5.1 THE ROLE OF OPERATIONS MANAGEMENT
Introduction
Concerns of operations managers
Operation concerned with the use of resources or inputs such as land, capital and labour to provide output in forms of goods or services
Operation management also known as production management
Quality
Flexibility and innovation
Efficiency of production
Relationship between operations and other business functions
Operation managers need to work with human resource department so that appropriate numbers of suitably qualified workers are employed
Operation managers need to discuss regarding operations decisions that often require funding with finance department
Operation managers need to ensure the appropriate quantity of goods so that available for marketing department to sell it
Cons for not cooperating with other business functions
Operations have new product innovation but fails to develop effectively due to shortage of finance
Operations plan to increase output by introducing a third daily shift but not communicate to human resource department
Operations continue to manufacture product at the same output level though experiencing decline in sales
Operations identify new location for production facilities but human resource department is not consulted
Production process
Production process started when inputs are converted into outputs
Inputs such as resources, land, capital and labour are converted or transformed into outputs such as finished goods, services or components for other firms
Factors on degree of value added to inputs
Able to convince consumers to pay more for the good or service than the cost of the inputs
Efficiency with which the input resources are combined and managed
Design of the product or nature of the service
Stages before physically selling the good or service
organize operation so that it would be efficient
decide on suitable production methods
converting consumer need into a product
setting quality standards and check that they are maintained
Resources
Labour
Capital
Land
Business need somewhere to operate from and some require large sites
All business requires some labour input either the manual labour or mental skills. Quality of labour input is significant on the operational success. Effectiveness of labour can be improved through trainings
Refers to tools, machinery, computers and other equipment to produce goods and services. More productive and advanced capital would increase the chance of business success
Role of Operations management
Social sustainability
Economic sustainability
Ecological sustainability
Using less energy and sourcing energy from renewable sources where possible
Design product that use recycled materials or allow materials to be recycled at end of useful life
Reducing waste at all levels of the organisation
Reduce water use and recycling water
Design work and workplaces to allow social interaction
Create jobs in low-income or deprived areas
Design production systems that are safe and healthy for employees
Reduce the negative impact of production on communities
Manage and maintain operational assets such as equipment, machinery and buildings so that they have extended lifespans
Increase the efficiency of the production process to improve business competitiveness
Research and develop products and processes that create customer interest and create value