Introduction to Operations Management Flashcards
Definition of OM
Operations Management provides a systematic framework
to analyse and develop the operations through which a
firm produces and delivers its primary goods and services.
Defining Operations
The term ‘operations’ refers to the processes by which
people, capital, and material (inputs) are combined to
produce the services and goods we consume (outputs)
input + operations + output =
people,
capital, and
material + Production
processes + Goods and
services
Defining Processes
By process, we mean an organised group of related tasks
and activities that work together to transform inputs in
outputs that create value for customers
Examples of operations
1 - back office of a bank
2 - Kitchen unit
manufacturing
operation
3 - Retail
operation
4 - Take-out /
restaurant
operation
What four advantages can an effective operation provide to a business?
An effective operation can:
(1) - Reduce costs of producing products and services.
(2) - Increase revenue by improving customer satisfaction through quality and service.
(3) - Reduce investment by increasing effective operational capacity.
(4) - Provide a basis for future innovation by developing strong operational skills and knowledge.
Operations Management Principles
1- Managing operations
2 - distribution and logistics
3- operations planning
4- Manufacturing Management
5 - inventory management
What are the four key operational process characteristics?
1- Volume: The level or rate of output from a process.
2 - Variety: The range of different products and services produced by a process.
3 - Variation: The degree to which the rate or level of output changes over time due to external factors (demand variation).
4 - Visibility: The amount of value-added activity that takes place in the presence of the customer.
low volume (Characteristics of Operations Process) =
low repetition
each staff member performs more of the job
less systemisation
high unit cost
High volume (Characteristics of Operations Process) =
high repeatability
specialisation
systemisation
capital intensive
low unit cost
High variety ( Characteristics of Operations Process) =
flexible
complex
match customer needs
high unit cost
Low variety ( Characteristics of Operations Process)=
well defined
routine
standardised
regular
low unit cost
High variation (Characteristics of Operations Process) =
changing capacity
anticipation
flexibility
in touch with demand
high unit cost
Low variation (Characteristics of Operations Process) =
stable
routine
predictable
high utilisation
low unit cost
High visibility (Characteristics of Operations Process) =
Short waiting tolerance
Satisfaction governed by customers perception
Customer contact skills need
Received variety is high
High unit cost
Low visibility (Characteristics of Operations Process) =
Time lag between productions and consumption
Standardised
Low contact skills
High staff utilisation
Centralisation
Low unit cost s
What is the goal of operations strategy, and what approaches does it include?
The goal of operations strategy is to improve operations performance over time by focusing on managing operations processes systematically over the long term.
Approaches include:
Top-down
Bottom-up
Resources perspective
Market perspective
Operations Strategy. 1/4 perspectives - Top down perspective
Top down perspective - what the business want operation do ?
Operations Strategy. 2/4 perspectives -Market requirement perspective
Market requirement perspective - what the market position requires operations to do
Operations Strategy. 3/4 perspectives -Bottom-up perspective
Bottom-up perspective - what day to day experience suggests operations should do
Operations Strategy. 4/4 perspectives -Resources perspective
Resources perspective
- what the operation’s resources can do ?
