Basics of Operations Management Henri Fayol

 Operations management is a field of Also known as the

business concerned with the father of modern
administration of business practices management theory
to maximize efficiency within an gave a new perception
organization. of the concept
 It involves planning, organizing, and management.
overseeing the organization’s
processes to balance revenues  Henri Fayol was a French mining
and costs and achieve the highest executive, mining engineer, director
possible operating profit. and author of mines who introduced
the general theory of business
 An operations manager is tasked administration called the Fayolism.
with ensuring that the organization
successfully converts inputs such as  Fayol’s work was the first
materials, labor, and technology into comprehensive pronouncement of
outputs in an efficient manner. the general theory of management.
Based on his experience as a
successful director of a mining
company, he designed various
theories that are relevant even to this
day.
 He was the first theorist to define the
 Management has been described as a functions of management in his book
social process involving “General and Industrial
responsibility for economical and Management” in the year 1916.
effective planning & regulation of
operation of an enterprise in the  Motivational theorist Henri Fayol put
fulfillment of given purposes. forth an argument that management
in their everyday routine carries our
 It is a dynamic process consisting of five major functions. They are
various elements and activities. Planning, Organizing, Commanding,
These activities are different from Coordinating, and controlling.
operative functions like marketing,
finance, purchase etc. Five Management Functions

 Rather these activities are common  Planning

to each and every manger  Organizing
irrespective of his level or status.  Staffing
 Directing
 Controlling
Planning  Identification of activities.
 It is the basic function of  Classification of grouping of
management. It deals with chalking activities.
out a future course of action &
 Assignment of duties.
deciding in advance the most
appropriate course of actions for  Delegation of authority and creation
achievement of pre-determined of responsibility.
goals.
 Coordinating authority and
 According to KOONTZ, “Planning responsibility relationships.
is deciding in advance - what to do,
when to do & how to do. Staffing

 Planning is determination of courses  It is the function of manning the

of action to achieve desired goals. organization structure and keeping it
Thus, planning is a systematic manned. The main purpose o staffing
thinking about ways & means for is to put right man on right job
accomplishment of pre-determined  According to Kootz & O’Donell,
goals. “Managerial function of staffing
 Planning is necessary to ensure involves manning the organization
proper utilization of human & non- structure through proper and
human resources. It is all pervasive, effective selection, appraisal &
it is an intellectual activity, and it development of personnel to fill the
also helps in avoiding confusion, roles designed un the structure”.
uncertainties, risks, wastages etc. 3.1. Manpower Planning
Organizing  Estimating manpower in terms of
 It is the process of bringing together searching, choose the person and
physical, financial, and human giving the right place.
resources and developing productive 3.2 Recruitment Selection and Placement
relationships amongst them for
achievement of organizational goals.  Recruitment and selection objectives
include a variety of components
 According to Henry Fayol, “To related to finding, hiring and
organize a business is to provide it retaining qualified employees.
with everything useful or it’s
functioning i.e., raw material, tools, 3.3 Training & Development.
capital and personnel”.  refers to educational activities within
 To organize a business involves a company created to enhance the
determining & providing human and knowledge and skills of employees
non-human resources to the while providing information and
organizational structure. Organizing instruction on how to better perform
as a process involves: specific tasks.
3.4 Remuneration 4.1 Supervision
 Designing fair and attractive bonus  Implies overseeing the work of
programs subordinates by their superiors. It is
the act of watching & directing work
 Evaluating how effective the benefit
& workers.
packages are in terms of employee
satisfaction. 4.2 Motivation
3.5 Performance Appraisal  means inspiring, stimulating or
encouraging the sub-ordinates with
 Managers are responsible
zeal to work. Positive, negative,
for providing employees with
monetary, non-monetary incentives
constructive feedback on a regular
may be used for this purpose.
basis.
4.3 Leadership
 Throughout the evaluation period,
managers give their employees  may be defined as a process by
ongoing support, feedback and which manager guides and
counseling on performance issues influences the work of subordinates
and, when necessary, disciplinary in desired direction.
and corrective action.
4.4 Communications
Directing
 is the process of passing information,
 It is that part of managerial function experience, opinion etc. from one
which actuates the organizational person to another. It is a bridge of
methods to work efficiently for understanding.
achievement of organizational
Controlling
purposes.
 It implies measurement of
 It is considered life-spark of the
accomplishment against the
enterprise which sets it in motion the
standards and correction of deviation
action of people because planning,
if any to ensure achievement of
organizing and staffing are the mere
organizational goals.
preparations for doing the work.
 The purpose of controlling is to
 Direction is that inert-personnel
ensure that everything occurs in
aspect of management which deals
conformities with the standards. An
directly with influencing, guiding,
efficient system of control helps to
supervising, motivating sub-ordinate
predict deviations before they
for the achievement of organizational
actually occur.
goals. Direction has following
elements:
Supervision Leadership
Motivation Communication
  Controlling is the process of
checking whether or not proper
progress is being made towards the
objectives and goals and acting if
necessary, to correct any deviation
Therefore, controlling has following steps:
1. Establishment of standard
performance.
2. Measurement of actual performance. 1. Classical Approach
3. Comparison of actual performance  The classical approach to
with the standards and finding out management focuses on centralized
deviation if any. authority, labor specialization and
4. Corrective action. incentives to optimize productivity in
an organization and, in turn, drive
Different Approaches in Operations profits.
Management.
What is the importance of classical
 Different Approaches are collection approach?
of ideas that recommend general
rules for how to manage an  One of the advantages of classical
organization or business. management approach is the division
Management theories address how of labor.
supervisors implement strategies to  Projects are broken down into
accomplish organizational goals and smaller tasks that are easy to
how they motivate employees to complete.
perform at their highest ability.
 Employees' responsibilities and
There are four types of management expectations are clearly defined.
approaches:
 This approach allows workers to
1. Classical Approach, narrow their field of expertise and to
2. Human Relation Approach, specialize in one area.

