Overview

Operations management converts inputs—labor, materials, capital—into goods and services. Productivity measures this conversion efficiency. Managers use forecasting, capacity planning, scheduling, and inventory control to optimize cost, quality, and delivery.

Key Concepts and Tools

• Process Design: Flowcharts, value‑stream mapping, bottleneck analysis.
• Capacity Planning: Design vs. effective capacity; break‑even analysis.
• Scheduling Techniques: Gantt charts, PERT/CPM critical path, finite loading.
• Inventory Management: EOQ formula, reorder point, ABC classification, Just‑in‑Time (JIT) / Kanban.
• Productivity Metrics: Partial (output ÷ labor hours) vs. multifactor productivity.
• Lean Principles: Eliminate waste (muda), 5S, continuous flow.
• Quality Programs: ISO 9001, Six Sigma DMAIC, Kaizen events.

Step-by-Step Example

Scenario: A factory’s bottling line outputs 7,200 bottles per shift. Demand is 9,000. How can managers close the gap?

Step 1 – Bottleneck ID: Time‑study shows the labeler runs at 60 bottles/min, while filler handles 90 bottles/min. Labeler is bottleneck.

Step 2 – Options: (a) Add parallel labeler ($25 k), (b) Reduce downtime via SMED changeover, (c) Increase line speed to 70 bpm with minor tweak.

Step 3 – Cost–Benefit: Tweaking motor ($3 k) boosts capacity 17 % to ~8,400 bottles—still short. Parallel labeler meets demand and adds redundancy.

Final Answer: Invest $25 k in a second labeler; new capacity ≈ 12,000 bottles, providing 33 % headroom for growth.

Quick Tip