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Production/OperationsManagement
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“ Course Introduction”
the course overview:
Design Improvement
Planning
and Control
Input
resources
Output
products andservices
Customers
Operations
Strategic
Objectives
Operations
Competitive Role
and Position
Operations
Strategy
Environment
Environment
Transforming
Resources
Transformed
Resources
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Chapter 1 – “ Operations
Management”
there are 3 core functions of an organisation
marketing
communicating the organisation’s products and services to the market
product/service development
creating new and modified products and services
operations(production) fulfilling customer requests for service and products
there are also support functions in an organisation
accounting and finance
human resource
engineering and technical
information/technical (IT)
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1 – Operations Management
operations processes take in a set of input resources which are then
used to transform something, or are transformed themselves, into outputs
of goods and services which satisfy customer needs
the inputs of operation are:
transformed resources (ie. materials, information, customers)
transforming resources (ie. machines, facilities, staff)
Transformation
ProcessCustomer
inputs outputs
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1 – Operations Management
transformation process includes:
materials processing:
manufacturing – change physically
delivery – change location
retail – change possession
warehouse – store materials
information processing:
accountant – change form
market research – change possession
library – store information
telecommunication – location of information
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1 – Operations Management
customer processing:
hairdresser – change physically
hotels – store
airlines – change location
outputs from the transformation process are “products” and “services”,
which are seen as being different in several ways:
tangibility (products are, services are not)
storability
transportability
simultaneity (products produced beforehand, services spontaneously)
customer contact
quality (of process, or output itself)
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1 – Operations Management
the overall operation function can be viewed as a network of micro
operations (internal customers and suppliers)
by treating internal customers with care, the whole operation can beimproved
to minimise effects of environmental disruption, operation managers put
into place:
physical buffering (at input or output)
organisational buffering (ie. supporting functions are a barrier againstenvironment)
buffering can be negative, as it shelters the operations from the outsidewhich can eventually lead to customer dissatisfaction
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1 – Operations Management
all operations differ in 4 important respects:
volume of output:
high volume enables repeatability, specialisation, systemisation, low unit cost
variety of output:
lack of change and disruption in operations results in lower costs
variation in demand for output: ie. summer holiday resorts, as opposed to a hotel near tourist attraction
degree of visibility:
customer processing is more visible to customers than materials processing front office
back office
high volume, low variety, low variation and low visibility help reducecosts
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1 – Operations Management
activities of operations management include:
direct responsibility:
developing clear vision of long term goals
decision making towards goals determining design of products and processes
planning and controlling resources
improving performance
indirect responsibility:
working together with other parts of the organisation
broad responsibility: globalisation
environmental protection
social responsibility
technological awareness knowledge management
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1 – Operations Management
operations management is:
the systematic design, direction, and control of
processes that transform inputs into services andproducts for internal, as well as external, customers
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1 – Operations Management – “ Supplement”
special points about managing operations:
”operations” account for largest budget within and organisation (usually)
business sustained if budgets and output of operations are met
applies pressure
critical to manage operations in short-term
continuity of production is necessary
fix problems as they come
make as good decisions as possible
operations manager should assess the impact of new technology on
operations performance, rather than having large knowledge about the
technology itself
to buy or not to buy decisions
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1 – Operations Management – “ Supplement”
dependence on supporting functions to keep production running
ie. maintenance, IT
support functions sometimes need to be motivated to deliver required
performance
addressing development and career expectations of employees
human needs
operations function ”translates strategy into action”
it is the interface between the thinking end (strategy) and doing end (meet
customer needs) of a business
complexity of management role due to contrasts:
short-term, day-to-day issues
long-term goals to be secured
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