OPERATIONS MANAGEMENT
➢ “To manage is to forecast and plan, to organize, to
Module 1 - Operations Management & Operations
compound, to co-ordinate and to control” (Henry
Strategy
Fayol)
Strategy can be seen to exist at three main levels:
Corporate Level
➢ at the highest level, the strategy provides very
general long-range guidance for the whole
organization, often expressed as a statement of its
mission.
➢ mission statement describes in general terms
what key decision-makers want the company to
accomplish and what kind of company they want it
Operations Management
become.
➢ is the activity of managing the resources which
Business Strategy
produce and deliver goods & services (Slack et
➢ second level, concern with the products and
al.,2010)
services that could be offered in the market defined
➢ the operation function can be described as that
at the corporate level.
part of the organization devoted to the production or
Operational/Functional Strategy
delivery of goods and services.
➢ were the functions of the business make
➢ this means all organizations undertake operations
long-range plans which support the business
activities because every organization produces goods
strategy.
or services.
Operations Competitive Priorities
Organizations can be classified in to two categories:
Cost
Manufacturing Organizations (can be stored)
➢ if an organization is competing on price then its
➢ produce physical, tangible items which can be
essential that it keeps its cost base lower than the
stored as inventory before delivery to the customer.
competition.
Service Organizations (can’t be stored)
➢ important for a strategy of providing a product to
➢ produce intangible items that cannot be produced
a market niche.
ahead of time.
➢ Categories of cost - staff, facilities, materials
Time
INPUT PROCESS OUTPUT
➢ time delay or speed of operation can be
measured as the time between customer request
Management input Managing Process Managing Outputs
and receiving.
resources
➢ important factor to the customer in making a
Facilities, Process flow, Products and services,
choice about which organization to use.
➢ speed can be used to both reduce costs and
Equipment, Staff, work-in-progress, process customer satisfaction,
reduce delivery time.
Customers, design, planning & unit costs,
Quality
Supplier, Transport, scheduling, progressing & environmental impact
➢ covers both the quality of the product/service
Materials, Energy, control, system
itself and the quality of the process that delivers the
Information improvement
product/service.
Flexibility
➢ it can mean the ability to offer a wide variety of
Strategy products/services to the customer.
➢ can be classified as those decisions which make ➢ to be able to change these products/services
major long term changes. quickly.
➢ occur as a result of an evaluation of the external ➢ it is needed can adapt to changing customer
and internal environment. needs.
External Evaluation ➢ types of flexibility
➢ may reveal market opportunities or threats from *product flexibility - the ability to be able to
competitors. quickly act in response to changing customer needs
*volume flexibility - the ability to be able to
➢ “To manage is to forecast and plan, to organize, to
Module 1 - Operations Management & Operations
compound, to co-ordinate and to control” (Henry
Strategy
Fayol)
Strategy can be seen to exist at three main levels:
Corporate Level
➢ at the highest level, the strategy provides very
general long-range guidance for the whole
organization, often expressed as a statement of its
mission.
➢ mission statement describes in general terms
what key decision-makers want the company to
accomplish and what kind of company they want it
Operations Management
become.
➢ is the activity of managing the resources which
Business Strategy
produce and deliver goods & services (Slack et
➢ second level, concern with the products and
al.,2010)
services that could be offered in the market defined
➢ the operation function can be described as that
at the corporate level.
part of the organization devoted to the production or
Operational/Functional Strategy
delivery of goods and services.
➢ were the functions of the business make
➢ this means all organizations undertake operations
long-range plans which support the business
activities because every organization produces goods
strategy.
or services.
Operations Competitive Priorities
Organizations can be classified in to two categories:
Cost
Manufacturing Organizations (can be stored)
➢ if an organization is competing on price then its
➢ produce physical, tangible items which can be
essential that it keeps its cost base lower than the
stored as inventory before delivery to the customer.
competition.
Service Organizations (can’t be stored)
➢ important for a strategy of providing a product to
➢ produce intangible items that cannot be produced
a market niche.
ahead of time.
➢ Categories of cost - staff, facilities, materials
Time
INPUT PROCESS OUTPUT
➢ time delay or speed of operation can be
measured as the time between customer request
Management input Managing Process Managing Outputs
and receiving.
resources
➢ important factor to the customer in making a
Facilities, Process flow, Products and services,
choice about which organization to use.
➢ speed can be used to both reduce costs and
Equipment, Staff, work-in-progress, process customer satisfaction,
reduce delivery time.
Customers, design, planning & unit costs,
Quality
Supplier, Transport, scheduling, progressing & environmental impact
➢ covers both the quality of the product/service
Materials, Energy, control, system
itself and the quality of the process that delivers the
Information improvement
product/service.
Flexibility
➢ it can mean the ability to offer a wide variety of
Strategy products/services to the customer.
➢ can be classified as those decisions which make ➢ to be able to change these products/services
major long term changes. quickly.
➢ occur as a result of an evaluation of the external ➢ it is needed can adapt to changing customer
and internal environment. needs.
External Evaluation ➢ types of flexibility
➢ may reveal market opportunities or threats from *product flexibility - the ability to be able to
competitors. quickly act in response to changing customer needs
*volume flexibility - the ability to be able to
