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SELF STUDY - Operations Management

Operations management involves managing the processes that transform inputs such as materials, labor, and information into outputs such as products and services. It is concerned with designing processes, planning and controlling operations, and improving performance. Operations management is important because it can reduce costs, increase revenue through quality and customer satisfaction, lower the investment needed, and provide the basis for innovation, all of which can significantly impact a company's success.

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307 views15 pages

SELF STUDY - Operations Management

Operations management involves managing the processes that transform inputs such as materials, labor, and information into outputs such as products and services. It is concerned with designing processes, planning and controlling operations, and improving performance. Operations management is important because it can reduce costs, increase revenue through quality and customer satisfaction, lower the investment needed, and provide the basis for innovation, all of which can significantly impact a company's success.

Uploaded by

studd77
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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OPERATIONS

MANAGEMENT

Self Study Summary Notes


Rerefence Book : Neigel-Slack, 5th Edition
Operations Management is:
• The activity of producing and delivering of
products and services that satisfy market
requirements.
OPERATIONS MANAGEMENT FUNCTIONS

CORE FUNCTIONS
• Product/Service Development function
• Marketing function

SUPPORT FUNCTIONS
• Information Systems function
• Human Resources function
• Accounting & Finance function
• Technical function
O.M PROCESSES CONCERNS
• Process Design : ( ex: arranging the store’s layout to give smooth and
effective flow of customers)
• Product Design : (ex: designing stylish products that can be flat-packed
efficiently)
• Job Design : (ex: making sure that all staff can contribute to the
company’s success)
• Supply Network Design : (ex: locating stores of an appropriate size in the
most effective place)
• Supply Chain Management : (ex: arranging for the delivery of products to
stores)
• Inventory Management : (ex: avoiding running out of products for sale)
• Quality Management : (ex: monitoring and enhancing quality of service to
customers )
• Operations Improvement : (continually examining and improving
operations practice)
THE TRANSFORMATION PROCESS
All operations produce products and services by changing
inputs into outputs. They do this by using the ‘input–
transformation–output’ process.
Within any operation, the mechanisms that
transform inputs into outputs are called
processes
OPERATIONS PROCESSES CHARACTERISTICS

 the volume of their output;


 the variety of their output;
 the variation in the demand for their output;
 the degree of visibility which customers have of the
production of the product or service.
CHARACTERISTICS IMPLICATIONS
OPERATIONS MGMT ACTIVITIES
• Understanding the operation’s strategic objectives.
The first responsibility of any operations management team is to understand what it is
trying to achieve. This means developing a clear vision of how the operation should
help the organization achieve its long-term goals. It also means translating the
organization’s goals into their implications for the operation’s performance
objectives, quality, speed, dependability, flexibility and cost.

• Developing an operations strategy for the organization.


Operations management involves hundreds of minute-by-minute decisions, so it is vital
that operations managers have a set of general principles which can guide decision
making towards the organization’s longer-term goals. This is an operations strategy.

• Designing the operation’s products, services and processes.


Design is the activity of determining the physical form, shape and composition of
products, services and processes. Although direct responsibility for the design of
products and services might not be part of the operations function in some
organizations, it is crucial to the operation’s other activities.
OPERATIONS MGMT ACTIVITIES
• Planning and controlling the operation.
Planning and control is the activity of deciding what the operations resources should be
doing, then making sure that they really are doing it.

• Improving the performance of the operation.


The continuing responsibility of all operations managers is to improve the performance
of their operation.

• The broad responsibilities of operations management.


Many businesses are increasingly recognizing that operations managers have a set of
broad responsibilities and concerns beyond their direct activities described
previously. All businesses will interpret these broader responsibilities in different
ways. Five that are of particular relevance to operations managers are the effects of
globalization, the pressures for environmental protection, the increasing relevance
of social responsibility, the need for technology awareness, and how knowledge
management is becoming an important part of operations management.
WHY IS O. MGMT SO IMPORTANT?
All the activities of operations management can very significantly contribute to the
success of any organization by using its resources effectively to produce goods and
services in a way that satisfies its customers. To do this it must be creative,
innovative and energetic in improving its processes, products and services. In fact,
an effective operation can give four types of advantage to the business.

 it can reduce the costs of producing products and services and being
efficient;
 it can increase revenue by increasing customer satisfaction through good
quality and service;
 it can reduce the amount of investment (sometimes called capital
employed) that is necessary to produce the required type and quantity of
products and services by increasing the effective capacity of the operation
and by being innovative in how it uses its physical resources;
 it can provide the basis for future innovation
HOW CAN OPERATIONS AFFECT PROFITS?
WHAT IS OPERATIONS MANAGEMENT?

 Operations management is the activity of managing the resources which are devoted to
the production and delivery of products and services. It is one of the core functions of any
business, although it may not be called operations management in some industries. The
span of responsibility varies between companies, but will usually overlap with the other
functions.

 Operations management is concerned with managing processes. And all processes have
internal customers and suppliers. But all management functions manage processes.
Therefore, operations management has relevance for all managers.

How are operations different from each other?

 Operations differ in terms of the volume of their outputs, the variety of outputs they
produce, the variation in demand with which they have to cope and the degree of
‘visibility’ or customer contact they have.

 High volume, low variety, low variation and low customer ‘visibility’ are usually
associated with low cost.
What are the similarities between all operations?

 All operations can be modelled as input–transformation–output processes. They all


have inputs of transforming resources, which are usually divided into ‘facilities’ and
‘staff’, and transformed resources, which are some mixture of materials, information and
customers.

 Few operations produce only products or only services. Most produce some mixture of
tangible goods or products and less tangible services.

 All operations are part of a larger supply network which, through the individual
contributions of each operation, satisfies end customer requirements.

 All operations are made up of processes that form a network of internal customer–
supplier relationships within the operation.

 End-to-end business processes that satisfy customer needs often cut across functionally
based processes.
What do operations managers do and why is it so important?

 Responsibilities include the translation of strategy into operational action, the design of
the operation (not only the products and services themselves but the systems or processes
which produce them), the planning and controlling of the activities of the operation and the
improvement of the operation over time.

 Operations management can have a profound effect on reducing the costs incurred by
an organization, increasing its revenue, reducing the amount of investment needed and
providing the basis for future innovation.

 It is increasingly important because a more turbulent and dynamic business


environment requires new thinking from operations managers.

 Because of the cost structure of many organizations, improving operations practice can
be the most effective way to improve the financial performance of the organization.

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