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MNB1601 ASSIGNMENT 5
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MNB1601 ASSIGNMENT 5
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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 top-
priority 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
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performance objectives are formulated in such a way that they are applicable to both
manufacturers and service providers. To acquire operations based advantages, the
following 6 general operations-management performance objectives can be followed:
Do things right the first time
Do things cost effectively
Do things fast
Make changes quickly
Do things right every time
Do things better
Operations management guideline Positive result
Do things right the first time Higher quality
Do things cost effectively Lower cost
Do things fast Shorter lead time
Changing things quickly Greater Adaptability
Do things right every time Lower variability
Do things better Better service
The transformation model:
The operations function is primarily concerned with using resources (inputs) to provide
outputs by means of a transformation process. Therefore the transformation model
comprises 3 main components: Inputs, the transformation process itself and outputs.
Inputs:
Inputs used in the transformation process comprise both the resources that are to be
transformed (processed, changed or converted) and the resources required to make the
transformation possible. The resources to be transformed include the following:
Material
Customers/clients
Information
The resources required to make transformation possible include:
Human Resources
Equipment and facilities
Technology
The Transformation Process:
The transformation process converts inputs to outputs. The nature of the process is
determined by what input is predominantly being processed.
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