Nice and compact summary, used in our studygroup, July 2024. No blabla, to the point
Summary Operations
management Chapter 1
Operations management is the activity of managing the resources that create
and deliver services and products.
The operations function is one of the three core functions of any organization.
These are:
• The marketing (including sales function) – which is responsible for
communicating the organization’s services and product of its markets
in order to generate customer requests.
• The product/service development function – which is responsible
for coming up with new and modified services and products in order to
generate future customer requests.
• The operations function – which is responsible for the creation
and delivery of services and products based on customer requests.
Any business that creates something must use resources to do so, and so must have
an operations activity. Operations management use resources to appropriately
crate outputs that fulfill defined market requirements. Yet operations
management is also relevant to organizations whose purpose is not primarily to
earn profits. All operations crate and deliver services and products by changing
input into outputs using an input-transformation-output model.
One set of input to any operation’s process are transformed resources. These
are the resources that are treated; transformed or converted in the process they
are usually a mixture of the following:
• Materials – operations which process materials could do so to transform
their physical properties (shape or compositions). Other process materials
to change their location (parcel delivery companies). Some, like retail
operations, do so to change the possession of the materials. Finally, some
operations store materials, such as warehouses.
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• Information – Operations whish process information could do so
to transform their informational properties.
• Customers – Operations whish process customers might change their
physical properties in a similar way to materials processors; for
example, hairdressers or cosmetic surgeons. Some store customers:
hotels for
example, Airlines, mass rapid transport systems transform the location of
their customers, while hospitals transform the physiological state. Some
are concerned with transforming the psychological state, like most
entertainments services.
The other set of inputs are transforming resources. These are the resources,
which act upon the transformed resources. There are two types of transforming
resources:
• Facilities – the buildings, equipment, plant and process technology of
the operation.
• Staff - the people who operate, maintain, plan and manage the
operations. (All people in the organization)
Output from the process – products and services. This can vary from pure
products (car, newspaper) to pure services (hairdresser). This can also be a
mixture of products and services, for example a restaurant. The product is the
meal, and the services are the delivery, making of the food and the ambiance.
Customers may be an input to many operations but they are also the reason for
their existence. If there were no customers there would be no operations. So it is
critical that we are aware of customers needs, both current and potential.
Operations management has two meanings:
Operations as a function – meaning the part of the organization, which creates
and delivers services and products for the organizing’s eternal customers.
Operations as an activity – meaning the management of the processes within
any of the organization’s functions.
Four V’s
• The volume of their outputs;
• The variety of their outputs;
• The variation of the demand for their outputs;
• The degree of visibility, which customers have of the creation of
their output.
High volume – McDonalds low volume – small cafeteria
High variety – taxi company (flexible) low variety – Bus company
High variation – season hotel low variation – off-season hotel
High visibility – retailer store, hair dresser low visibility – web shop, dry cleaner.
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Chapter 2
The triple bottom line also known as people, planet and profit is a
straightforward idea that organizations should measure themselves not jus ton
the traditional economic profit that they generate for their owners, but also on the
impact their operations have on society and the environment.
The idea behind the social bottom line performance is not just that there is a
connection between businesses and the society in which they operate – that is self-
evident. Rather it is that businesses should accept that they bear some
responsibility for the impact they have on society and balance the external
‘societal’ consequences of their actions with the more direct internal consequences,
such as profit.
Environmental sustainability means ensuring that the overall productivity of
accumulated human and physical capital resulting from development actions more
than compensates for the direct or indirect loss or degradation of the environment.
The organization’s top management represent the interest of the owners and
therefore are the direct custodians of the organization’s economic performance.
Broadly this means that operations mangers must use the operation’s resources
effectively, and there are many ways of measuring this economic bottom line.
The stakeholder perspective to judge the impact an operation has on its
stakeholders. Stakeholders are the people and groups who have a legitimate
interest in the operation’s activities.
Corporate social responsibility (CSR) is essentially about how business takes
account of its economic, social and environmental impact in the way it operates –
maximizing the benefits and minimizing the downsides. CSR has five dimensions:
• Environmental
• Social
• Economic
• Stakeholder
• Voluntariness
Also called the tripe P people, planet, and profit.
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