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Consistently successful businesses are adept at

revising strategy as the competitive landscape


changes, using well-honed operations management
to put improvements into play. But what exactly is
operations management? There are many defini-
tions, but the group of articles in this months The
Manager from PRO-DAIRY is based on this one:
Operations management is the ability to maintain
and/or continually improve the day-to-day opera-
tions of a business using analysis and management
skills in a planned and organized way.
Of the many ways to conceptualize how a busi-
ness works, the pyramid approach (Figure 1), bor-
rowed from John Young, a management consultant
formerly with Dairy Strategies LLC,
puts operations management where
it belongs an integral part of a
sturdy business foundation.
This model can be explained this
way: Rooted in common values and
a shared vision, the management
team creates a business and organi-
zational structure supported by key
people. Together, they successfully
accomplish day-to-day operations
using capital investment wisely.
Production systems are continually
honed to achieve short- and longer-
term goals that prove to be success-
ful.
In this model, operations man-
agement and key people link the
foundation to the building blocks.
Many businesses spend too much energy focused on
the wow aspects of production systems, such as
the best mixer wagon or most expensive computer
interface. Managing production systems from an
operations management perspective means you have
an eye on strategic intent doing the right things
as you explore the most effective and efficient ways
to do things right within the systems.
A process approach
Figure 2 looks at a production system, such as
feeding, as a process. The process approach has
measured inputs feedstuffs at one end and mea-
sured outputs milk, in this example at the other.
OPERATIONS MANAGEMENT
What is operations
management?
By John Conway
The Manager, a special section prepared by PRO-DAIRY specialists, appears in Northeast DairyBusiness six times a year. In keeping with the PRO-DAIRY mission, The Manager helps strengthen the management skills of
Northeast dairy producers and increase the profitability of the Northeast dairy industry. PRO-DAIRY, an educational program begun in 1988, is a joint venture of the New York State Department of Agriculture and Markets, Cornell
Universitys College of Agriculture and Life Sciences, and Northeast agriservice organizations. Find copies of PRO-DAIRY articles at the programs website: www.ansci.cornell.edu/prodairy.
INSIDE
What is operations
management?
page 16
The Management 1, 2, 3
page 18
How do you make decisions
page 20
Employ problem-solving
cycle
page 21
SOPs put punch into
operations management
page 22
Profit teams boost
operations management
page 24
Oh, no, not another
meeting
page 25
Worthy records
page 26
Speaking the same language
page 28
THE MANAGER
Leading The Way To Prot Through People

Think of
operations
management
as the hinge
between strategy
and day-to-day
accomplishments
August 2008
Figure 1. Operations management is part of a business foundation
16 Northeast DairyBusiness PRO-DAIRY August 2008
The controlled magic occurs in the processes at center. Whether
its developing a ration, mixing and delivering feed, measuring
consumption or assessing feed conversion, trained, observant and
motivated people are critical.
This process approach to operations management may also
help an operations manager develop a Hazard Analysis of Critical
Control Points (HACCP) plan for the system. Instead of waiting
until measured outputs have declined, applying HACCP principles
means measures are routinely taken among steps within the process.
Correcting problems earlier in a process often means minimizing
losses in outputs.
The operations manager also recognizes that other systems
external agents such as housing and milking directly influence the
process. In the case of the feeding process, housing ventilation will
affect dry matter intake and outputs such as milk harvest.
The milk:feed ratio is another external agent influencing the
feeding process. It may dictate that a dairy limit certain feed inputs
as cost destroys any marginal return in outputs. Astute operations
managers may continue to feed at a loss to sustain production, pre-
serving base milk quantity when price conditions improve.
Critical actions
Figure 3 presents another view of the feeding system. This is an
at a glance summary of all the critical actions within a system, as
well as some output measures typically used to track performance.
As a control tool, measuring real-time performance of process
steps, such as forage quality, trumps measuring output solely.
Process steps tend to be dairy specific, so top-notch operations man-
agers develop their own measures. These should lead to acceptable
outcome measures, ranging from dry matter intake to peak produc-
tion in this example.
Help people prosper
Given that people in the process drive operations management,
creating new and better ways to help them prosper in their jobs
is the focus of many articles in The Manager. Some examples:
Production-oriented discussion groups provide ideas and opinions
from other dairies dealing with similar issues. Profit teams help
bring additional ideas and insight to business strategy and opera-
tions. Employee/management team meetings help assure two-way
communication and synergy. Employee training, most often using
task-related standard operating procedures (SOPs), requires one-on-
one human interaction.
While the remaining articles in the section also involve people,
they emphasize the if you dont measure it, you cant manage it
aspects of operations management. Usable records and the relatively
new Dairy Profit Monitor are examples of critical tools used to
decide how to improve a process that might be throttling perfor-
mance.
It may work to think of operations management as a hinge
between strategy and day-to-day implementation of that strategy in
a repeatable and organized way. Suffice it to say that high-perform-
ing operations managers have unparalleled job security its that
important to a thriving business.

THE MANAGER
Figure 2. Everything hinges on the person in the process
Figure 3. Critical actions in the feeding system and output measures
FYI
John Conway is a dairy production manage-
ment specialist with Cornells PRO-DAIRY
program. Contact him at 607-547-2536 or
jfc6@cornell.edu.
For a document that shows crop and dairy
production systems, go to the PRO-DAIRY
website: www.ansci.cornell.edu/prodairy and
look for a link to the information.
August 2008 PRO-DAIRY Northeast DairyBusiness 17