© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Chapter One MANAGING OPERATIONS Terry Hill

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X OVERVIEW NATURE of organisations The operations manager’s TASK Operations management in a DEVELOPING ECONOMY The PURCHASE mix of services/products The ROLE of the operations manager SERVICES versus MANUFACTURING

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X NATURE OF ORGANISATIONS Variety of TASKS required to provide products/services to meet customer needs Similar tasks are GROUPED together Each group is MANAGED by a different function One of these functions is OPERATIONS

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Key ACTIVITIES THE OPERATIONS MANAGER’S TASK

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X SIZE of task Key ACTIVITIES THE OPERATIONS MANAGER’S TASK

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X COMPLEXITY SIZE of task Key ACTIVITIES THE OPERATIONS MANAGER’S TASK

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X THE OPERATIONS MANAGER’S TASK Managing INPUTS into the system Managing the PROCESS used for converting the inputs into outputs Managing these tasks EFFICIENTLY Managing in line with needs of agreed MARKETS (Key activities)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Number of PEOPLE in the process Number and type of ASSETS involved  Fixed – e.g. plant and equipment  Current – e.g. inventory holding Number and type of COSTS to be managed  Direct – material and labour  Indirect – overheads THE OPERATIONS MANAGER’S TASK (Size of the task)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X SIZE of the organisation NATURE of services/products provided TECHNOLOGY levels in processes used Processes MANAGED in-house or outsourced THE OPERATIONS MANAGER’S TASK (Complexity of the task)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Exhibit 1.1 from page 8 THE OPERATIONS MANAGER’S TASK (Summary)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Figure 1.2 from page 9 THE OPERATIONS MANAGER’S TASK (Examples in services and manufacturing)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Figure 1.2 from page 9 THE OPERATIONS MANAGER’S TASK (Examples in services and manufacturing)

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X OPERATIONS MANAGEMENT IN A DEVELOPING ECONOMY National economy comprise MIX of sectors:  Primary – e.g. agriculture  Secondary – e.g. manufacturing  Tertiary – e.g. services BALANCE varies during life of an economy SERVICES are increasingly important in developed economies

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X OPERATIONS MANAGEMENT IN A DEVELOPING ECONOMY Exhibit 1.6 from page 13

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X OPERATIONS MANAGEMENT IN A DEVELOPING ECONOMY Operations Management ROLE is the same no matter what the sector

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X THE PURCHASE: MIX OF SERVICES AND PRODUCTS Exhibit 1.7 from page 14

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X ROLE OF THE OPERATIONS MANAGER Managing a COST CENTRE Managing the SHORT TERM Managing the LONG TERM Manager of TECHNOLOGY CO-ORDINATING the whole

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X ROLE OF THE OPERATIONS MANAGER Managing the WORK and MONEY flow Using the common denominator of TIME and MONEY Managing the process through PEOPLE Linking the THINKING and DOING ends of the business Managing COMPLEXITY

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X SERVICES VERSUS MANUFACTURING Essentially, MANAGING OPERATIONS in services and manufacturing is the SAME Managing the operations PROCESS that transforms inputs into outputs In an EFFICIENT way In line with the needs of agreed MARKETS HOWEVER, THERE ARE DIFFERENCES

© AMD Publishing / Terry Hill 2005 T. Hill, Operations Management 2e. Palgrave Macmillan ISBN: / X Aspect Processing of ProductsInformationCustomer Nature of product/service Organisational arrangements Level of customer involvement in the operations process Typical competitive environment Tangible Durable Highly specified Back office Intangible Perishable Server discretion Front office Low Traded High Sheltered SERVICES VERSUS MANUFACTURING (Some key differences)