“Understanding Operations Management”
The Open University (2011)
3 The transformation model
3.1 The transformation model
The discussion above has highlighted the role of operations in creating and delivering the goods
and services produced by an organization for its customers. This section introduces the
transformation model for analyzing operations. This is shown in Figure 1, which represents the
three components of operations: inputs, transformation processes and outputs. 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). This basic
transformation model applies equally in manufacturing and service organizations and in both the
private and not-for-profit sectors.
Figure 1 The transformation model
Let's look at each of the components of Figure 1 in a little more detail.
3.2 Inputs
Some inputs are used up in the process of creating goods or services; others play a part in the
creation process but are not used up. To distinguish between these, input resources are usually
classified as:
∙ 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.
Inputs include different types of both transformed and transforming resources. Three
types of resource that may be transformed in operations are:
∙ materials – the physical inputs to the process
∙ information that is being processed or used in the process
∙ customers – the people who are transformed in some way.
Source URL: http://www.open.edu/openlearn/money-management/management/leadership-and-management/understanding-operations
management/content-section-0
Saylor URL: http://www.saylor.org/courses/BUS300/#1.3
, Attributed to: The Open University Saylor.org Page 1 of 5
Many people think of operations as being mainly about the transformation of materials or
components into finished products, as when limestone and sand are transformed into glass or an
automobile is assembled from its various parts. But all organizations that produce goods or
services transform resources: many are concerned mainly with the transformation of information
(for example, consultancy firms or accountants) or the transformation of customers (for example,
hairdressing or hospitals).
Galloway (1998) defines operations as all the activities concerned with the transformation of
materials, information or customers.
The two types of transforming resource are:
∙ staff – the people involved directly in the transformation process or supporting it ∙
facilities – land, buildings, machines and equipment.
The staff involved in the transformation process may include both people who are directly
employed by the organization and those contracted to supply services to it. They are sometimes
described as ‘labor’. The facilities of an organization – including buildings, machinery and
equipment – are sometimes referred to as ‘capital’. Operations vary greatly in the mix of labor
and capital that make up their inputs. Highly automated operations depend largely on capital;
others rely mainly on labor.
Activity 4
Identify the principal inputs (both transformed and transforming resources) used by each of the
following organizations, and their principal outputs.
Organization Inputs Outputs
Restaurant
University
Doctor's surgery
Nuclear fuel reprocessing plant
Source URL: http://www.open.edu/openlearn/money-management/management/leadership-and-management/understanding-operations
management/content-section-0
Saylor URL: http://www.saylor.org/courses/BUS300/#1.3
The Open University (2011)
3 The transformation model
3.1 The transformation model
The discussion above has highlighted the role of operations in creating and delivering the goods
and services produced by an organization for its customers. This section introduces the
transformation model for analyzing operations. This is shown in Figure 1, which represents the
three components of operations: inputs, transformation processes and outputs. 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). This basic
transformation model applies equally in manufacturing and service organizations and in both the
private and not-for-profit sectors.
Figure 1 The transformation model
Let's look at each of the components of Figure 1 in a little more detail.
3.2 Inputs
Some inputs are used up in the process of creating goods or services; others play a part in the
creation process but are not used up. To distinguish between these, input resources are usually
classified as:
∙ 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.
Inputs include different types of both transformed and transforming resources. Three
types of resource that may be transformed in operations are:
∙ materials – the physical inputs to the process
∙ information that is being processed or used in the process
∙ customers – the people who are transformed in some way.
Source URL: http://www.open.edu/openlearn/money-management/management/leadership-and-management/understanding-operations
management/content-section-0
Saylor URL: http://www.saylor.org/courses/BUS300/#1.3
, Attributed to: The Open University Saylor.org Page 1 of 5
Many people think of operations as being mainly about the transformation of materials or
components into finished products, as when limestone and sand are transformed into glass or an
automobile is assembled from its various parts. But all organizations that produce goods or
services transform resources: many are concerned mainly with the transformation of information
(for example, consultancy firms or accountants) or the transformation of customers (for example,
hairdressing or hospitals).
Galloway (1998) defines operations as all the activities concerned with the transformation of
materials, information or customers.
The two types of transforming resource are:
∙ staff – the people involved directly in the transformation process or supporting it ∙
facilities – land, buildings, machines and equipment.
The staff involved in the transformation process may include both people who are directly
employed by the organization and those contracted to supply services to it. They are sometimes
described as ‘labor’. The facilities of an organization – including buildings, machinery and
equipment – are sometimes referred to as ‘capital’. Operations vary greatly in the mix of labor
and capital that make up their inputs. Highly automated operations depend largely on capital;
others rely mainly on labor.
Activity 4
Identify the principal inputs (both transformed and transforming resources) used by each of the
following organizations, and their principal outputs.
Organization Inputs Outputs
Restaurant
University
Doctor's surgery
Nuclear fuel reprocessing plant
Source URL: http://www.open.edu/openlearn/money-management/management/leadership-and-management/understanding-operations
management/content-section-0
Saylor URL: http://www.saylor.org/courses/BUS300/#1.3
