Chapter 1: Operations Management
What is Operations Management?
Operations management is the activity of managing the resources that create and deliver services
and products.
Operations Function
The operations function is central to the organization because it creates and delivers services and
products, which is its reason for existing. The operations function is one of the three core functions
of any organization. These are:
- The marketing (including sales) function: Which is responsible for communicating the
organization’s services and products to its markets in order to generate customer requests
- The product/service development function: Which is responsible for coming up with new
and modified services and products in order to generate future customer requests
- The Operations function: Which is responsible for the creation and delivery of services and
product based on customer requests
The input-transformation-output process
All operations create and deliver services and products by changing inputs into outputs using an
‘input-transformation-output’ process. Figure 1.3 shows this general transformation process model.
Put simply, operations are processes that take in a set of input resources which are used to transform
something, or are transformed themselves, into outputs of services and products.
All operations can be modelled as input-transformation-output processes. They all have inputs of
transforming resouces, which are usually divided into ‘facilities’ and ‘staff’, and transformed
resouces, which are some mixture of materials, information and customers.