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Part One
Introduction
➤ Why is operations management important in all types of organization?
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Operations management uses the organization’s resources to create outputs that fulfil defined
market requirements. This is the fundamental activity of any type of enterprise.
Operations management is increasingly important because today’s business environment requires
new thinking from operations managers.
➤ What is the input–transformation–output process?
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All operations can be modelled as input–transformation–output processes. They all have inputs
of transforming resources, which are usually divided into ‘facilities’ and ‘staff’, and transformed
resources, which are some mixture of materials, information and customers.
Few operations produce only products or only services. Most produce some mixture of tangible
goods or products and less tangible services.
➤ What is the process hierarchy?
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All operations are part of a larger supply network which, through the individual contributions of
each operation, satisfies end-customer requirements.
All operations are made up of processes that form a network of internal customer–supplier
relationships within the operation.
End-to-end business processes that satisfy customer needs often cut across functionally based
processes.
➤ How do operations processes have different characteristics?
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Operations differ in terms of the volume of their outputs, the variety of outputs, the variation in
demand for their outputs, and the degree of ‘visibility’ they have.
High volume, low variety, low variation and low customer ‘visibility’ are usually associated with
low cost.
➤ What are the activities of operations management?
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Responsibilities include understanding relevant performance objectives, setting an operations
strategy, the design of the operation (products, services and processes), planning and controlling
the operation, and the improvement of the operation over time.
Operations managers also have a set of broad societal responsibilities. These are generally
called ‘corporate social responsibility’ or CSR objectives.