Reading 11 - Introduction to Operations Management

What is operations management?

responsible for efficiency - managing resources to meet customers needs and delivery of goods and services

Figure 1 page 90 - Input-Process-output model

Op Managers - have to carefully use outputs, ensure the process is done correctly and the output runs smooth

Transformation processes

Material Processing = manufacturing operations

Information processing = processing info banks, It etc

Customer processing = customer facing, hotel, theme parks etc

Physical transformation - turning ingredients/ pieces into end product

Informational transformation = transferring data / reports, data processing

Possession transformation = shops changing possession from one to another (selling)

Location Transformation = materials to/from suppliers/customers

Storage Transformation = inventory in warehouse., data on servers etc

physiological or psychological transformation = medical treatments, mental health services, feelings after have a service at hairdressers etc

Page 92 & 93 example tables of transformation process

What do Op Managers Do?

Organising Input resources - decide resources, facilities and people needed to be involved whilst working to budgets ettc

Managing the outputs = manging timings for products/services to customers expectations. Must understand requirements, make delivery promises, don't over promise what wont be possible

Managing Processes - transformation processes

The design of processes - must work with others to design & develop processes to meet customers needs - if not done well will lead to poor outputs

Planning and control - scheduling staff, works, activities including quality control activities, including systems to raise poor quality lack of stock etc

Improvement - increasing emphasis on quality improvement

Table 3 page 96 Operations management activities

Short Term Vs long term perspectives of op management = Long term plans may get pushed back to deal with short term crises although if planned out well in long term there is less likelihood of short term problems

Simplicity Vs Complexity = best flow, simple and steady, not complex with changes last minute.

The Importance of Operations Management

Op Man, can make positive impact on

  • reducing costs through efficient operations
  • enhancing revenues by providing more marketable goods and services through quality, service and innovation
  • minimising the capital needed to establish a viable operation
  • developing capabilities and competences that allow markets to be served more effectively or new markets entered

The Hayes and Wheelwright four stage model

Figure 2. Page 97

model helps understand role of operations in competitive market

Stage 1: Internally neutral = lowest level of capability, holds org. back, due to underperformance relative to market requirements and/or regularly makes mistakes delivering low quality product/service. No future development, dealing with short term problems

Stage 2: Externally neutral - as good as their competitors at sertving market - no specific advantage. striving for best practice in industry. New development done outside of operations dep.

Stage 3: Internally Supportive: Offers best capabilities in sector and competitive strategy linked to ops. org exploit operations to offer better prices, faster delivery etc. Achieving recognition for good quality helps market advantage

Stage 4: Eternally Supportive = not common level, service/product/competitive advantage based on ops capability

Operations as Source of Risk

when operations go wrong can affect brand identity, profits, customers, b2b, reputation etc

BP Deepwater Horizon

If org claims of good business is not lived up to

Adopting poor supply chain where there are poor working conditions for some

Are you an Op Manager?

Very inclusive title and includes all people without it in their job title

input -process - output