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Area of Study 3: The Operations Management Function

The operations management function involves transforming resources into finished goods and services through efficient processes. An operations manager is responsible for strategic planning of products/services, processes, facilities and technology. Tactical planning includes material, labor, and quality management. Operational planning involves scheduling, sequencing, loading and rostering. The operations system consists of inputs that are transformed through processes to produce outputs. Key inputs are materials, labor, technology, and information. Productivity and quality objectives help improve competitiveness. Performance is evaluated through efficiency, waste reduction, productivity and customer satisfaction metrics.

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26 views13 pages

Area of Study 3: The Operations Management Function

The operations management function involves transforming resources into finished goods and services through efficient processes. An operations manager is responsible for strategic planning of products/services, processes, facilities and technology. Tactical planning includes material, labor, and quality management. Operational planning involves scheduling, sequencing, loading and rostering. The operations system consists of inputs that are transformed through processes to produce outputs. Key inputs are materials, labor, technology, and information. Productivity and quality objectives help improve competitiveness. Performance is evaluated through efficiency, waste reduction, productivity and customer satisfaction metrics.

Uploaded by

Juha Properties
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Area of Study 3: The Operations

Management Function
Chapter 6: Operations Management function
Operations Management
Task of managing the process that transforms
resources into finished goods and services
Managing resources to achieve efficient output of
goods and services
Operations and business objectives
Level of Planning Description of tasks undertaken
Strategic Planning -what products to make or services to
provide
-process and layout
-facilities
-location
Tactical planning -material resourcing
-labour resourcing
-layout and process design
-sourcing technology
-quality management
Operational planning -scheduling – what to process and when
-sequencing – order of process
-loading – amount of work placed onto
resources
-rostering – who does what and when
Role of Operations Manager
Ensuring that the operations systems meet objectives
of the organisation as a whole
Making strategic decisions relating to planning and
designing an operating system
Inventory management
Manufacturing
Quality
Maintenance/engineering
Operations system
Series of procedures and processes an organisation
take in order to create its outputs of finished goods and
services through the transformation of inputs.
Key Elements of Operations System -
INPUTS
Inputs – resources necessary to produce the product
Raw materials and components
Human Resources
Technology
Capital, plant and equipment
Information and knowledge
Times
Key Elements of Operations System -
PROCESSING
Transformation of inputs into outputs
Plans the process then organises its implementation
Process will vary according to:
types of goods and services produced
Size of the organisation
Number, quality and availability of resources
Key Elements of Operations System -
OUTPUTS
Final product, the results of the operations process
Outputs are goods or services
Good involves an object changing hands, service
involves purchase of labour
Management should ensure output type is responsive
to needs of the market
How operations management relates to
business objectives and strategy
An organisation in its desire to increase its level of
business competitiveness will require the operations
management functional area to establish objectives such as:
Increasing productivity
Improving quality of processes and output
Adopting a sustainable approach to its operations
These features can help enhance the competitiveness of the
business:
Optimal levels of operational efficiency
High standards of quality
Ethical and socially responsible considerations
Being able to measure level of achievement with objectives
The productivity objective
Productivity: level of output obtained from a level of input
Output (O) (units of production)
Productivity (P) = Inputs (I) (units of raw materials, capital,
labour)
Examples of productivity measures:
Units of production produced per employee
Crop tonnage per hectare planted
Number of client attended to per hour or per unit of wage cost
Number of units produced per unit of money
Productivity and quality improvements are key to achieving
international competitiveness
Business will attempt to gain competitive advantage based on
Factors determining organisational
productivity
Technology levels
Research and development
Equipment and facilities
Tasks and processes
Layout of facilities
Communications processes
Workplace safety
Evaluation of operations management
Key Performance Indicators appropriate to
determining if operations management system is
working well:
Efficiency
Level of waste
Productivity
Customer satisfaction (measured by repeat orders or
number of returned products.
Profit
Activities
Activity 6.3 Case Study p142-143

Chapter Summary Questions

Examination Preparation Chapter 6 p146

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