Summary Operations management
Knowledge clip 1
Introduction to Operations Management
• Definition: Operations Management (OM) involves managing processes that convert inputs
(labor, materials, energy) into outputs (goods and services).
There are inputs such as: materials, equipment, customers, staff, technology, facilities.
Usually a combination of these aspects for an organization. You need staff, materials and
equipment for example to serve in a restaurant.
And there are outputs: products, services, benefits, emotions, judgements (perceived value).
Usually also a combination, it could be the case a hospital; a patient could have had a
surgery, usually a lot of emotions involved and the patient has benefits from the surgery
since they will now live a better life.
• Importance: OM is crucial because it is present in every aspect of daily operations in various
settings like restaurants, hospitals, airports, etc.
Core Processes in Operations Management
1. Order Fulfillment Process: Activities from customer order to delivery; from the moment a
customer orders to the moment their good/service has been delivered.
2. Customer Relation Process: Engagement with customers before, during, and after the
order; how an organization deals and engages with customers before, during, and after the
order fulfillment process. Example: different experiences when traveling with ryanair
compared to emirates.
3. Supplier Relation Process: Managing relationships and supply chains; every organization
works more likely with multiple suppliers; how well does an organization deal with suppliers
and a deal with these suppliers, and how well do they have an overview of a supply chain
4. Product and Service Development Process: Developing new products/services for future
success.; about developing new products/services in the longer term, to stay successful as a
, business in the future.it about the day-to-day operations. All these processes strongly
depend on the core business of the company.
Organizational Design: how operations are being managed
• Types of Organizational Structures:
o Simple: Small companies, owner-managed;
o Functional: Departments like Operations, Marketing, HR.when companies start to
grow further, departmental approach to their structure.
o Divisional: Based on products, markets, regions. When a company starts to geo
centralized, multiple locations, facilicom: they deliver types of services
o Conglomerate: Multiple businesses under one entity. One business owning and
managing multiple business, owning big chunks in the supply chain. IKEA has their
own forests
o Hybrid: Combination of various structures. Most common one, mix of all of them.
Hospital example, rather functional structure but to some extent also a divisional
structure, having multidisciplinary teams on certain diseases such as cancer.
Operations diagnosis: what is happening within the organization. about the character of the
business, the way the products and services are being delivered.
Types of Operations
• Materials Processing Operations (MPOs): Manufacturing: think of the assembly of a car.
All kinds of sized, specifics, but in general also predictable. If you want to assemble a car
you know what you need, who you need, how long it will take etc.
• Customer Processing Operations (CPOs): Services: think of the restaurant, the customer
is part of the process. All different customers, less predictable.
• Information Processing Operations (IPOs): Services involving data and information:
service, but the information flowing through the system, think link between cpo’s and ipo’s.
About facts and data going through the system, f.e your bank account in real time you will
know your status.
• Usually a combination of all 3
Differences Between Services and Manufacturing
• Intangibility: Services are experienced, not tangible: there is no tangible proof of the end
result.
• Heterogeneity: Variability in service experiences: services may differ, products are the
same.
• Perishability: Services cannot be stored, products can be stored
• Simultaneity: Services are produced and consumed simultaneously, products can be
consumed when we see fit
Conclusion
• OM is integral to the success of any organization.
• It involves a combination of processes and organizational structures tailored to the
company's core business and goals.
Knowledge clip 2
Introduction to the 4 V's
, • Definition of Operations Management: Managing processes that convert inputs (labor,
materials, energy) into outputs (goods and services).
• Core Processes in Operations Management: Order fulfillment, customer relations, supplier
relations, and product/service development.
Operations Diagnosis: The 4 V's
The 4 V's are a tool used to analyze and diagnose operations within an organization. They include:
1. Volume of Output:
o Refers to the scale of operations, such as the number of customers served or
products produced.
o High volume operations often benefit from economies of scale.
o F.e coca cola has a high volume of output, they produce a lot
2. Variety of Products or Services Offered:
o Indicates the range of different products or services provided.
o High variety can lead to increased complexity in operations.
o In a close relationship to volume, is it good to have a high volume and variety
3. Variation in Demand:
o Describes how demand for products or services changes over time (daily,
seasonally, etc.). Think about ice cream shop
o High variation requires flexible operations to manage fluctuations.
4. Variability (Customization Possibilities):
o Refers to the degree of customization available to customers.
o High variability means operations need to be adaptable to individual customer needs.
Application of the 4 V's
• Example: Restaurants:
o Mirazur (best restaurant in the world): High variety, high customization (tailor-
made experiences). Low volume
o McDonald's: High volume, low variety, low customization (standardized processes).
