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Summary MNO3701 - Effective Production & Operations Management.
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MNO3701-Summary - Effective Production & Operations Management.
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MNO 2601 Production & OperationsManagement
Chapter 1
Effective Production & Operations Management
Operations management is about how organizations produce goods and services.
Operations management is the activity of managing the resources which are devoted to the production
and delivery of products and services. The operations function is the part of the organization that is
responsible for this activity.
Operations managers are the people who have a particular responsibility for managing some, or all, of
the resources which comprises operations function
See page four of the textbook for the definitions
Operations in the organization
Operations function is one of the three core functions of any organization. These are:
Marketing function – responsible for communicating the organization’s products and services to
market
Product/service development function – creating new and modified products and services
Operations function – responsible for fulfilling customer requests for service throughout the
production and delivery process
Support function – enables the core functions to operate effectively. Includes:
o Accounting and finance function
o Human resources function
There is not always a clear division between the three core functions or between core and support
functions
Working effectively with other parts of the organization is one of the most important responsibilities of
operations management. It is a fundamental of modern management that functional boundaries should
not hinder efficient internal processes.
The support functions have a different relationship with operations than the other core functions.
Operation management’s responsibility to support functions is primarily to make sure that they
understand operations needs and help them to satisfy these needs
Operations management in the small organization
Managing operations in a small or medium sized organizations has its own set of problems. Large
companies may have the resources to dedicate individuals to specialized tasks but smaller companies
often cannot
And informal structure can allow the company to respond quickly as opportunities or problems arise.
Operations management in not-for-profit organizations
Operations management is also relevant to organizations whose purpose is not primarily to earn profits.
1
, Operations have to take the same decisions – how to produce products and services, invest in
technology, contract out activities, devise performance measures, improve operations performance etc.
The strategic objectives of not-for-profit organizations may be more complex
They may be a greater chance of operations decisions being made under conditions of conflicting
objectives.
Inputs and outputs
All operations produce products and services by changing inputs into outputs. They do this by using the
input transformation output process.
Transformation process model – describes operations in terms of their input resources, transforming
processes and outputs of goods and services.
Input Resources – transforming and transformed resources that form the input to operations
Inputs to the process
One set of inputs to any operations processes are transformed resources – resources that are treated,
transformed or converted in the process.
Materials
Transformation of the physical properties. Other operations process materials to change their
location. Some retailer operators change the possession of the materials. Some operations
store materials i.e. warehouse.
Information
Transformation of the informational properties of the inputs – accountants.
Changing the position of the information – marketing and research companies
Store the information – libraries
The location of the information – telecommunication companies
Customers
Changing the physical properties in a similar way to materials – hair stylist or cosmetic surgeon
Accommodating customers – hotels
Transportation and bus companies - transforming the location of customers
Hospitals – transformation of the customer physiological state
Entertainment Centers – music, theatre, television and radio transformations – transforming the
psychological state of the customer.
The other set of inputs to any operations process are transforming resources. These are the resources
which act upon the transformed resources.
There are two types which form the building blocks of all operations:
Facilities – buildings, equipment, transforming resources, plant and process technology of the
operation
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