lOMoARcPSD|16248954
Chapter 1: Operations management:
3 core functions:
• Marketing function (communicating)
• Product/service development function (creating)
• Operations function (fulfilling)
Support functions:
• The accounting and finance function
• The human resources function
Inputs to the process:
Transformed resources:
• Materials (shape, composition)
• Information
• Customers (hairdressers)
Transforming resources:
• Facilities
• Staff
(Description of difference between services and products)
Facilitating services: Services that are produced by an operation to support its products.
Facilitating products: Products that are produced by an operation to support its services.
‘’All operations are service providers.’’
Supply network: The network of supplier and customer operations that have relationships
with an operation.
Internal supplier: Processes or individuals within an operation that supply products or
services to other processes or individuals within the operation.
Internal customer: Processes or individuals within an operation who are the customers for
other internal processes or individuals’outputs.
Hierarchy of operations: The idea that all operations processes are made up of smaller
operations process.
‘’Operations management is relevant to all parts of the business’’
Two meanings of operations:
• Operations as a function
• Operations as an activity
‘End-to-end’business processes: Processes that totally fulfill a defined external customer
need.
Business process reengineering: The philosophy that recommends the redesign of processes
to fulfill defined external customer needs.
Different characteristics of operations processes:
• Volume: repeatability, systemization.
• Variety: Standardization, flexible
• Variation: variation in demand
, lOMoARcPSD|16248954
• Visibility: process exposure
Front office: The high visibility part of an operation
Back office: The low visibility part of an operation
Activities that apply to all types of operation:
• Understanding the operation’s strategic objectives
• Developing an operations strategy for the organization
• Designing an operations strategy for the organization
• Planning and controlling the operation
• Improving the performance of the operation
• The broad responsibilities of operations management
Why is operations management important?
• Reduce costs
• Increase revenue
• Reduce the amount of investment
• Provide the basis for future innovation
➔ More profitability!
Operations management:
• Operations strategy
• Improvement
• Planning and control
• Design
Operations strategy:
• The operation’s strategic objectives
• The operation’s competitive role and position
• Improvement
• Operations strategy
Summary page 25,
Chapter 2: The strategic role and objectives of operations
‘’Operations management can ‘make or break’ any business’’
‘’Operations should implement, support and drive strategy’’
Four stages of operations contribution:
1. Internal neutrality (avoiding making mistakes)
2. External neutrality (trying to implement ‘best practice’)
3. Internally supportive (providing a credible strategy)
4. Externally supportive (innovative, creative and proactive, one step ahead competitors)
Five basic ‘performance objectives’: (can be added value)
• Quality
• Speed (time between requesting and receiving)
• Dependability
• Flexibility
, 16248954lOMoARcPSD|
• Cost (advantage)
Quality is a major influence on customer satisfaction or dissatisfaction
➔ Quality reduces costs
➔ Quality increases dependability
➔ Speed reduces inventories
➔ Speeds reduces risks
➔ Dependability saves time
➔ Dependability saves money
➔ Dependability gives stability
➔ Agility: the ability to respond quickly and at low cost as market requirements change.
➔ Flexibility speeds up response
➔ Flexibility saves time
➔ Flexibility maintains dependability
Productivity: Output from the operation/Input to the operation
Single factor productivity: Output from the operation/One input to the operation
Multi-factor productivity: Output from the operation/All inputs to the operation
➔ Improving productivity
➔ Cost reduction through internal effectiveness
Chapter 3: Operations strategy
Strategic decisions: Those which are widespread in their effect, define the position of the
organization relative to its environment and move the organization closer to its long-term
goals.
‘Operations’are the resources that create products and services.
‘Operational’is the opposite of strategic, meaning day-to-day and detailed.
, lOMoARcPSD|16248954
Perspectives of operations strategy:
Top-down: The influence of the corporate or business strategy on operations decisions (what
the business wants operations to do).
• Corporate strategy: The strategic positioning of a corporation and the businesses
with it.
• Business strategy: The strategic positioning of a business in relation to its customers,
markets and competitors; a subset of corporate strategy.
• Functional strategy: The overall direction and role of a function within the business;
a subset of business strategy.
Bottom-up: The influence of operational experience on operations decision (What day-to-day
experience suggests operations should do).
• Emergent strategy: A strategy that is gradually shaped over time and based on
experience rather than theoretical positioning.
Market requirements: The performance objectives that inflect the market position of an
operation’s products or services, also a perspective on operations strategy (What the market
position requires operations to do).
• Competitive factors: The factors such as delivery time, product or service
specification, prices, etc. that define customers’requirements.
• Order-winning factors: The arrangement of resources that are devoted to the
production and delivery of products and services. (The factors with which you can win
new customers)
• Qualifying factors: Aspects of competitiveness where the operation’s performance
has to be above a particular level to be considered by the customer.
Operations resource capabilities: The inherent ability of operations processes and resources;
also a perspective on operations strategy (What operations resources can do).
• Resource-based view (RBV): The perspective on strategy that stresses the importance
of capabilities (sometimes known as core competences) in determining sustainable
competitive advantage.
The process of operations strategy:
Implementation: The five Ps
1. Purpose: duidelijkheid
2. Point of entry: support
3. Process
4. Project management
5. Participation
The process of operations strategy guides the trade-offs between performance
objectives:
• The strategy should address the relative priority of the operation’s performance
objectives.
• Operations strategy influences the trade-off between an operation’s
performance.
• variety against cost efficiency!
