Role of Operations Management Flashcards
Define Operations
the business function concerned with the transformation of inputs into outputs
What are the two goals of operations?
Cost Leadership & Product Differentiation
Define Cost Leadership Strategy
one in which a business aims to be the lowest-cost manufacturer within its industry
Features of Cost Leadership Strategy
The products will have fewer features/lower quality
The business will attempt to make a small profit margin on each item, selling a large volume
Define Good/Service Differentiation
attempting to achieve a greater market share by producing a product different from competitors
Forms of Good/Service Differentiation
Custom Designed Products
More Features & Applications
Greater Reliability
Better Quality
Faster Delivery
Features of Manufactured Goods
Outputs are tangible
Production is capital-intensive
Outputs can be stored before sale
Once made, they are difficult to change or customise
Productivity is easy to measure
Features of Services
Outputs are intangible
Production is often labour-intensive
Requires interaction with customers
Outputs are easy to modify/customise
Productivity is difficult to measure
Define Interdependence
the reliance of different parts of an organisation on each other to perform their task or role
Relationship between Operations & Marketing
Market Research identifies the features of a good that consumers desire
Marketing may require innovation from operations
Relationship between Operations & Finance
Operations will seek to keep under budget to maximise profit
Finance will collect data and analyse the financial performance of operations
Relationship between Operations & Human Resources
HR will supply operations with appropriate employees
HR will ensure employees are motivated & receive proper training
