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Introduction to operations management - Coggle Diagram
Introduction to operations management
What is operations management?
Operations management function's responsible for efficient delivery of goods/services through effective management of organisation's resources
Assets tie up capital invested in the business - often costing much in interest payments
Operations manager manages process so these assets not kept unnecessarily or wasted
Achieved through good process design, effective planning and control systems, and workforce involved in continuously improved processes/systems
Input-output transformation model summarises set of roles
Shows types of resources they have to collect and use efficiently/effectively:
Includes fixed assets of facilities and equipment, materials and info used during process
Operations function responsible for output of goods/services - need to produce the right goods at right time in right location
This performance leads to levels of customer satisfaction
Must be achieved without overspending or excessive resource consumption - or unit costs will be too high and budgets/profitability constrained
Must consider other impacts of activities such as environmental impact of operations
All operations have common characteristics and same core theory
Differences in design and management due to types of resources that are transformed in processes and levels of volume and variety in the process
3 main types of transformation processes:
Material processing
Information processing
Customer processing
Types of transformational changes include:
Physical transformation
Informational transformation
Possession transformation
Location transformation
Storage transformation
Physiological/psychological transformation
What do operations managers do?
Organising the input resources
Subject to restraints such as financial restrictions or lack of availability of skilss
Managing the outputs
Aware of market requirements
Managing processes
The transformation processes
Divided into 3 areas:
Design of the process
Design and develop processes - dictated by design of the system
Planning and control
Timetable/schedule activities
Improvement
Continuous process improvement
Long-term developmental activities often pushed back
Many short-term problems reduced/prevented by good long-term decision-making
Constant tension between dealing with long-term and short-term development work
Best operations processes simple to understand - progress of work highly visible and flow of resources smooth/even
External market environments threaten to disrupt stability
The importance of operations management
Can make positive impact by:
Reducing costs
Enhancing revenues
Minimising capital needed to establish operation
Developing capabilities and competences
Hayes and Wheelwright four-stage model of operations strategy:
Externally neutral
As good as competitors at serving chosen market, no specific source of operations advantage, opportunities outside of core operations, no direct impact on competitiveness, most operations at this stage
Internally neutral
Lowest capability levels, operation holding organisation back. regular mistakes, low-quality product, costs of reputation and rework, solving existing short-term problems
Internally supportive
Best capabilities in sector, competitive strategy linked to operations, exploit capabilities, max returns and increase market share, gain reputation and deliver good quality, gain additional market advantage
Externally supportive
Very few organisations, competitive advantage through performance and capability that entire organisation strategy built around the operation, market expectations are changed by the operations' performance
If operations go wrong, this will impact organisation's revenues, competitiveness or reputation