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Role of operations management (Relations with other functions (If there is…
Role of operations management
Aims
Efficiency of production:
Keeping costs as low as possible will help regulate the cash flow and competitiveness
Flexibility and innovation:
The need to develop and adapt to new processes and products is increasingly important nowadays.
Quality:
The g or s must be suitable for the purpose
Relations with other functions
Managers need to ensure that the needed quantity of the g or s is available so the marketing department can sell it
Managers need to work closely with the HRM so suitably qualified employees are employed in appropriate numbers
Expanding capacity decisions needs capital from the finance department.
If there is no communication
Operations may continue to manufacture a product at the same output level even though it is experiencing a decline in sales thus, revenue
Operations plan to increase output in a factory by introducing a third daily shift for workers but HRM are not told.
Operations have a new product development but the finance department is not properly told thus, leading to a badly developed product due to shortage of finance.
Production process
There are inputs = Land, labour, capital and resources = outputs = services, finished goods, manufactured goods etc.
The aim is to add value to the inputs that are bought so the output can result in a profit for the business.
The value of the output depends on
:
The design of the product/nature of the service
The efficiency of how the input resources are combined:
e,g, by reducing waste or increasing productivity, the operations management will increase the value of the product = a decrease in costs.
Persuading consumers to pay more for a g or s than the cost of inputs:
The marketing behind the purchase of the good is very important. e.g. an ice cream man selling ice cream - the consumer buys this a lot more expensive then they would if they bought the ice cream and cone seperately.
Resources
Land
: all businesses need somewhere to work from or on.
Labour:
All businesses require labour input. This can be manual (gardener) or mental (scientist). The quality of the input will have a significant impact on the output
Capital:
The tools, machinery, computers etc. used to produce the g or s. This can also be the amount owners invest to start the business. The more productive and advanced the capital the higher the chance of success.
Sustainability
Ecological
A capacity of ecosystems to maintain their essential functions and processes and retain biodiversity in full measure over longterm
Achieved by:
Reducing waste at all levels
Reducing water use and recycling water
Reducing the use of non-renewable resources in production
Designing products that use less harmful energy-sources
Social
The ability of a community to develop processes which not only meet the needs of current members but also future generations
Achieved by:
Designing production systems that are safe and healthy for employees
Designing work and workplaces for social interaction and teamwork
Creating jobs in low-income or deprived areas.
Reducing the negative impact of production on communities - pollution, oil leaks etc.
Economic
Involves using the assets of a company efficiently to allow it to continue functioning profitably over time
Achieved by:
Managing and maintaining operational assets - equipment, machinery, buildings - so they have an extended lifespan and do not need to be constantly replaced meaning costs for the business.
Increasing efficiency to improve production process - Involve increasing labour and capital productivity. High-productivity businesses tend to have lower unit costs and a better chance of future profitability.
researching and developing products and processes that create customer interest and value.
Common aspects is the long term. Meaning undertaking activities today that do not deprive or limit future generations of undertaking the same activities.