Operations ManagementOperations management is the management of processes that transform inputs into goods and services that add value for the customer. Show
Learning Objectives Explain the role of operations management Key TakeawaysKey Points
Key Terms
What is Operations Management?Operations management is the management of processes that transform inputs into goods and services that add value for the customer. The Goal of Operations Management The goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs.
If the organization makes good operations decisions, it will be able to produce affordable, functional, and attractive furniture that customers will purchase at a price that will earn profits for the company. The Role of Operations Management in the OrganizationOperations is one of the three strategic functions of any organization. This means that it is a vital part of accomplishing the organization's strategy and ensuring its long-term survival. The other two areas of strategic importance to the organization are marketing and finance. The operations strategy should support the overall organization strategy. Many companies prepare a 5-year pro-forma to assist in their operation planning. The pro forma uses information from past and current financial statements in an effort to predict future events such as sales, and capital investments. Strategic Versus Tactical Operations Decisions Operations decisions include decisions that are strategic in nature, meaning that they have long-term consequences and often involve a great deal of expense and resource commitments.
Tactical operations decisions have short to medium term impact on the organization, often involve less commitment of resources, and can be changed more easily than strategic decisions. The following are some tactical decisions:
Strategic and tactical operations decisions determine how well the organization can accomplish its goals. They also provide opportunities for the organization to achieve unique competitive advantages that attract and keep customers.
Under this traditional approach, the total time to get a laptop computer repaired was two weeks—a long time for people to be without their laptop! Then they came
up with an innovative idea for Toshiba to provide better service to its customers.
The total time to get a computer repaired is now about two days.  Operations Management: Blueprint for a commercial operations management solution. A Study of ProcessOperations management transforms inputs (labor, capital) into outputs (goods and services) that provide added value to customers. Learning Objectives Analyze the importance of operations management in protecting an organization's competitive advantage Key TakeawaysKey Points
Key Terms
Operations Management and the Transformation Process Operations management transforms inputs (labor, capital, equipment, land, buildings, materials and information) into outputs (goods and services) that provide added value to customers. Example: Strategic Importance of Operations Management The 3M Company is a good example of the strategic importance of transforming inputs into outputs that provide
competitive advantage in the marketplace.
For several
decades, 3M has enjoyed a substantial profit margin on its Magic Tape product because 3M engineers make the manufacturing equipment and design the manufacturing processes that produce Magic Tape. In other words, 3M enjoys a commanding competitive advantage by controlling the transformation processes that turn raw material inputs into the high value-added Magic Tape product. Example of a typical transformation process Service OperationsServices operations often encounter different opportunities and challenges than tangible goods, and thus require unique operational considerations. Learning Objectives Identify the key
differences between services and other types of goods, and recognize the operational implications of these differences Key TakeawaysKey Points
Key Terms
Service operations are simply the application of operations management to an intangible good (i.e. a service). To understand how service operations function, let's first take a look at what is considered a service. Service-Goods Continuum: This simple line graph shows industries that are nearly 100% service-related at the top and industries that are nearly 100% product-related at the bottom. It is an illustration of how the service-product continuum is more of a spectrum than a black and white rule. Services DefinedAn easy way to remember what a service is (compared to a product) is through using the '5 I's of Services':
Managing Service Operations This definition offers a great deal of insight when applied to the concept of
operational management. Without a tangible good to ship, handle and produce, operational managers are instead focused on the execution of an activity to fill a consumer need. This management of an instance is rather different than the management of a product. LocationChoosing where to open a facility, how to lay out the facility, what size is appropriate, and overall how efficiently a given space can be used relative to the cost are key considerations. Consider a car mechanic opening a garage. Depending upon how many jobs she anticipates having within a given period of time, and how many employees she expects to be able to manage simultaneously, she may want to open a facility with three garages or five garages. It really depends on how much output she expects she can accomplish, and how much input demand will provide. SchedulingJust as a product manufacturing facility will know when a product will be where, so too do service operators need to know when a given service should start and what duration of time is required to complete it. Maximizing output through planning properly can minimize opportunity costs and maximize revenue, and plays an integral role in operational management of services. Take a doctor's office. If they simply had everyone come in whenever they wanted, there would be times when the staff would have nothing to do (but be obligated to be there, and be paid), and other times when there would be too much to do and capital and customers would be lost. Quality As the '5 I's of Services' indicate, most services tend to be completely unique. A hair dresser rarely gives the same
haircut twice and, even if they do, it would be cut to fit a different individual. As a result, managing for high quality output is rather complex. Each execution is measured relative to the specific instance and that specific consumer, making tools like NPS surveys and other measures of individual satisfaction highly useful in optimizing. Following these ratings, operational specialists must consider the comments received and work to find a way to integrate this feedback into future
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What is a transformation process from input to output?A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients. For example - when milk is transformed into curd, cheese, and butter. Output.
What are the input resources used in transformation process?Discussion. You may have identified various inputs such as materials, energy, machines, equipment, buildings and people. For example, the inputs used by a car assembly plant include components, equipment, buildings, labour and energy.
What is the name of the model that describes operations in terms of their input resources transforming processes and outputs of goods and services?3 The transformation model
Operations management involves the systematic direction and control of the processes that transform resources (inputs) into finished goods or services for customers or clients (outputs).
What is transforming resources in operations management?transformed resources – those that are transformed in some way by the operation to produce the goods or services that are its outputs. transforming resources – those that are used to perform the transformation process.
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What is the term used to describe an operation that uses resources to transform inputs into outputs?
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