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5.1: The Role of Operations Management (Operations Management: The…
5.1: The Role of Operations Management
The Nature of Operations
focus on ‘manufacturing physical goods’ has changed
issues considered by production managers in manufacturing businesses: location, stock levels & suppliers
operations management
: the use of resources called inputs like land, labour and capital to provide outputs in the form of goods and services.
consider:
efficiency of production
quality
flexibility & innovation
produce goods and services of the required quality, in the required quantity, at the time needed, in the most cost-effective way.
Relationship Between Operations & Other Business Functions
decisions can´t be taken in isolation of the rest of the business
ensure appropiate quantity for MARKETING to successfully sell it
HR employs appropiate number of qualified workers
decisions like expanding require FINANCE
Operations Management: The Production Process
‘inputs’ are converted into ‘outputs’, this is called the ‘transformation’ process
this process applies to both manufacturing and service industries
production
: the making of tangible goods and the provision of intangible services
the aim is to ‘add value’ to the inputs
added values depends on:
the design of the product or the nature of the service
the efficiency with which the input resources are combined and managed
being able to convince consumers to pay more for the good or service than the cost of the inputs
added value
: the difference between the cost of purchasing raw materials and the price the finished goods are sold for
stages before sell:
converting a consumer need into a product that can be produced efficiently
organising operations so that production is carried out efficiently
deciding on suitable production methods
setting quality standards and checking they are maintained
Resources
Land
place to operate
Labour
manual labor
mental skills
effectiveness can be improved by training specific skills
Capital
tools, machinery, computers and other equipment
can also mean the amount the owners of a business invest to set it up
Ecological, Social & Economic Sustainability
"Planet, People, Profit
social enterprises have the specific aim of achieving the ‘triple bottom line’
‘triple bottom line’
: suggests that business performance should be assessed not just in terms of financial surplus (profit) but also by measuring the impact on the environment and society
Ecological Sustainability
ecological sustainability
: a capacity of ecosystems to maintain their essential functions and processes, and retain their biodiversity in full measure over the long term
reducing waste at all levels of the organisation
using less energy and sourcing energy from renewable sources
reducing water use and recycling water
reducing the use of non-renewable resources
designing products that use recycled materials or allow materials to be recycled at end of useful life
designing products that use less harmful energy sources
Social Sustainability
social sustainability
: the ability of a community to develop processes and structures which not only meet the needs of its current members but also support the ability of future generations to maintain a healthy community
designing production systems that are safe and healthy for employees
designing work and workplaces to allow for social interaction
creating jobs in low-income or deprived areas
reducing the negative impact of production on communities
Economic Sustainability
economic sustainability
: involves using the assets of the company efficiently to allow it to continue functioning profitability over time
managing and maintaining operational assets so that they have extended lifespans and do not need to be replaced through damage or unnecessary wear and tear
increasing the efficiency of the production process to improve business competitiveness
researching and developing products and processes that create customer interest and create value
Cecilia Martínez A01197738