Advantages and Disadvantages of Production and Operations Management

10/04/2021 1 By indiafreenotes

Advantages of Operations Management

Overall, operations management is a key factor for manufacturing organizations that wish to take their production to the next level.  Some notable advantages include:

Better Resource Management: Operations management processes focus on effectively managing all of your resources to ensure that their potential is being maximized. Resources can include physical machines as well as labor resources.

Profitability Management: When your operations are properly managed, it is easier for your company’s executives to rely on the production activity to get a better understanding of your revenue stream. They are then able to rely on that consistent information to find new ways to increase sales or come up with new product ideas.

Competitive Advantage: Being able to coordinate the multiple levels and components of your manufacturing organization means that things will run much more smoothly. Your production time will likely decrease, allowing you to deliver goods on time which is a crucial aspect of having great customer relations. This will allow you to promptly deliver great products and keep you ahead of the competition.

Advantages to consumers:

A well-planned production function will lead to good quality products, higher rate of production and lower cost per unit. The consumers will be benefitted from prices of goods and will get good quality products. The availability of goods will also be satisfactory and the consumers will be saved from a lot of botheration which may otherwise be caused by scarcity of products.

Advantages to Investors:

An enhancement in productivity will increase profitability of the business. The investors will get higher returns on investment if profitability is better. This will also result in appreciation of assets values and ultimately the prices of shares will go up which will also benefit investors.

Advantages to employees:

Higher productivity will benefit employees in the form of better remuneration, stability in employment, good working conditions, etc. Better productivity to a worker will give him job satisfaction and improve his morale.

Advantages to suppliers:

Every enterprise depends upon supplies of raw materials, finished goods, spare parts etc. The suppliers will always like to deal with a concern having sound financial position. The company and its suppliers will have an enduring relationship only if both are satisfied with each other’s dealings.

Advantages to the community:

The economic and social stability of a- community is linked with growth and development of its industrial structure. An overall improvement in productivity will improve economic welfare of the society.

Advantages to the nation:

The advantages of various segments of society improve welfare of a nation. Better production management will result in proper and economical use of natural resources and elimination of wastages. An improved industrial climate will bring all round development and prosperity.

Disadvantages of Operations Management

Human Error: Another prevalent problem within manufacturing operations is the fact that humans tend to be mistake-prone. Most of the time, this issue occurs during the transition from manufacturing to sale. Because of this, it is important to ensure that operations management is coordinating various areas effectively such as operations, marketing, finances, accounting, engineering, information, and human resources.

Multi-Level Dependency: One of the main disadvantages is that a large amount of the success of implementing operations management procedures requires coordination between the different components of the organization. Even if an effective plan is put in place, it will fail if it is not carried out in the proper manner by all components.