Introduction to Operations

Management
 The Supply Chain Model

© Middlesex University 2021-22 PDE4910

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 The Supply Chain Model

© Middlesex University 2021-22 PDE4910

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What is
Operations Management ?

‘Operations Management is about the way

organisations produce goods and services’

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What is
Operations Management ?

Operations management (OM) is the set

of activities that creates value in the form
of goods and services by transforming
inputs into outputs (a transformation
process)
Examples of Operations
Kitchen unit
Back office operation in manufacturing operation
a bank

Retail operation
Take-out / restaurant
operation

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Concept of Operations

 Everything you can see around you has been

processed by an operation

 Operations Management creates everything you

buy, sit on, wear, eat, and throw away

 Every service you consumed today (radio station,

bus service, lecture, etc.) has also been produced
by an operation

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Operations as a
Transformation Process

INPUTS Operations OUTPUTS

• Materials Transformation • Goods
• Machines • Services
• Labour
• Staff
• Finance

Feedback Feedback

Requirements
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Transformations
• Physical - manufacturing operations

• Location - transportation

• Exchange - retail operations

• Storage - warehousing

• Physiological - health care

• Psychological - entertainment

• Informational - communications
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Operations at Prêt a Manger

Transformed
resources …
 Ingredients
 Packaging
 Customers

Input Served and

resources satisfied
customers

Transforming
resources …
 Equipment
 Fittings
 Staff

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Operations Management’s Remit

Operations is not just concerned with what goes

on at the point of production…, but is also
directly concerned with supplying the materials,
the location and layout of facilities, the
programming of operations and the motivation of
employees.

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 Operations Management at IKEA

Design a store layout

which gives smooth Ensure that the jobs
Overview Product and effective flow of all staff encourage
Placement their contribution to
business success

Continually examine
Monitor Number of
and improve
Customers visiting
operations practice
the store

Ensure cleanliness Monitor and enhance

and safety of quality of service to
storage area customers
Arrange for fast
replenishment of
products
Modified from Slack et al. (2007) Pearson
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 The Supply Chain Model

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Some interfunctional relationships
between the operations function and
other core and support functions

Engineering/ Understanding of the Product/service

capabilities and
technical constraints of the development
function operations process function
Analysis of new Understanding of
technology options process technology New product and
Provision needs service ideas
of relevant Understanding of
Accounting data the capabilities and
and finance constraints of the
function operations process
Operations
Financial analysis function Market
for performance requirements
and decisions Marketing
Understanding of function
human resource needs Understanding Provision of systems for
of design, planning and
Recruitment infrastructural
development control, and
and system improvement
and training needs

Human Information
Resources Technology
function (IT) function
Source: Slack et al (2007) Pearson 14
Some interfunctional relationships
between the operations function andIs it a day-to-day function
concerned with producing
other core and support functions the goods and/or services?

Engineering/ Understanding of the Product/service

capabilities and
technical constraints of the development
function operations process function
Analysis of new Understanding of
technology options process technology New product and
Provision needs service ideas
of relevant Understanding of
Accounting data the capabilities and
and finance constraints of the
function operations process
Operations
Financial analysis function Market
for performance requirements
and decisions Marketing
Understanding of function
human resource needs Understanding Provision of systems for
of design, planning and
Recruitment infrastructural
development control, and
and system improvement
and training needs

Human Information
Resources Technology
function (IT) function
Source: Slack et al (2007) Pearson 15
Computer Manufacturer - Operations

Sales
Manufacturing

Software
Development Customer
Service

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Operations as the Technical Core

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Management Levels

Strategic – Long Term - Years

Tactical – Weeks / Months

Operations – Days / Weeks

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 Ten Critical Decisions when
Planning for Operations
Planning productive systems—systems for getting the
day-to-day work done. Some are strategic decisions, other
tactical and/or operational decisions
 Service, product design  Job design
 Quality management  Supply-chain
 Process, capacity design management
 Location  Inventory management

 Layout design  Scheduling

 Maintenance

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 The Critical Decisions
over Planning for Operations
 Service and product design
What product or service should we offer?
How should we design these products and
services?
 Quality management
Who is responsible for quality?
How do we define quality?

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The Critical Decisions -
Continued
 Process and capacity design
What processes will these products require
and in what order?
What equipment and technology is necessary
for these processes?
 Location
Where should we put the facility
On what criteria should we base this location
decision?
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The Critical Decisions -
Continued
 Layout design
How should we arrange the facility?
How large a facility is required?
 Human resources and job design
How do we provide a reasonable work
environment?
How much can we expect our employees to
produce?

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The Critical Decisions -
Continued
 Supply chain management
Should we make or buy this item?
Who are our good suppliers and how many
should we have?
 Inventory, material requirements planning,
JIT “just-in-time” inventory
How much inventory of each item should we
have?
When do we re-order?
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The Critical Decisions -
Continued
 Intermediate, short term, and project
scheduling
Is subcontracting production a good idea?
Are we better off keeping people on the payroll
during slowdowns?
 Maintenance
Who is responsible for maintenance?

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The Five Competitive Objectives

• Quality
• Responsiveness
• Dependability
• Flexibility
• Cost

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Current Trends Influencing
Operations Management
• Internationalization
– business competition is global
• Environmental quality (Sustainability)
– environmental impact of operational decisions is a growing
concern for businesses
• Cross-functional processes / Supply chain management
– Business Process Redesign (BPR)
business is concerned with competitiveness of entire chain
of value-adding activities
– operational decisions must be more responsive to other
functional areas and other organisations in the supply chain
(Digitization - ERP Systems (Enterprise Resource Planning)
• The explosion of e-commerce
– the Internet (Online information, online sales and social media)

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End of Slides

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