In this post, I’d like to talk about manufacturing operations management and how to make it more effective.
Of course, this is critical in order to keep your company profitable and growing.
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What exactly is manufacturing operations management, and what are its advantages?
The term “manufacturing operations management” refers to the tools and methods used to optimize production. This includes managing business resources such as people, technology, and equipment, as well as other resources that improve plant efficiency and productivity.
Manufacturing operations management ensures that physical equipment and business user interfaces work together to benefit the company.
Manufacturing systems provide a platform for combining human and automated activities in real time.
Every organization, whether it manufactures goods or provides services, views work as an activity that must be completed in order to provide quality products to customers.
To compete with other organizations, businesses must be able to convert resources (materials, labor, money, and information) into goods or services as efficiently as possible.
The top-level executives in charge of this transformation are known as operations managers.
All activities involved in transforming product ideas into finished products, as well as those involved in planning and controlling the systems that produce goods and services, fall under the purview of operations management.
To put it another way, the operations manager oversees the processes that convert inputs into outputs.
Essentially, all producers perform the same basic function: converting raw materials into finished goods.
Manufacturers must constantly strive to improve their operational efficiency in order to perform this function in today’s business environment.
They must improve their manufacturing processes to focus on quality, reduce material and labor costs, and eliminate any costs that do not add value to the finished product.
The operations manager is in charge of making the decisions necessary to achieve these objectives.
The following are the person’s responsibilities:
- Production planning. Operations managers determine how goods will be produced, where production will take place, and how manufacturing facilities will be laid out during production planning.
- Production control. Following the completion of the manufacturing process, managers must continue to schedule and monitor these activities. They should solicit and respond to feedback, and make adjustments as needed. They are also in charge of raw material purchases and inventory management at this stage.
- Quality control. Finally, the operations manager is directly involved in ensuring that goods are manufactured in accordance with specifications and that quality standards are met.
Let us now observe each of these responsibilities in greater detail.
Production process planning
Decisions made during the planning stage have long-term consequences and are critical to the company’s success.
Before making a decision about the operations process, the operations manager should consider the marketing manager’s objectives.
Is the company’s goal to be a low-cost, price-competitive manufacturer?
Or does the company intend to prioritize quality and target the high-end market? Perhaps you want to establish a reputation as a company that produces a high-quality product.
What if the company intends to sell a wide range of goods?
All of these choices will entail trade-offs.
Maintaining a company’s reputation for dependability does not always imply offering a diverse range of products.
Low cost does not always equate to high quality.
With these considerations in mind, let’s look at the specific types of decisions that must be made during the production planning process.
These decisions are classified as production method decisions, site selection decisions, facility layout decisions, and component and material management decisions.
Decisions on production methods
The first step in production planning is determining which type of manufacturing process is best for producing the item your company wishes to manufacture.
To make this decision, you will need to answer the following questions:
- How many inputs do I receive from a specific customer before manufacturing my product?
- Do I produce one-of-a-kind items solely based on customer specifications, or do I produce standard, high-volume items for later sale?
- Do I give customers the option of “customizing” standard items to meet their unique requirements?
One approach is to compare three basic types of processes or methods: make-to-order, mass production, and mass customization.
The operations manager’s job is to collaborate with other managers, particularly marketers, to determine which processes best meet the needs of the company’s customers.
Make to order
Most consumer goods, such as furniture and clothing, were once made by individuals who practiced various crafts.
Products, by definition, are customized to meet the needs of the buyers who order them.
This process, known as the make-to-order strategy, is still widely used by businesses such as printers or similar shops that produce low-volume and varied goods based on the customer’s specifications.
However, in the early twentieth century, a new concept of producing goods, namely mass production, was introduced (or make-to-stock strategy).
It is the practice of mass producing identical goods at a low enough cost to set the price at which they are sold to a large number of customers.
Goods are manufactured in anticipation of future demand (using forecasts) and stored in inventory for later sale.
This method works well for a wide range of standard goods, from processed foods to electronics.
