Chapter one study notes on operations management operations management a global and south african perspectives 3rd edition chapter summary chapter notes with diagrams
Why is operation management important in all types of organisations?
What is the input-output process?
What is the process hierarchy?
How do operations processes have different characteristics?
What do operations managers do?
What is operations management?
• The activity of managing the resources that create and deliver services and products.
• The operations function is the part of the organisation that is responsible for this activity.
• Every organisation has an operations function because every organisation creates some type of service and or
products.
• Operations managers are the people who have particular responsibility for managing some or all of the
resources which comprise the operations function.
• Operations managers are often called other names in different types of businesses such as:
o Fleet manager in a distribution company.
o Administrative manager in a hospital.
o Store manager in a supermarket.
Operations in the organisation
• The operations function is central to the organisation because it creates and delivers services and products,
which is its reason for existing.
• The operations function is one of the 3 core functions of any organisation.
• These are:
o Marketing (which includes sales): keeps the market informed of the organisation's services and
products for the purpose of ensuring customer interest.
o Service or product development: generates new and or adapts services and products for the
purpose of ensuring customer interests in the future.
o Operations: produces and delivers services and products based on customer interest.
• The support functions that enable the core functions to operate effectively are:
o Accounting and finance function
o Technical function
o Information systems function
o Human resource function
• Many organisations will have various names for their various functions and have a set of support functions.
, Operation Management
• Almost all organisations have the 3 core functions as all organisations have a fundamental need to sell their
products and services, meet their customer requests for services and products and come up with new
services and products to satisfy customers in the future.
Table 1.1. The activities of core functions in some organisations
Core functional Internet service providers (ISP) Fast food chain Internation aid charity Furniture manufacturer
activities
Operations Maintain hardware, software and content Make burgers, etc. Give service to the Make components.
Implement new links and services Serve customers. beneficiaries of the charity Assemble furniture
Maintain equipment
Marketing and Promote services to users and get Advertise on TV Develop funding contracts. Advertise in magazines.
sales registrations. Devise promotional Mail out appeals for Determine pricing policy.
Sell advertising space materials donations Sell to stores
Products/ Devise new services and commission new Design hamburgers, Develop new appeals Design new furniture.
services information content pizzas, sushi, etc. campaigns. Co-ordinate with
development Design décor for Design new assistance fashionable colours
restaurants programmes
• In practice there is not a clear division between the 3 core functions or between core and support functions.
• This leads to some confusion over where the boundaries of the operations function should be drawn.
• We view the operations functions as comprising all the activities necessary for the day-to-day fulfilment of
customer requests. This includes sourcing services and products from suppliers and delivering services and
products to customers.
• It is fundamental of modern management that functional boundaries should not hinder efficient internal
processes.
• Figure 1.2 shows some of the relationships between operations and other functions in terms of each
relationship.
• The support functions have a different relationship with operations than the other core functions.
• Operations management's responsibility to support functions is primarily to make sure that they understand
operations needs and help them to satisfy these needs.
• These relationships with the other two core functions is more equal- less of ‘this is what we want’ and more
‘this is what we can do currently’
, Operation Management
Organisations management is important in all types of organisation.
• In some types of organisation it's relatively easy to visualise the operations function and what it does, even if
we have never seen it.
• Any business that creates something must use resources to do so and so must have an operations activity.
• An automobile plant and an advertising agency do have one important element in common: both have a higher
objective- to make a profit from creating and delivering their products or services.
• Yet not-for-profit organisations also use their resources to create and deliver services, not to make a profit,
but to serve society in some way.
• 5 examples of what operations management does in 5 very different organisations and the common themes
that emerge:
o Automobile assembly factory- operations management uses machines to efficiently assemble
products that satisfy current customer demands
o Physician (general practitioner)- operations management uses knowledge to effectively diagnose
conditions in order to treat real and perceived patient concerns.
o Management consultant- operations management uses people to effectively create the services
that will address current and potential client needs.
o Disaster relief charity- operations management uses organisation’s and partner’s resources to
speedily provide the supplies and services that relieve community suffering.
o Advertising agency- operations management uses staff’s knowledge and experience to creatively
present ideas that delight clients and address their real needs.
• Summary of what operations management does is “operations management uses machines to efficiently
assemble products that satisfy current customer demands’.
• The statements from the other organisations were similar but used slightly different language.
• Operations management used not just machines but also ‘organisations and partners resources’ and ‘staffs
knowledge and experience’ to ‘efficiently (or effectively or creatively) assemble (or produce, change, sell,
move, cure, shape, etc) products (or services or ideas) that satisfy (or match or exceed or delight) customer
(or client or citizens or society’s) demand (or needs or concerns or even dreams)
• No matter the language used the common theme and common purpose to how we can visualise the
operations activity in any type of organisation whether it is small or large service or manufacturing, public or
private, profit or not profit.
• Operations management uses ‘resources to appropriately create outputs that fulfil defined market
requirements’.
Figure 1.3: Operations management uses resources to appropriately create outputs that fulfil defined market requirements
Operations management use…
Resources To Appropriately Create Outputs That Fulfil Defined Market Requirements
Produce
Experience Change Potential Citizen’s
People Effectively Sell Ideas Match Perceived Client Dreams
Machines Efficiently Assemble Products Satisfy Current Customer Demands
Knowledge Creatively move Services Exceed Emerging Society’s Needs
Partners etc Cure Etc Delight Real etc Concerns
etc Shape etc Etc Etc
etc
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