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Chapter 1 Operations management 11
Table 1.2 Changes in the business environment are shaping a new operations agenda
The business environment is changing . . .
For example,
• Increased cost-based competition
• Higher quality expectations
• Demands for better service
• More choice and variety
• Rapidly developing technologies
• Frequent new product/service
introduction
• Increased ethical sensitivity
• Environmental impacts are more
transparent
• More legal regulation
• Greater security awareness
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Prompting operations responses . . .
For example,
• Globalization of operations networking
• Information-based technologies
• Internet-based integration of operations
activities
• Supply chain management
• Customer relationship management
• Flexible working patterns
• Mass customization
• Fast time-to-market methods
• Lean process design
• Environmentally sensitive design
• Supplier ‘partnership’ and development
• Failure analysis
• Business recovery planning
The input–transformation–output process
Transformation process
model
Input resources
Outputs of goods and
services
All operations produce products and services by changing inputs into outputs using an
‘input-transformation-output’ process. Figure 1.3 shows this general transformation process
model. Put simply, operations are processes that take in a set of input resources which are
used to transform something, or are transformed themselves, into outputs of products and
services. And although all operations conform to this general input–transformation–output
model, they differ in the nature of their specific inputs and outputs. For example, if you
stand far enough away from a hospital or a car plant, they might look very similar, but move
closer and clear differences do start to emerge. One is a manufacturing operation producing
‘products’, and the other is a service operation producing ‘services’ that change the physiological
or psychological condition of patients. What is inside each operation will also be
Figure 1.3 All operations are input–transformation–output processes