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BUSS1501 Operations Management, Middle East College, Oman


Learning Outcomes

Identify and solve decision problems related to the various operations functions, like Project Management, Project Plan Gantt Chart, Break Even, and Inventory Management.

Differentiate the different techniques and use the appropriate technique in problem solving within operations management.


Operation management is the procedure within an organization to plan, arrange, manage, control and supervise its field of production and manufacturing. It is the administration of the business practices in pushing the efficiency level of the organization to its height. In simple words, it refers to the process of turning inputs into outputs successfully and timely, in addition with value to some extent (Peng and Lai, 2012). More or less, this management system has similar role to play in any kind of industry regardless the operational nature. This management practice is concerned with the labor and materials into products and services as systematically as possible,
targeting the maximum profit. Playing a pivotal role in any project of an organization, its significance lies in the improvement of overall productivity and managing daily activities seamlessly.

A number of various decisions are made under this management process that includes product and process design, operational strategy, capacity, production and facility plan, quality management and control over inventory management. Oman Oil Marketing Company (Omanoil) is a renowned name in the petroleum retail industry, owned and invested by Oman Oil Company. The company is working in the sectors of lubricants, fuel retailing, refueling of aviation, selling fuel directly to government and commercial sector and storage and distribution of oil (Stevens, 2016). In this following assignment, it has been described how this Oman based company can work on its operation management to take firm control over the inventory management and its ABC classifications along with advantages and disadvantages of this. In addition, the assignment briefly discusses why technology and project management is significant in operation management within Omanoil.

Question 1: What is productivity in operations management?

Proper business strategy and supporting operations management is what Omanoil needs to focus on to make their company more competitive, and the most effective way for a company to measure its competitiveness is through measurement of productivity (Subramanian and Ramanathan, 2012). This section of the assignment speaks about what the productivity in operation strategy or management refers to. As said earlier, operation management is liable for management of the transforming inputs into outputs, and productivity is the way to measure how efficiently and systematically the conversion happens. The overall efficiency and output of an operational system is defined as productivity in operation management. It is the quantitative relation between the types of items produced in the organization and the usage of those products as a resource used in production (Chofreh et al., 2014). It can be said to be a measurement of efficiency in a person, system, factory, machine etc. to convert inputs into utilizable outputs. The guidance towards management of production system, and its efficiency are the factors that are referred by productivity.


For the management personnel, productivity is one of the major concerns because of the essentiality of high productivity to survive in an environment of competition (Lewis and Brown, 2012). Both the total and partial productivity are simultaneously important. The managers of production and operation departments are especially interested in the tools for organizational research. This is because these tools help the managers to grow efficiency and capability of the company to gain profit.

Question 2: How important are ERP and MRP for operations management?

ERP or the “Enterprise Resource Planning” is a systematical program which delivers a completely integrated experience of manufacturing in an organization. This fully enterprise wide business solution contains support modules for software like sales and marketing, quality, manufacturing etc (Drexl and Kimms, 2013). Moreover, it is a business-management software category or a suite of typical integrated applications, used by an organization in gathering, storing, managing and interpreting data from variety of departments. The facility managers gain full transparency between departments as the modules for each of those departments inside a facility are transmitted via the central processing system of ERP.

“Material Requirement Planning (MRP)”, on the other hand, is the specific software solution which is helpful for a manufacturing organization to precisely calculate the materials it needs, along with the time and maximum amount of required materials. The more recent version of this system, the “Manufacturing Resource Planning (MRP II)”, consists of the details in planning capacity, control over shop floor and such other calculations (Leon, 2014). The later one provides the organizations with the ability to build a comparison in forecasts with actual data, along with analysis of performance and improvement in procedures that can achieve better efficiency to lead the organization towards optimum profit.


In the process of better operational management, Omanoil must understand that ERP is a full- business solution, while MRP is more focused on particular aspects. Both of these are two complementary systems for the company and ERP can work as a backbone which underpins multiple modules like MRP. ERP helps to run the core business process smoothly through automation and integration of every system throughout the company. It owns significance on “Customer Relationship Management (CRM)” from all aspects including from ordering through payments (Drexl and Kimms, 2013).

This also includes the economical side of the business which is always unnoticed by the customers. Operational scheduling, storage of financial data and inventory records, giving definition of business process, assurance of the compilation of those processes with the entire supply chain etc. are some of the key responsibilities of ERP system. But MRP wouldn’t allow the company to access the financial or CRM functions. It would rather give more control over the process of manufacturing without any attempt full-scale integration, required with ERP programs and applications (Leon, 2014). Omanoil need to decide which system will be more useful to help in the overcoming the struggles in the path of their growth and in achieving their goals.

Question 3: Why inventory management &amp; ABC classifications are significant in operations?

