2 Role of Operations Management Operations is the key business function concerned with the transformation of inputs into outputsWhat is the role of the operations manager?Planning productionOrganising inputsMotivating employeesMonitoring and controlling outputsHow does effective operations management add to the business?Increasing productivityReducing costs and improving qualityTo achieve strategic competitive advantage through lower costs and differentiated goods.
3 Role of Operations Management What is a cost leadership strategy?A business aims to be the lowest cost manufacturerWhat is a differentiated product?One that has unique features and commands a higher priceThere is significant interdependence between the key business functions and a constant flow of information between them.In a customer-focused business, operations must produce a product that satisfies the needs and desires of the target market.
4 Influences What is a globalisation? Integration and interdependence through trade, technology, deregulation and global businesses of the economies of different countries, creating a global economyHow does globalisation influence business operations?Different currenciesTrade agreementsGlobal consumersTechnologyDifferent cultures
5 Influences What do legal regulations aim to ensure? Business operations are safeNegative impact on the environment is minimisedProduct quality and safety standards are metWhat are business ethics?The rules and principles a business follows to be a good corporate citizenSocially responsible business decisions include promoting human rights, not engaging in corruption, being consultative and improving living standardsBusinesses are increasingly being held accountable.
6 Operations ProcessesInputs are the materials, people and facilities used to make goods or provide services plus time and financeTransformed resources are the materials, information and customers that are changed by the operations processWhat are transformation processes?Activities that add value to the inputsBusinesses that produce in high volumes, low variety and experience little variation in demand will use a high level of capital equipment, technology and materialsLow-volume operations will need to have a highly flexible operations process using more skilled labour.
7 Operations Processes What does visibility of operations refer to? How ‘open’ the operations process is to customersMore visible the operations, the more customer focusedWhat are scheduling and sequencing tools used for?To identify all steps in the operations process and organise them into the most efficient order to complete (eg. Gantt charts and critical path analysis)Process technology is the improvements in the machines, equipment and devices used to transform inputs into outputsMonitoring, control and improvement to operations are essential if the business is to achieve its performance objectives.
8 Operations StrategyWhat sort of effect does effective and efficient operations management have?Reduces costsIncreases revenueImproves profitWhat are operations strategies?Objectives, plans and policies used to give the business a competitive advantage and how this advantage will be sustained.Performance objectives for operations strategies are quality, high speed, durability, flexibility in production, low costs and opportunity for customisation.
9 Operations Strategy What is process innovation? The development of the operations function itself to bring benefits to the businessWhat are the aims of supply chain management?Reduce inventory costsReduce wasteEnable faster deliveryMore satisfied customersWhat are the three stages of quality management?Quality controls are establishedEstablishment of procedures that will prevent problems or errorsImproving quality through TQM.
10 Operations StrategyOvercoming resistance to change in operations requires strategies and management skills to emphasise the long-term contribution to lower costs and better quality.What are the global factors that can influence business operations?Opportunity to source inputs from cheaper sources overseasOpportunity to expand and achieve economies of scaleDevelopment of new products for an international market.