5.1 The Role of Operations Management
Objectives
Define operations and describe their relationship with other business functions.
Comment on operations management in organisations producing goods and/or services.
Discuss operations management strategies and practices for ecological, social (human resource), and
economic sustainability.
OPERATIONS
Define operations and describe their relationship with other business functions.
Operations are fundamental: how organisations produce the products that meet consumers’ needs & wants.
Operations management: the art of managing production to get the best end product.
found in all sectors, e.g.
primary sector, mining or harvesting
secondary sector, industrial manufacturing
tertiary sector, open-heart surgery
quaternary sector, business consultancy.
Extended definition:
Operations management is about planning, organising, and controlling the different elements and stages of the
production process, from choosing the most appropriate raw materials and equipment, to ensuring that the finished
product is of the standard required.
,Relationship with other departments
Operations deliver the “what” question of an organisation's objectives.
HR
Operations are done by people, e.g. hairdresser or car factory worker.
Finance
Operations need funding and all financial aspects must be carefully budgeted and monitored.
Marketing
Operations create products that must be marketed, promoted and sold at the right price to the right audience.
Decision-making process
Operations manager can work with other departments and make recommendations such as:
direct experience of production economies of scale, help identify strengths & weaknesses of the organisation
that are unknown to other departments.
suggest which forms of non-financial rewards, e.g. job rotation or teamwork, may be suitable or not.
know which production costs could be cut to lower break-even point and margin of safety.
advise on which product extension strategies may be easily implemented or not.
PRODUCTION
Comment on operations management in organisations producing goods and/or services.
Productionis the creation of physical products (goods) or non-physical products (services).
SUSTAINABILITY
Discuss operations management strategies and practices for ecological, social (human resource), and economic
sustainability.
Operations managers also have to take several other factors into account:
, economic factors
social factors
ecological/environmental factors
SUSTAINABLE DEVELOPMENT
Economic sustainability Social sustainability Ecological sustainability
respect budgets. responsibility towards stakeholders. impact on natural
minimise wastage. treat employees fairly. environment.
greater efficiency. good working conditions. industrial
measured in monetary not worsen quality of life for local pollution: air,
terms. people. water, noise.
Triple bottom line
the need to take economic, social, and ecological factors into account when making business decisions.
5.2 Production Methods
, Objectives
Define and explain the following production methods:
job or customised production
batch production
mass production
flow, line, or process production
cellular manufacturing
Recommend the most appropriate method of production for a given situation.
PRODUCTION METHODS
Define and explain the following production methods:
job or customised production
batch production
mass production
flow, line, or process production
cellular manufacturing
Type Definition Example
Production of a special "one-off" Custom-made cars with
Job (customised) production product made to a specific order individualised accessories.
for one individual customer. A personalised wedding cake.
Production of a group of identical
Car models with differing features
products; "batch" refers to the fact
for each model.
Batch production that the items in each group go
A series of cookies in different
together from one stage of
flavours.
production to the next.
Production of a high volume of
identical, standardised products. Cars that are made to a standard
Flow production, process design.
Mass production
production, and line production are Identical, undifferentiated cookies
alternative terms that stress the produced for a mass market.
"mass" aspect.
Objectives
Define operations and describe their relationship with other business functions.
Comment on operations management in organisations producing goods and/or services.
Discuss operations management strategies and practices for ecological, social (human resource), and
economic sustainability.
OPERATIONS
Define operations and describe their relationship with other business functions.
Operations are fundamental: how organisations produce the products that meet consumers’ needs & wants.
Operations management: the art of managing production to get the best end product.
found in all sectors, e.g.
primary sector, mining or harvesting
secondary sector, industrial manufacturing
tertiary sector, open-heart surgery
quaternary sector, business consultancy.
Extended definition:
Operations management is about planning, organising, and controlling the different elements and stages of the
production process, from choosing the most appropriate raw materials and equipment, to ensuring that the finished
product is of the standard required.
,Relationship with other departments
Operations deliver the “what” question of an organisation's objectives.
HR
Operations are done by people, e.g. hairdresser or car factory worker.
Finance
Operations need funding and all financial aspects must be carefully budgeted and monitored.
Marketing
Operations create products that must be marketed, promoted and sold at the right price to the right audience.
Decision-making process
Operations manager can work with other departments and make recommendations such as:
direct experience of production economies of scale, help identify strengths & weaknesses of the organisation
that are unknown to other departments.
suggest which forms of non-financial rewards, e.g. job rotation or teamwork, may be suitable or not.
know which production costs could be cut to lower break-even point and margin of safety.
advise on which product extension strategies may be easily implemented or not.
PRODUCTION
Comment on operations management in organisations producing goods and/or services.
Productionis the creation of physical products (goods) or non-physical products (services).
SUSTAINABILITY
Discuss operations management strategies and practices for ecological, social (human resource), and economic
sustainability.
Operations managers also have to take several other factors into account:
, economic factors
social factors
ecological/environmental factors
SUSTAINABLE DEVELOPMENT
Economic sustainability Social sustainability Ecological sustainability
respect budgets. responsibility towards stakeholders. impact on natural
minimise wastage. treat employees fairly. environment.
greater efficiency. good working conditions. industrial
measured in monetary not worsen quality of life for local pollution: air,
terms. people. water, noise.
Triple bottom line
the need to take economic, social, and ecological factors into account when making business decisions.
5.2 Production Methods
, Objectives
Define and explain the following production methods:
job or customised production
batch production
mass production
flow, line, or process production
cellular manufacturing
Recommend the most appropriate method of production for a given situation.
PRODUCTION METHODS
Define and explain the following production methods:
job or customised production
batch production
mass production
flow, line, or process production
cellular manufacturing
Type Definition Example
Production of a special "one-off" Custom-made cars with
Job (customised) production product made to a specific order individualised accessories.
for one individual customer. A personalised wedding cake.
Production of a group of identical
Car models with differing features
products; "batch" refers to the fact
for each model.
Batch production that the items in each group go
A series of cookies in different
together from one stage of
flavours.
production to the next.
Production of a high volume of
identical, standardised products. Cars that are made to a standard
Flow production, process design.
Mass production
production, and line production are Identical, undifferentiated cookies
alternative terms that stress the produced for a mass market.
"mass" aspect.
