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