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However, there are some drawbacks to mass production. Customers, therefore, cannot “do it their way.”
When they come off the assembly line, they must accept standard products.
However, more and more customers are looking for products that are designed to accommodate individual tastes or needs while remaining reasonably priced.
To meet these consumer demands, many businesses have adopted a new strategy known as mass customization, which combines the benefits of customized products with mass production.
This approach necessitates the company interacting with the customer to determine exactly what the customer wants, and then manufacturing those goods using cost-effective production methods.
One effective method is to mass produce the product up to a certain point and then adapt it to meet the needs of different customers.
The number of businesses that devote at least a portion of their operations to mass customization is growing.
Nike is one of the most well-known mass customizations, having achieved success by allowing customers to customize their own shoes, clothing, and athletic equipment through the Nike iD program.
The rise of mass customization has a lot to do with the internet.
Levi’s, for example, enables a woman to find the right pair of jeans by first identifying her “curve” type: slight (straight), demi (balanced), bold, and supreme.
Oakley provides personalized sunglasses, glasses, watches, and backpacks.
While Mars, Inc. can produce M&Ms in any color desired by the customer (for example, school colors), it could also add text or images to the candy.
Obviously, mass customization does not work for all goods.
Most people are unconcerned about detergents or specialty paper products such as tissue, for example.
Whereas many of us who like the idea of custom Levi’s, Nike, or Oakley clothing, footwear, or sunglasses don’t want to pay more than they do.
Following the selection of the best manufacturing process, the operations manager must determine where the product will be manufactured, the size of the manufacturing facility, and the layout of the facility.
Selecting a Location
Managers must consider several factors when deciding on a location:
- To reduce shipping costs, both for raw materials entering the factory and finished goods leaving the factory, locate factories near suppliers, customers, or both.
- Factories are typically located in areas with a high concentration of skilled workers.
- People naturally prefer locations where they and their families will enjoy life.
- They seek locations with favorable business climates, where, for example, local governments may offer financial incentives (such as tax breaks) to entice them to do business in their area.
In fact, you will rarely find a manufacturing location that meets all of these criteria.
As a general rule, you should identify the most important criteria and strive to meet them.
Assume you choose a location for your manufacturing facility that meets three critical criteria: (1) close to the company’s suppliers location, (2) availability of skilled engineers and technicians, and (3) favorable living conditions.
These considerations are more important than operating in low-cost areas or receiving financial incentives from local governments.
Customer engagement is also unimportant because your products are distributed globally.
That sort of thing.
Now that you’ve determined where you’ll locate your facility, you must decide how much product you’ll produce.
You begin by estimating the demand for your product. And forecasting is not an easy task.
To estimate the number of units you are likely to sell over a given time period, you must first understand the industry and estimate your likely market share by reviewing industry data and conducting various other types of research.
After estimating your product’s demand, you can calculate the capacity requirements of your manufacturing facility, which is the maximum number of items you can produce in a given time under normal working conditions.
After calculating your capacity requirements, you can determine how much investment in plant and equipment you’ll need to make, as well as how many man-hours the plant will need to produce at capacity.
Capacity planning, like forecasting, is difficult.
Unfortunately, failing to balance projected capacity and demand can be extremely costly.
If you set your capacity too low (making less than you should), you won’t be able to keep up with demand, and you’ll lose sales and customers as a result.
Setting capacity too high (and producing more units than necessary) wastes resources and raises operating costs.
Advantages of operations management
Now the question is, what will you gain from effective operations management?
Let’s see what happens.
Provide your company with a competitive advantage
Managing your company’s operations allows you to deal with critical internal and external factors.
Internal factors such as intellectual capital, operating policies, and average attrition rate are among the most important. Externally, the goal is to boost competitiveness.
Increase your profitability
Managers will have more time to generate new ideas and put them into action to increase company sales when operations run smoothly.
Monitoring your income and expenses becomes easier when you have an experienced manager.
In the long run, your total income rises.
It will be easier to understand your income if your company’s profitability is well managed.