Inventory indicates to all kind of goods that exist in various stages to be made ready for sale. Generally, it is meant for those assets or items a company has that are expected to be sold within the next one year. Management of inventory is a systematic attitude in gaining, storing and profiting from non-capital assets. It is actually a management system of supervising non-capital assets and stock items. Being a component of supply chain management, the key function of inventory management is to provide a detail in records of every new or returned product as it leaves or enters a warehouse or sale-point (Parpia and Singh, 2016). This management system is quite of a complex process which is specifically needed in giant organizations, although the basic idea of it is essential, irrespective of the size or type of the company.

The optimization of inventory is crucial to keep the costs under control inside the supply chain, and to get the best out of management endeavor, it should be effectively focused on items that causes most cost for the business. The “ABC approach” describes that in the process of reviewing inventory, a company rate its items from A to C.


“A Classification items” are quite significant for an organization, and the demand for these items is quite high, resulting in requirement of frequent value analysis. “A categorized items” moves fast and the items’ value typically get lower, which operate the most percentage of the target level of the company service, along with the rate of customer satisfaction.

“B Classification items” own less importance than “A categorized items”, but more than that of “C categorized items”. These interclass items have medium consumption in inventory value and frequency of order.

“C Classification items”, on the other hand, holds the lowest consumption value and marginally important with high inventory value. Such items are generally stored in lower quantity or not at all as the carrying costs are high enough to be associated with stock levels. Omanoil should work on special consideration are required to be taken for new and essential items in the inventory (Tom Jose, Akhilesh and Sijo, 2013). In case of essential inventory items, they will need special monitoring to not run out of stock on the necessary items which might result in customer turn somewhere else. For new addition in products, using yearly demand is an option that will predict estimation in support of approximate demand.

Question 4: What importance does the Project Management Life Cycle hold here?

The main purpose of project management is to anticipate if there any possible danger and problem in the project. Moreover, having a proper plan for overcoming the problem in that particular field when problem occurs. Project management is always considered to a challenge for the companies. It is also referred to be as a practice for scheming, commencing, planning and executing etc in order to meet the desired goals within a given limit of time. The main challenge of project management is to achieve all the goals that are set by the company. Omaoil being a vast company must understand the basic facts of project management and guide its employees to achieve their fixed goals in the organization. If this organization can properly manage the task in time then it will become more successful in future (Stark, 2015). The company Omanoil must provide their employees the proper training to make their estimated tasks successful. There are mainly fours aspects of project management which Omanoil must follow. These aspects are also referred as the 4P’s:


I. Power: this aspect comprises of the decision makers, policies, authority in-charge.

II. Process: This aspect is known as the overall approach that Omanoil must follow to exhibit all the activities regarding the project.

III. Plan: Plan or the method of planning is an aspect which includes the activities that are to be forecasted and the proper planning schedule, objectives and the process.

IV. People: The Company must follow this aspect seriously and then initiate the planning program. This basically includes the aspects of communication and collaboration.
(Source: Stark, 2015)

These are the factors that make project management very important for operation management.

There are various role of the operation manager. The main roles are as the follows:

I. An operation manager must supervise over the financial information and the formation of budgets.

II. The operation manager must supervise over the inventory and supply chain.

III. The operation manager also works with the HR of the company in the process of hiring and training the new employees.

IV. Operation manager must purchase tools and things to enhance the efficiency of the department.

(Source: Tom Jose, Akhilesh and Sijo, 2013)

Adil Al Safiyan is the field operation manager of the Omanoil Company. This individual helps the company to complete the tasks in proper manner and provides continuous solutions regarding the improvements. Yogesh Singh is the operational manager of the company Hindustan Unilever Limited.

There are various problems that the company Omanoil must have to face in the coming years (Stevens, 2016). Thus the company must remain prepared for those obstacles. The company must identify the problems regarding the functions of project management, project plan Gantt chart and Break even analysis. In case of project management the issues that rise are regarding maintaining proper schedule, meeting the tasks (Stark, 2015).

Here, Omanoil can use the process of issue management to face the issues and to resolve them. In case of project plan Gantt chart there may be issues such as improper communication between the team of management, the limitations of Gantt chart may be very problematic for the team thus, the team of management must go for various updated software to keep their account of task (Peng and Lai, 2012). There are several problems regarding the break even analysis like the variable costs do not stay the same at all times. These problems could be only be solved by the management experts thus the company Omanoil must recruit the experts to complete this task in the wanted way.



In the end, it can be concluded that the aforesaid techniques and the way they are utilized have a huge and prime impact on the operation management of any company. Operations management of Omanoil needs to focus on the analysis of all the aspects mentioned in this assignment. In this process, they must consider upon understanding the possibilities through inventory management and its ABC classifications, the concept of ERP and MRP and which one of them would be more suitable for their company, and the life cycle of project management so that they can proceed towards the height of business growth and profit.

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