Introduction to operations management
Definition
Transformation of inputs into outputs
Location of materials and information: Move items or people around or give access to information.
Ownership of materials: producers, wholesalers and retailers. Reduce number of transactions and makes process simpler.
Materials, information or customers: Take components and build something new (Doctors, hairdresses, cosmetic surgeons,teachers, dentists, accountants etc).
Planning, organizing, coordinating and controlling all activities involved in trasformation of inputs into outputs. Make sure the transformation process occurs in the way that the business wants and operational targets are met.
Results in: everything you read, use, consume, watch, listen to or wear.
Design of transformation process
Level of output Quantity of products or customers.
Quality of service
How will the business provide the service Online or shops, high staff level or more equipment.
Aspects of the business by itself or aspects outscurced/bought from others
Using factor of production
Capital: equipment and machinery, technology. Determines output, quality and flexibility.
Enterprise: ability of employees to bring new ideas and solutions, creativity.
Labour: Number of skills of people employed, contribution of employees.
Land: location decisions, farming, closeness of transport links for exporters, cost and ease of access to supplies.
Type of operation process
Capital intensive process: high proportion of capital goods compared to labour and land (bottling plant)
Labour intensive process: high proportion of labour compared to capital and land.
IB style questions:
- Define operations management.
- Suggest two factors of production that are involved in Coca Cola's transformation process.
- Discuss whether Shein should decide a capital-intensive process or labour-intensive process.