3. System Approach Powerful Tools to Motivate and

Retain Employees
4. Contingency Approach.
  A positive work culture encourages
employee friendships, improves
personal well-being, and ultimately
benefits your bottom line.
System Approach
 Systems approach is a management
perspective which advocates that any
business problem should be seen as
system as a whole which is made up
of an hierarchy of sub-systems.
 Systems approach can be applied to
all the business domains like
administration, insurance, banking,
hospitality etc.
 By a systems approach to
Human Relation Approach
management is meant the study of a
 'Human relations as an area of firm in its totality so that the men
management practice is the and material resources of the firm
integration of people into a work can be organized to realize the firm's
situation in a way that motivates overall objectives as efficiently as
them to work together productively, possible.
cooperatively and with economic,
Contingency Approach
psychological and social satisfaction.
 The contingency approach, often
 Management recognizes employees
called the Situational Approach is
as humans with needs rather than
based upon the premise that all
cogs of a machine.
management is essentially situational
Why is the human relations approach in nature.
important?
 All decisions by managers will be
 Human relations is critical affected (if not controlled) by the
for developing and maintaining a contingencies of a given situation.
positive work environment, retaining
 There is no one good way to address
employees and encouraging
any decision. Contingencies arise
productivity.
from various environmental factors.
 Happier employees are more As such, managers must take into
engaged. And engaged employees account these contingencies when
show increased productivity as well making decisions that affect the
as a far lower rate of absenteeism organization.
from work. A healthy work
environment matters.
  A contingency plan is a backup plan, 1. Product Design
activated in the event of a disaster
2. Forecasting
that disrupts a company's production
and puts employees in danger. 3. Supply Chain Management
 The goal of the plan is to safeguard 4. Delivery Management
data, minimize disruption and keep
everyone as safe as possible. Product Design