An operations strategy should be:
• Appropriate
• Comprehensive
Chapter 1: Operations management:
3 core functions:
• Marketing function (communicating)
• Product/service development function (creating)
• Operations function (fulfilling)
Support functions:
• The accounting and finance function
• The human resources function
Inputs to the process:
Transformed resources:
• Materials (shape, composition)
• Information
• Customers (hairdressers)
Transforming resources:
• Facilities
• Staff
(Description of difference between services and products)
Facilitating services: Services that are produced by an operation to support its products.
Facilitating products: Products that are produced by an operation to support its services.
‘’All operations are service providers.’’
Supply network: The network of supplier and customer operations that have relationships
with an operation.
Internal supplier: Processes or individuals within an operation that supply products or
services to other processes or individuals within the operation.
Internal customer: Processes or individuals within an operation who are the customers for
other internal processes or individuals’outputs.
Hierarchy of operations: The idea that all operations processes are made up of smaller
operations process.
‘’Operations management is relevant to all parts of the business’’
Two meanings of operations:
• Operations as a function
• Operations as an activity
‘End-to-end’business processes: Processes that totally fulfill a defined external customer
need.
Business process reengineering: The philosophy that recommends the redesign of processes
to fulfill defined external customer needs.
Different characteristics of operations processes:
• Volume: repeatability, systemization.
• Variety: Standardization, flexible
• Variation: variation in demand
, lOMoARcPSD|16248954
• Visibility: process exposure
Front office: The high visibility part of an operation
Back office: The low visibility part of an operation
Activities that apply to all types of operation:
• Understanding the operation’s strategic objectives
• Developing an operations strategy for the organization
• Designing an operations strategy for the organization
• Planning and controlling the operation
• Improving the performance of the operation
• The broad responsibilities of operations management
Why is operations management important?
• Reduce costs
• Increase revenue
• Reduce the amount of investment
• Provide the basis for future innovation
➔ More profitability!
Operations management:
• Operations strategy
• Improvement
• Planning and control
• Design
Operations strategy:
• The operation’s strategic objectives
• The operation’s competitive role and position
• Improvement
• Operations strategy
Summary page 25,
Chapter 2: The strategic role and objectives of operations
‘’Operations management can ‘make or break’ any business’’
‘’Operations should implement, support and drive strategy’’
Four stages of operations contribution:
1. Internal neutrality (avoiding making mistakes)
2. External neutrality (trying to implement ‘best practice’)
3. Internally supportive (providing a credible strategy)
4. Externally supportive (innovative, creative and proactive, one step ahead competitors)
Five basic ‘performance objectives’: (can be added value)
• Quality
• Speed (time between requesting and receiving)
• Dependability
• Flexibility
, 16248954lOMoARcPSD|
• Cost (advantage)
Quality is a major influence on customer satisfaction or dissatisfaction
➔ Quality reduces costs
➔ Quality increases dependability
➔ Speed reduces inventories
➔ Speeds reduces risks
➔ Dependability saves time
➔ Dependability saves money
➔ Dependability gives stability
➔ Agility: the ability to respond quickly and at low cost as market requirements change.
➔ Flexibility speeds up response
➔ Flexibility saves time
➔ Flexibility maintains dependability
Productivity: Output from the operation/Input to the operation
Single factor productivity: Output from the operation/One input to the operation
Multi-factor productivity: Output from the operation/All inputs to the operation
➔ Improving productivity
➔ Cost reduction through internal effectiveness
Chapter 3: Operations strategy
Strategic decisions: Those which are widespread in their effect, define the position of the
organization relative to its environment and move the organization closer to its long-term
goals.
‘Operations’are the resources that create products and services.
‘Operational’is the opposite of strategic, meaning day-to-day and detailed.
, lOMoARcPSD|16248954
Perspectives of operations strategy:
Top-down: The influence of the corporate or business strategy on operations decisions (what
the business wants operations to do).
• Corporate strategy: The strategic positioning of a corporation and the businesses
with it.
• Business strategy: The strategic positioning of a business in relation to its customers,
markets and competitors; a subset of corporate strategy.
• Functional strategy: The overall direction and role of a function within the business;
a subset of business strategy.
Bottom-up: The influence of operational experience on operations decision (What day-to-day
experience suggests operations should do).
• Emergent strategy: A strategy that is gradually shaped over time and based on
experience rather than theoretical positioning.
Market requirements: The performance objectives that inflect the market position of an
operation’s products or services, also a perspective on operations strategy (What the market
position requires operations to do).
• Competitive factors: The factors such as delivery time, product or service
specification, prices, etc. that define customers’requirements.
• Order-winning factors: The arrangement of resources that are devoted to the
production and delivery of products and services. (The factors with which you can win
new customers)
• Qualifying factors: Aspects of competitiveness where the operation’s performance
has to be above a particular level to be considered by the customer.
Operations resource capabilities: The inherent ability of operations processes and resources;
also a perspective on operations strategy (What operations resources can do).
• Resource-based view (RBV): The perspective on strategy that stresses the importance
of capabilities (sometimes known as core competences) in determining sustainable
competitive advantage.
The process of operations strategy:
Implementation: The five Ps
1. Purpose: duidelijkheid
2. Point of entry: support
3. Process
4. Project management
5. Participation
The process of operations strategy guides the trade-offs between performance
objectives:
• The strategy should address the relative priority of the operation’s performance
objectives.
• Operations strategy influences the trade-off between an operation’s
performance.
• variety against cost efficiency!
An operations strategy should be:
• Appropriate
• Comprehensive
