Operations Management, Slack
Chapter 1 Operations Management
Operations management: activity of managing the resources which are devoted to the production
and delivery of products and services.
Operations function: part of the organization that is responsible for this activity.
In a company there are three core functions:
- Marketing (incl sales): responsible for communicating the products/services to its markets in
order to generate customer requests for service
- Product/service development: responsible for creating new and modified products and
services in order to generate future customer requests for service
- Operations: responsible for fulfilling customer requests for service throughout the
production and delivery of products and services
There are also support functions:
- Accounting and finance: provides info to help economic decision making and manages the
financial resources
- Human Resources: recruits & develop the staff + looking for their welfare
In a transformation process model resources (transforming and transformed resources) are input
which transform something or itself into output of goods(tangible) and services(intangible).
Transformed resources: Treated/transformed/converted in process. Mixture of:
- Materials: change their physical properties (shape/composition), location (delivery
company), possession (retail operations) or store materials (warehouses)
- Information: transform informational properties (purpose/form info accountants),
possession (market research companies sell info), store info (library) or location
(telecommunication comp)
- Customers: change physical properties (hairdressers), store (hotel), location (airlines) or
psychological state (hospital, entertainment services)
Transforming resources: act upon transformed resources. Two types:
- Facilities: Building, equipment, plant and process technology
- Staff
Supply network: Network of supplier and customer relations that have relationships with
organization
Internal supplier: Processes or individuals within an operation that supply products or services to
other processes/individuals
Internal customer: Processes/individuals within operation who are customers for other internal
processes or individual outputs.
Hierarchy of operations: idea that all operations processes are made up of smaller processes.
Two meanings of ‘operation’:
- as a function: part of organization which produces the products and services for the
organization’s external customers
- as an activity: management of processes within any of organization’s functions
Four dimensions of operations processes:
- Volume: Level or rate of output from a process, determines process behaviour.
Repeatability and systemization (McDonald’s). Low unit costs
- Variety: Range of different products/services produced by a process, determines customer
behaviour. flexibility
- Variation: degree to which the rate or level of output varies from a process over time,
determins behavior. F.e. variation in demand in resort (summer/winter)
- Visibility: Customer contact process exposure.
Chapter 1 Operations Management
Operations management: activity of managing the resources which are devoted to the production
and delivery of products and services.
Operations function: part of the organization that is responsible for this activity.
In a company there are three core functions:
- Marketing (incl sales): responsible for communicating the products/services to its markets in
order to generate customer requests for service
- Product/service development: responsible for creating new and modified products and
services in order to generate future customer requests for service
- Operations: responsible for fulfilling customer requests for service throughout the
production and delivery of products and services
There are also support functions:
- Accounting and finance: provides info to help economic decision making and manages the
financial resources
- Human Resources: recruits & develop the staff + looking for their welfare
In a transformation process model resources (transforming and transformed resources) are input
which transform something or itself into output of goods(tangible) and services(intangible).
Transformed resources: Treated/transformed/converted in process. Mixture of:
- Materials: change their physical properties (shape/composition), location (delivery
company), possession (retail operations) or store materials (warehouses)
- Information: transform informational properties (purpose/form info accountants),
possession (market research companies sell info), store info (library) or location
(telecommunication comp)
- Customers: change physical properties (hairdressers), store (hotel), location (airlines) or
psychological state (hospital, entertainment services)
Transforming resources: act upon transformed resources. Two types:
- Facilities: Building, equipment, plant and process technology
- Staff
Supply network: Network of supplier and customer relations that have relationships with
organization
Internal supplier: Processes or individuals within an operation that supply products or services to
other processes/individuals
Internal customer: Processes/individuals within operation who are customers for other internal
processes or individual outputs.
Hierarchy of operations: idea that all operations processes are made up of smaller processes.
Two meanings of ‘operation’:
- as a function: part of organization which produces the products and services for the
organization’s external customers
- as an activity: management of processes within any of organization’s functions
Four dimensions of operations processes:
- Volume: Level or rate of output from a process, determines process behaviour.
Repeatability and systemization (McDonald’s). Low unit costs
- Variety: Range of different products/services produced by a process, determines customer
behaviour. flexibility
- Variation: degree to which the rate or level of output varies from a process over time,
determins behavior. F.e. variation in demand in resort (summer/winter)
- Visibility: Customer contact process exposure.
