Topic 1 Study unit 1 The operations management function Flashcards
The three major contribution of the operations management function:
Productivity
Satisfactory
Reputation
Productivity
One of the main contributions that the operations management function can make to the business is that of increased productivity. Productivity (among other things) improves when fewer inputs are used to produce the same outputs, or more outputs are produced with the same inputs. So obviously the more efficient the transformation or conversion process, the higher the productivity.
Satisfaction
The second major contribution of the operations management function is to ensure that customers/clients are satisfied with the product and/or service for which they pay or, as in the case of the most successful businesses, exceptional! Functions like finance, human resources and purchasing, important as they are, do not directly satisfy the needs of the customer/client. Only operations management can do this, because it manages the busi- ness functions that design, plan and control, and it improves the operations processes which physically manufacture the products or are actually involved in rendering the services.
Reputation
The third major contribution of the operations management function is closely linked to the second one mentioned above: if the product or service quality is poor, the business will get a bad reputation among not only its direct customers/clients but also the general public; consequently, it may lose a great deal of business.
What is the operations management model?
The operations management model is a diagrammatic representation of the main distinguishable components which are necessary in a process of manufacturing and/or service providing.
What is the operations management model made up of?
It is made up of a basic input-transformation-output model which is driven by the operations management strategies and objectives which must satisfy customer/client needs and requirements through the means acquired by the operations activities of design, planning and control, and improvement.
A classification system is proposed for both manufacturers and service providers based on
Two dimensions of volume (number or quantity of products produced or clients serviced) and variety (range of products or options to choose from) of products/ services.
On both dimensions, values of high and low and high-low combinations will represent different types of operations processes.
A project system
A project system is relatively easy to understand. It encompasses something that is normally only done once. For example, to build a house designed by an architect is a project because it is built only once, and no other house is likely to be exactly the same.
A project is therefore a unique type of production – and usually it embodies a major effort either in terms of size, or length of time needed to complete.
Multiple-unit project system
Further to the project system mentioned above, where several houses of similar design are built, we have the first type of hybrid system previously mentioned, namely between a project and a repetitive system. This is referred to as a multiple-unit project system.
A job system
A job system refers to a single task on a small scale or in small volume which has a definite individual uniqueness to it. A printing shop uses this type of system. Each printing job, say for a business card, is unique in the sense that it has its own wording, font style, paper type, colours, and so on.
A job-lot system
Further to the job system mentioned above, as soon as the range of a similar type of products increases – like a magazine printer – the job system starts to resemble that of a repetitive system. The second type of hybrid system is then applicable, namely that of a job-lot system.
A repetitive operations system
A repetitive operations system is one in which the same product (or range of very similar type of products) is produced many times over. Most factories are examples of this: for example, where the same model vehicle is manufactured by means of a process that is repeated over and over again and could go on for many years until a new model is introduced.
Continuous operations system
Also similar to this type of operation, a continuous operations system is one in which exactly the same product is produced continually “forever”. For example, a power utility company produces the same “product” (electricity) on such a basis.
A professional service
A professional service is characterised by low volume – each individual client requires service according to his or her own needs but with more variety of service on offer as a result.
A mass service
A mass service represents operations for services which are similar to mass product producers – the service is rather standardised with less variety, but high volume.
A service shop
A service shop falls in between the characteristics of the professional service and mass service (thus with both moderate variety and volume).
