Summary MNB1601 NOTES OPERATIONS MANAGEMENT

MNB1601 NOTES OPERATIONS MANAGEMENT The operations function is that function of the business aimed at executing the transformation process. The importance of operations management:  It can reduce the cost of making products or offering services  It can increase the revenue the business receives for offering its products and services to its customers/clients  It can reduce the amount of investment (capital) needed to manufacture the type and quantity of products or to offer the service required/  It can provide the impetus for new innovation by using its solid base of operational skills and knowledge to develop new products and services Other reasons Op’s Management are important to a business:  Operations management can improve productivity  Operations management can help a business to satisfy the needs of its customers/clients more effectively  Operations management can be decisive for the general reputation of the business Defining terms used in operations management:  The operations function is that function in the business primarily aimed at the utilisation of resources to manufacture products or render services.  Operations management involves operations managers’ activities, decisions and responsibilities that tie in with the execution of the operations function. Operation-management strategies and performance objectives: All businesses formulate business objectives, and if a business intends surviving in the long term, consumers who are satisfied with the business’s products or services should be a toppriority objective. Although there are numerous customer needs that can be reduced to 6 main elements:  Higher quality  Lower costs  Shorter lead time (quicker manufacturing or provision of services)  Greater adaptability (flexibility)  Lower variability with regard to specifications (reliability)  High level of service (better overall service). With these 6 customer/client requirements as a basis, operations management performance objectives can be formulated to give the business an “operations-cased advantage” over other businesses. Operations management performance objectives must indicate the specific areas with the domain of the operations function that will be emphasised when products and/or services are produced or provided. The operations-management