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Product quality improvement
Operations management allows you to improve the efficiency with which you produce goods.
You can also improve the storage of your raw materials.
The benefit of this is that you can, of course, minimize damage and thus losses.
Manufacturing operations management entails utilizing useful tools such as warehouse management software, production software, defect trackers, and process re-engineering programs. All of these tools will assist you in increasing your facility’s efficiency.
Make sure you comply with government regulations
By managing your company’s operations, each department head is responsible for ensuring that all tasks delegated to him are carried out legally.
This protects your company from potential government fines and difficult regulatory decisions.
Increase customer satisfaction
To meet customer expectations, you must implement a quality management program that will help you maintain high standards while also ensuring efficiency.
When customer expectations are met, satisfaction levels can rise. Customer retention is higher, and they are more likely to recommend your company to their friends and family.
Contributes to waste reduction
Another advantage of using manufacturing operations management is the implementation of manufacturing systems that help in the reduction of waste production.
These systems frequently include inventory management functions to help control inventory and, as a result, reduce potential production problems caused by a lack of stock.
Investing in this type of management system aids in the reduction of inventory storage space as well as the increase of accuracy.
Manufacturing operations management necessitates the collaboration of various departments in order to produce high-quality products.
This increases business productivity and helps you meet your customers’ expectations.
Make use of cutting-edge technology to assist your company in meeting its stated goals and objectives.
You must also ensure that your system is operational by employing statistical control methods on a regular basis.
How to manage manufacturing operations effectively?
There are numerous approaches to effectively managing manufacturing operations.
You must consider a variety of factors to ensure that you are doing everything correctly and that you are not wasting time or money.
If your manufacturing process fails, you may encounter problems and complications throughout the process.
If you don’t handle these issues properly, they can become very serious. As a result, you must devote some time to ensuring that your business runs smoothly.
Let’s take a look at what you can do to manage your manufacturing operations more effectively.
Leveraging business intelligence
The data gathered during the process provides a comprehensive level of data referred to as business or manufacturing intelligence.
This can be used to improve the overall operations of the company as well as the supply chain.
Analytical software can compare your facilities and suppliers and identify areas for improvement.
For example, if one facility runs the process more efficiently than the other, despite the fact that both are running the same process.
Examining the data collected from both locations can assist managers and technicians in determining the cause of the first plant’s delays.
Improved data logging options can assist operators in collecting the type of data on which business intelligence packages rely.
Make use of the network to connect supply chain links
It is difficult to track global supply chains.
It may be nearly impossible for a company with dozens of facilities and suppliers all over the world to keep track of everything.
Companies can ensure that operators and Quality Assurance (QA) inspectors can review information stored in a single database by using even the most basic network protocols.
Businesses that use a simple cloud-based system may find it to be the most adaptable.
Because of the inherent platform independence of this method, it is frequently accessible from any device.
Manufacturers who are concerned about the use of tools that almost anyone can access should consider the live data logging technology used in the required manufacturing equipment.
This feature saves data to a Google Sheets document, which employees can access from any device with a modern browser.
Pay attention to waste bin
In today’s economy, one of the most significant unneeded expenses is waste material.
Because of the increased emphasis on environmental conservation, this can also become a major homeworks issue if customers notice that businesses are wasting large amounts of material.
Examine each process to determine which produces the most waste and what steps you can take to reduce or eliminate this waste.
Again, precise measurement and data recording can be extremely beneficial in this regard.
If the operator notices that the container has significantly more or less substance than it should, there may be a serious waste problem somewhere along the drain.
This is especially true in the semiconductor industry, where defects can quickly accumulate.
Never be afraid to identify problems
While the previous tips focused on immediate changes that managers can make, this step may be more esoteric (understood by a small group of people with special knowledge or interest), despite its apparent simplicity.
People who truly believe in the concept of business processes frequently describe a problem as a break in the supply chain.
The chain will break if too many links are broken.
Don’t be afraid to admit when you have a problem and to fix it right away.
