Operations Management PDF

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Operations Management...

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Integrated Business Management Lecture 7: Operations Management 1. What is Operations Management?  “Operations Management is the activity of managing the resources that create and deliver service and products.”  Every organisation has an operations function, because every organisation creates some type of services and/or products. 2. Operations  All the activities necessary for the day to day fulfilment of customers requests (internal and external)  Includes sourcing services and products from suppliers and transporting them to customers (internal and external)  Working effectively with the other parts of the organisation is critical 3. Operations Management is all around you  The best way to start understanding the nature of “Operations” is to look around you  Everything you can see around you (except the flesh and blood) has been produced by an operation  Every service you consumed today (radio station, bus service, lecture, etc.) has also been produced by an operation  Operations Managers create everything you buy, sit on, wear, eat, throw at people, and throw away 4. Operations as input-transformation-output processes - operations, at the most general level, are all about the conversion or transformation of inputs into outputs

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t-transformation-output processes

6. Inputs

7. Outputs

8. Transformation Process Transformation processes include:  changes in the physical characteristics of materials or customers  changes in the location of materials, information or customers  changes in the ownership of materials or information  storage or accommodation of materials, information or customers  changes in the purpose or form of information  changes in the physiological or psychological state of customers Some Examples

9. Operations Management

10. Operation Management is Changing

The business environment is changing…          

Increased cost-based competition Higher quality expectations Demands for better service More choice and variety Rapidly developing technologies Frequent new product/service introduction Increased ethical sensitivity Environmental impacts are more transparent More legal regulation Greater security awareness

Prompting operations responses…             

Globalization of operations networking Information-based technologies Internet-based integration of operations activities Supply chain management Customer relationship management Flexible working patterns Mass customization Fast time-to-market methods Lean process design Environmentally sensitive design Supplier ‘partnership’ and development Failure analysis Business recovery planning

11. Different characteristics of operations processes The four Vs  The volume of outputs (McDonald’s vs. small cafeteria)  The variety of outputs (taxi vs. bus)  The variation in the demand for outputs (all-year-round hotel vs. summer holiday resort)  The degree of visibility which customers have of the production of outputs (‘brick and mortar’ retailer vs. web-based retailer) 12. The 4 V’s – Typology of Operations

13. A 4 Vs profile of two operations

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It is important to understand how different operations are positioned on the 4 V’s.  Is their position where they want to be?  Do they understand the strategic implications? 14. The 4 V’s – Typology of Operations...