Who is Operation Manager  Product design involves creating a

product that will be sold to the end
 Operations Managers oversee consumer. It involves generating new
operational activities at every level ideas or expanding on current ideas
of an organization. in a process that will lead to the
production of new products.
 Their duties include hiring and
training employees and managing  The operations manager’s
quality assurance programs. responsibility is to ensure that the
products sold to consumers meet
 An operations manager also
their needs, as well as match
strategizes process improvements to
current market trends
ensure everyone completes their
tasks on schedule.  Consumers are more interested in the
quality of the product more than the
Who qualifies as operations manager?
quantity, and the organization should
 Applicants with a degree in business create systems that ensure the
administration, business products produced meet the needs of
management, or accounting, and the consumer.
relevant experience in a position that
Forecasting
would prepare them for the
responsibility of operations manager  Forecasting involving making
are typical qualifications. predictions of events that will occur
in the future based on past data.
Responsibilities in
Operations Management  One of the events that the operations
manager is required to predict is the
 Operations management is a field of
consumer demand for the company’s
business that involves managing the
products.
operations of a business to ensure
efficiency in the execution of  The manager relies on past and
projects. It means that the individual present data on the uptake of the
in charge of the department will be company’s products to determine
required to perform various strategic future trends in consumption. The
functions. forecasts help the company know the
volume of products needed to meet
Some of the functions include:
the market demand.
Supply Chain Management consumers ordered and that they
meet their functionality needs.
 Supply chain management involves
managing the production process  If the customer is unsatisfied with
from raw materials to the finished the product or is complaining about
product. certain features of the product, the
operations manager receives the
 It controls everything from
feedback and forwards it to the
production, shipping, distribution, to
relevant departments.
delivery of products.
Ideal Skill of an Operation Manager
 The operations manager manages the
supply chain process by maintaining  Unlike the marketing or finance
control of inventory management, departments, where managers are
the production process, distribution, responsible for their departments,
sales, and sourcing of suppliers to operations management is a cross-
supply required goods at reasonable department role where the manager
prices. assumes an array of responsibilities
across multiple disciplines.
 A properly managed supply chain
process will result in an efficient To be successful, an operations manager
production process, low overhead must possess the following skills:
costs, and timely delivery of
1. Organizational Abilities
products to consumers.
2. Coordination
Restaurant Supply Chain
3. People Skills
Consists of the physical access point where
the product is provided to customers and 4. Tech- Savvy
the methods of transporting or storing
goods before making them available for 1. Organizational Abilities
clients.  Organizational abilities refer to the
 Supplier ability of the operations manager to
 Commissary focus on different projects without
 Café France getting distracted by the many
 Guest Consumer processes.

Delivery Management  The operations manager should be

able to plan, execute, and monitor
 The operations manager is in charge each project to the end without
of delivery management. losing focus.
 The manager ensures that the goods  If a manager is not organized,
are delivered to the consumer in a uncompleted tasks will pile up,
timely manner. They must follow up important documents will get lost in
with consumers to ensure that the the process, and a majority of the
goods delivered are what the time will be spent finding lost
 documents that could be easily operations manager needs to show
accessible had the manager been tolerance and understanding to other
organized. people.
 Good organization skills can increase  Also, the manager should be able to
production efficiency and help the resolve conflicts and mediate
manager save time. disputes between employees and
members of the senior staff.
Coordination
Tech-savvy
 An operations manager needs to have
good coordination by knowing how  In this age of rapidly advancing
to integrate resources, activities, and technologies, an operations manager
time to ensure proper use of the needs to have an affinity for
resources toward the achievement of technology in order to be in a
the organization’s goals. position to design processes that are
both efficient and tech-compliant.
 Coordination involves carrying out
specific activities simultaneously and  Modern organizations are becoming
switching between the activities with increasingly tech-dependent in order
ease. to gain a competitive advantage in
the market.
 It also involves dealing with
interruptions, obstacles, and crises,  This means that most of the
and efficiently going back to the processes conducted manually, such
normal routine functions to prevent as procurement, must transition to
further interruptions. more efficient automated processes.
People Skills  When an operations manager is
familiar with the latest innovations in
 Most of the responsibilities of an
the tech industry, they can use the
operations manager involve dealing
innovations to improve internal
with people. This means that they
processes.
must know how to relate with the
employees, outside stakeholders, and
other members of senior
management.
 An operations manager should know
how to manage the fine lines with
other colleagues by knowing how to
communicate, listen, and relate to
them on professional and personal
levels.
 Since workplaces are made up of
people from diverse cultures, the