Consider categorizing a company’s weaknesses into one of the three levels listed below:
- The business process itself
- Individual employee performance
- The organizational structure that holds everything together
Once your problem has been identified, you must document it and deal with it.
Waiting will only make the situation worse. And this can lead to more costly mistakes.
That’s not something you want to happen, is it?
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Putting in place a work order ticketing system
Analyzing the issue only informs the manager that something is wrong.
Implement a work order issuance system so that employees who encounter issues can resolve them as soon as possible.
Knowing that the industrial scale needs to be replaced with more modern digital systems is only half the battle.
Managers must take the initiative and have the resources to implement changes as soon as possible.
If this type of tactical action does not already exist, the problem will only worsen, because protocols and solutions can be a time-consuming effort.
With new hardware, you can improve business processes
Providing new tools to employees may be the quickest way for managers to overhaul manufacturing processes.
Many businesses put off installing critical updates for far too long.
As the company grows, it is best to find a manufacturer direct from the factory who can work with each company’s unique situation to find a solution that meets their needs.
Remember to recognize and prevent problems. As a result, you can then consider the existing data and waste to devise a better process.
Assure high-quality products
Make sure you have products that are worth shipping so that you can manage your manufacturing operations more effectively.
Confirm that the product is operating properly and that there are no defects in the material.
This will enable you to create more products to sell while maintaining a healthy profit margin.
Assure high-quality equipment
Take a look at the equipment you’re using to make your product. 3D printers, cutting and packaging machines, tractors, sewing machines, trailers, and forklifts are just a few examples.
Check the following items in your manufacturing equipment:
- Maintenance schedule
- Repairs needed
- Parts that need to be replaced
- Stock and inventory of spare parts
Understand how to make the most of your resources
Make the most of your available resources.
Your budget is probably tight, and you don’t want to squander as many of your resources as possible.
Determine whether your factory’s by-products can be recycled or reused.
Consider technological advancements
Identify any technological advancements that your employees can use to improve operations.
The more efficient your manufacturing facility is, the better it will be for the customer.
If you believe there are areas that could be improved, you must investigate them and make changes to ensure that they work best for everyone.
Here are some examples of manufacturing-related technological advances:
- Automated systems: The introduction of automated systems using software programs is one of the most important aspects of technological progress in manufacturing. The software can be installed either remotely or physically, and the hardware can be assembled on-site at the factory. In terms of hardware, these devices may be installed on equipment with the assistance of individuals or companies that supply parts.
- Industrial robots: Industrial robots are specially designed to perform all tasks related to a specific process or product, rather than just the actual manufacturing process. These machines can handle multiple tasks at once, reducing the amount of labor required for a production process. This raises the level of output from the same number of jobs.
- Management software: You should also consider how project management software can help you reduce the number of management tasks you have to handle on a daily basis. This is especially important for small manufacturing firms with a few employees. This can help reduce the amount of money you need to invest in your company while also increasing overall operational efficiency.
- Other manufacturing technological advances include prototyping or manufacturing miniature samples of products prior to mass production, laser technology, 3D imaging, and metal fabrication.
Check your customer service
Ensure that you provide the best customer service to customers.
This will allow you to gain more clients and sales, resulting in a higher profit.
You could try providing chat support on your website in addition to phone support.
Email forms or self-help tools, such as FAQ sections, are also effective ways to assist your customers.
Consider ways to reduce waste
As previously stated, you should also consider ways to reduce waste in your manufacturing process.
You must ensure that you are not wasting your valuable time or money on things that will not contribute to the final product.
Industrial waste can be reduced by finding efficient ways to recycle or reuse it, such as using it as fertilizer or as an alternative fuel source in your manufacturing facility.
Assessing your quality control production processes, such as how your products are manufactured, will be necessary for effective management of your manufacturing operations.
This also includes reviewing your customer service, finding ways to reduce waste, and keeping up with technological advancements.
You should also consider how to handle these management tasks efficiently so that the efficiency and overall quality of the products you produce do not suffer.
You can gain more control over your manufacturing processes by incorporating automated systems into your facilities.
I hope you find it useful!
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