Operations management p. 3-35
What is operations management?
Operations management is the activity of managing resources which are devoted to the production and delivery of products and services.
3 core functions
Marketing function – communicating the products to the market.
Product/service development function – creating new products/services.
Operations function – fulfilling customer requests.
Accounting/finance function – help making economic decisions.
HR function – recruits/develops staff.
All operations are input-transformation-output processes
Services – customers form part of the input to, and the output from, the operation.
Transformed resources (resources that are treated, transformed or converted in a process)
Materials – transform physical properties; change location; change possession; store.
Information – transform informational properties; change possession; store, change location.
Customers – change physical properties; store; transform location; transform physiological state; transform psychological state.
Transforming resources (resources that act upon the transformed resource)
Operations management is about managing processes
3 levels of operations analysis
The supply network – flow between operations
The operation – flow between processes
Processes – flow between resource
Operation as a function – the part of the organization which produces products for external users
Operation as an activity – the management of the processes within any of the organization’s functions.
Operations processes have different characteristics
Volume of output (McDonald’s)
Variety of output (Taxi vs. bus)
Variation in the demand for their output (hotels)
Degree of visibility which customers have of the production of the product or service (shops vs. internet sales)
The activities of operations management