Operations Management
Chapter 1 Operations management and performance
What is Operations Management?
-Operations Management is the activity of managing the resources that create and deliver services
and products.
-service/ product continuum:
Why is Operations Management important
to an organization’s performance?
-Performance at three levels:
The broad, societal level, using
the idea of the ‘triple bottom
line’.
The strategic level, how an
operation can contribute to the
organization’s overall strategy.
The operational level, using the
five operation’s performance
objectives.
,-Strategic level entails the following:
Cost -> operation activities have an effect on costs.
Revenue -> high-quality, error-free products are likely to have a higher sales price than bad
products.
Required level of investment -> producing more output with the same resources affects the
required level of investment.
Risk of operational failure -> in case of failure, well-run operations should be able to recover
faster with less disruption.
Building the capabilities for future innovation -> learn more
-Operations performance at an operational level:
Quality -> producing services and products consistently to specification.
Speed -> The elapsed time between customers requesting services or products and their
receiving them. It can also decrease storage costs.
Dependability -> Doing things in time so customers can receive services or products exactly
when they are needed, or at least when they are promised.
Flexibility -> Being able to change the operations in some way. Flexible operations can switch
between activities without wasting time and money, they can keep on schedule when
unexpected events disrupt the operations plans which in the long run can also save costs.
Cost -> lower the cost, lower the sales price can be.
What is the processes hierarchy?
-The hierarchy of operations allows the input- transformation-output model to be used at a number of
“different levels of analysis”. This analysis is on:
The supply network;
The operation;
The process.
-Operations can be divided into 2 meanings:
Operations as a function, meaning the part of the organization that creates and delivers
services and products for the organization’s external customer.
Operations as an activity, meaning the management of the processes within any of the
organization’s function.
,
, How do operations and processes differ?
-Operations differ when you look at the 4V’s:
Volume of their output;
Variety of their output;
Variation in the demand of their output;
Visibility that customers have of the creation of their output.
-Some operations are both high- and low-visibility for example airport.
What do operations managers do?
-Operation managers do:
Directing the overall strategy of the operation.
Designing the operation’s processes.
Planning and control process delivery.
Developing process performance.
Chapter 2 Operations strategy
What is strategy and what is operations strategy?
-Operations strategy concerns the pattern of strategic decisions and actions that set the role,
objectives and activities of the operation.
-Operations are the resources that create products and services.
-Operational is the opposite of strategic, meaning day-to-day and detailed.
-The process of operations strategy is the method that is used to make those specific ‘content’
decisions.
Chapter 1 Operations management and performance
What is Operations Management?
-Operations Management is the activity of managing the resources that create and deliver services
and products.
-service/ product continuum:
Why is Operations Management important
to an organization’s performance?
-Performance at three levels:
The broad, societal level, using
the idea of the ‘triple bottom
line’.
The strategic level, how an
operation can contribute to the
organization’s overall strategy.
The operational level, using the
five operation’s performance
objectives.
,-Strategic level entails the following:
Cost -> operation activities have an effect on costs.
Revenue -> high-quality, error-free products are likely to have a higher sales price than bad
products.
Required level of investment -> producing more output with the same resources affects the
required level of investment.
Risk of operational failure -> in case of failure, well-run operations should be able to recover
faster with less disruption.
Building the capabilities for future innovation -> learn more
-Operations performance at an operational level:
Quality -> producing services and products consistently to specification.
Speed -> The elapsed time between customers requesting services or products and their
receiving them. It can also decrease storage costs.
Dependability -> Doing things in time so customers can receive services or products exactly
when they are needed, or at least when they are promised.
Flexibility -> Being able to change the operations in some way. Flexible operations can switch
between activities without wasting time and money, they can keep on schedule when
unexpected events disrupt the operations plans which in the long run can also save costs.
Cost -> lower the cost, lower the sales price can be.
What is the processes hierarchy?
-The hierarchy of operations allows the input- transformation-output model to be used at a number of
“different levels of analysis”. This analysis is on:
The supply network;
The operation;
The process.
-Operations can be divided into 2 meanings:
Operations as a function, meaning the part of the organization that creates and delivers
services and products for the organization’s external customer.
Operations as an activity, meaning the management of the processes within any of the
organization’s function.
,
, How do operations and processes differ?
-Operations differ when you look at the 4V’s:
Volume of their output;
Variety of their output;
Variation in the demand of their output;
Visibility that customers have of the creation of their output.
-Some operations are both high- and low-visibility for example airport.
What do operations managers do?
-Operation managers do:
Directing the overall strategy of the operation.
Designing the operation’s processes.
Planning and control process delivery.
Developing process performance.
Chapter 2 Operations strategy
What is strategy and what is operations strategy?
-Operations strategy concerns the pattern of strategic decisions and actions that set the role,
objectives and activities of the operation.
-Operations are the resources that create products and services.
-Operational is the opposite of strategic, meaning day-to-day and detailed.
-The process of operations strategy is the method that is used to make those specific ‘content’
decisions.
