5.1 The Role of Operations Management
Operations Management: Relationship with other business functions:
• responsible for the design and creation of products • Human Resource Management
• oversees every aspect of the production process • an aim of the HR department is to ensure that the firm has
from drawing up initial designs and prototypes to the the right quality and quantity of labour to meet its overall
production of finished goods and services corporate objectives
• objective is to provide the things that customers • HR will consider the scale of production, relocation and
require so that they enjoy their purchases and research and development
become loyal customers • scale of production
• turn the factors of production into goods and • large-scale mass production typically requires
services significant amounts of relatively unskilled labour
• HR will recruit to meet the demands for production
• niche production is likely to require a small number of
Factors of Production: highly skilled staff
• mass production - manufacture of large quantities of
a standardised good
• Capital - the money needed to open a business, and
the tools or machinery used by a business • niche production - the small-scale manufacture of a
product that is then sold to a specific section of a
• Enterprise - relates to the entrepreneur or risk-taker
market
involved in the business
• Land - the actual piece of land and the natural • Relocation
resources found on it • a large number of companies have made the decision
to locate their production facilities offshore in low-
• Labour - the people who produce the product or
wage regions
provide the service: workers, employees,
management • other reasons for relocation might be to access a
skilled workforce or to gain better access to larger
markets
• Research and Development
• the development and innovation of new products is a
highly skilled task
Sustainability:
• the HR department needs to recruit highly paid
specialists or even to pursue a head-hunting strategy
• Sustainability - a business should organise its
• Finance
operations in such a way as to ensure that actions
• the finance and accounts department ensures that funds
today can be continued and not have a negative
are available
impact on future generations.
• Updating production facilities
• 3 types include ecological, social and economic
• long-term sources of finance need to be secured for
sustainability
investments in highly automated mass production lines
• Ecological which had a huge setup cost
• refers to the use of the Earth’s natural resources
• Payment Systems
and the effect its current consumption will have
• there must be a system in place to ensure that workers
on future generations
and employees receive the correct payment
• typical trend that as countries become more (remuneration) at the correct time
developed, their populations consume more
• Marketing
natural resources
• the role of the marketing department is to understand and
• Social anticipate the needs and wants of its customers
• the ability of a business not only to meet the
• Designing the correct marketing strategy
needs of its current stakeholders, but also to
• involves the 4 and 7 P’s
support the needs of future generations of
• promotional messages need to focus on the products
stakeholders
features and unique selling proposition
• stakeholders and social sustainability
• Conducting Market Research
• internal - adopt Maslow’s pyramid of needs
• effective communication between marketing and
• external - offer fair, long-term contracts to operations is required to ensure that products or
suppliers and attempt to minimise
services meet the needs of their target market
redundancies and provide sponsorships for
the local community
• Economic
• focuses on businesses making the most efficient
use of their resources
• encourages business objectives to focus on
long-term growth rather than short-term
profitability
• use green energy and use of recycled materials
are forms of economic sustainability
Operations Management: Relationship with other business functions:
• responsible for the design and creation of products • Human Resource Management
• oversees every aspect of the production process • an aim of the HR department is to ensure that the firm has
from drawing up initial designs and prototypes to the the right quality and quantity of labour to meet its overall
production of finished goods and services corporate objectives
• objective is to provide the things that customers • HR will consider the scale of production, relocation and
require so that they enjoy their purchases and research and development
become loyal customers • scale of production
• turn the factors of production into goods and • large-scale mass production typically requires
services significant amounts of relatively unskilled labour
• HR will recruit to meet the demands for production
• niche production is likely to require a small number of
Factors of Production: highly skilled staff
• mass production - manufacture of large quantities of
a standardised good
• Capital - the money needed to open a business, and
the tools or machinery used by a business • niche production - the small-scale manufacture of a
product that is then sold to a specific section of a
• Enterprise - relates to the entrepreneur or risk-taker
market
involved in the business
• Land - the actual piece of land and the natural • Relocation
resources found on it • a large number of companies have made the decision
to locate their production facilities offshore in low-
• Labour - the people who produce the product or
wage regions
provide the service: workers, employees,
management • other reasons for relocation might be to access a
skilled workforce or to gain better access to larger
markets
• Research and Development
• the development and innovation of new products is a
highly skilled task
Sustainability:
• the HR department needs to recruit highly paid
specialists or even to pursue a head-hunting strategy
• Sustainability - a business should organise its
• Finance
operations in such a way as to ensure that actions
• the finance and accounts department ensures that funds
today can be continued and not have a negative
are available
impact on future generations.
• Updating production facilities
• 3 types include ecological, social and economic
• long-term sources of finance need to be secured for
sustainability
investments in highly automated mass production lines
• Ecological which had a huge setup cost
• refers to the use of the Earth’s natural resources
• Payment Systems
and the effect its current consumption will have
• there must be a system in place to ensure that workers
on future generations
and employees receive the correct payment
• typical trend that as countries become more (remuneration) at the correct time
developed, their populations consume more
• Marketing
natural resources
• the role of the marketing department is to understand and
• Social anticipate the needs and wants of its customers
• the ability of a business not only to meet the
• Designing the correct marketing strategy
needs of its current stakeholders, but also to
• involves the 4 and 7 P’s
support the needs of future generations of
• promotional messages need to focus on the products
stakeholders
features and unique selling proposition
• stakeholders and social sustainability
• Conducting Market Research
• internal - adopt Maslow’s pyramid of needs
• effective communication between marketing and
• external - offer fair, long-term contracts to operations is required to ensure that products or
suppliers and attempt to minimise
services meet the needs of their target market
redundancies and provide sponsorships for
the local community
• Economic
• focuses on businesses making the most efficient
use of their resources
• encourages business objectives to focus on
long-term growth rather than short-term
profitability
• use green energy and use of recycled materials
are forms of economic sustainability
