward J. Anderson

In business, operations management is the development, execution, and maintenance of effective processes — whether used continuously for the production and delivery of goods or services or for the one-time execution of a major project. Some mathematical formulas come in handy to keep business operations running as smoothly as possible, from managing inventory to estimating the time and cost of a special project.

What’s currently called operations management evolved from a long line of discoveries, inventions, and revolutions. You may find it hard to believe that there was a time when products weren’t mass-produced and available on command. If a person wanted something, she had to make it or persuade someone to make it for her.

Companies spend a lot of time and resources on process improvement projects that fail to produce the desired results in operations management. A primary reason that many projects fall short of expectations is because they fail to follow a structured approach. Documenting where a process has been and where it needs to go provides a road map — with directions — that can save an enormous amount of time and resources that may otherwise be wasted on dead ends and cul-de-sacs.

Planning for an operations management project can be a process, and like all processes, it benefits from standardization and discipline. A successful project rests on three legs, much like a stool. It needs Good processes to ensure that the appropriate actions are taken in the right sequence The right people working on the project Appropriate communication among project participants The phases of the cycle The purpose of a project plan is to translate goals into objectives and results.

Point forecasts, or single-number predictions of demand, are generally always incorrect. You want an accurate forecast to inform your operations management. That’s why you need not only an expected value (what you think demand will be) but also a measure of your method’s forecasting error. Here are the fundamental tenets of forecasting: Aggregated forecasts are more accurate than disaggregated forecasts.

Processes fall into four different categories for operations management based on the nature of their function. Some processes relate primarily to a product’s cost structure; others address the company’s product standardization needs, output volume, or production flexibility. Take a look at processes that focus on these types of business considerations and review general guidelines on how to best select a process to meet the requirements of your product.

All quality management and improvement movements share the same basic foundation, regardless of what your company calls its quality program (some companies spend more time coming up with clever names for the program than actually implementing it). This foundation is built on continuous improvement and statistical analysis.

Risk is a situation involving exposure to danger. Let’s face it: In life, risk is everywhere. In business, there are several types of risks you should be aware of and actions you can take to prevent the danger or protect yourself from it. Types of business risk As an operations manager, you’re likely to encounter the following risks, which can prove devastating to your business.