•
• Different Company Types:
o Boutique Hotel vs. Resort Hotel: Different 4 V's based on size, services, and
customer expectations.
, o Railway Station vs. Hospital: Different operational needs and challenges.
Additional Insights
• Variability vs. Visibility:
o Some sources, including Google, mention "Visibility" instead of "Variability".
o Visibility refers to how much of the operations process is visible to the customer.
Conclusion
• The 4 V's provide a framework to understand and analyze the complexities of operations
management.
• Different organizations will have different profiles based on their specific operational
characteristics and needs.
Knowledge clip 3
Introduction to the Servuction Model
• Purpose: The Servuction Model is a tool used in service marketing and operations
management to understand and improve the service experience.
• Context: Based on Operations Management concepts from Jones & Robinson, Chapter 1.
Knowledge clip 1
Introduction to Operations Management
• Definition: Operations Management (OM) involves managing processes that convert inputs
(labor, materials, energy) into outputs (goods and services).
There are inputs such as: materials, equipment, customers, staff, technology, facilities.
Usually a combination of these aspects for an organization. You need staff, materials and
equipment for example to serve in a restaurant.
And there are outputs: products, services, benefits, emotions, judgements (perceived value).
Usually also a combination, it could be the case a hospital; a patient could have had a
surgery, usually a lot of emotions involved and the patient has benefits from the surgery
since they will now live a better life.
• Importance: OM is crucial because it is present in every aspect of daily operations in various
settings like restaurants, hospitals, airports, etc.
Core Processes in Operations Management
1. Order Fulfillment Process: Activities from customer order to delivery; from the moment a
customer orders to the moment their good/service has been delivered.
2. Customer Relation Process: Engagement with customers before, during, and after the
order; how an organization deals and engages with customers before, during, and after the
order fulfillment process. Example: different experiences when traveling with ryanair
compared to emirates.
3. Supplier Relation Process: Managing relationships and supply chains; every organization
works more likely with multiple suppliers; how well does an organization deal with suppliers
and a deal with these suppliers, and how well do they have an overview of a supply chain
4. Product and Service Development Process: Developing new products/services for future
success.; about developing new products/services in the longer term, to stay successful as a
, business in the future.it about the day-to-day operations. All these processes strongly
depend on the core business of the company.
Organizational Design: how operations are being managed
• Types of Organizational Structures:
o Simple: Small companies, owner-managed;
o Functional: Departments like Operations, Marketing, HR.when companies start to
grow further, departmental approach to their structure.
o Divisional: Based on products, markets, regions. When a company starts to geo
centralized, multiple locations, facilicom: they deliver types of services
o Conglomerate: Multiple businesses under one entity. One business owning and
managing multiple business, owning big chunks in the supply chain. IKEA has their
own forests
o Hybrid: Combination of various structures. Most common one, mix of all of them.
Hospital example, rather functional structure but to some extent also a divisional
structure, having multidisciplinary teams on certain diseases such as cancer.
Operations diagnosis: what is happening within the organization. about the character of the
business, the way the products and services are being delivered.
Types of Operations
• Materials Processing Operations (MPOs): Manufacturing: think of the assembly of a car.
All kinds of sized, specifics, but in general also predictable. If you want to assemble a car
you know what you need, who you need, how long it will take etc.
• Customer Processing Operations (CPOs): Services: think of the restaurant, the customer
is part of the process. All different customers, less predictable.
• Information Processing Operations (IPOs): Services involving data and information:
service, but the information flowing through the system, think link between cpo’s and ipo’s.
About facts and data going through the system, f.e your bank account in real time you will
know your status.
• Usually a combination of all 3
Differences Between Services and Manufacturing
• Intangibility: Services are experienced, not tangible: there is no tangible proof of the end
result.
• Heterogeneity: Variability in service experiences: services may differ, products are the
same.
• Perishability: Services cannot be stored, products can be stored
• Simultaneity: Services are produced and consumed simultaneously, products can be
consumed when we see fit
Conclusion
• OM is integral to the success of any organization.
• It involves a combination of processes and organizational structures tailored to the
company's core business and goals.
Knowledge clip 2
Introduction to the 4 V's
, • Definition of Operations Management: Managing processes that convert inputs (labor,
materials, energy) into outputs (goods and services).
• Core Processes in Operations Management: Order fulfillment, customer relations, supplier
relations, and product/service development.
Operations Diagnosis: The 4 V's
The 4 V's are a tool used to analyze and diagnose operations within an organization. They include:
1. Volume of Output:
o Refers to the scale of operations, such as the number of customers served or
products produced.
o High volume operations often benefit from economies of scale.
o F.e coca cola has a high volume of output, they produce a lot
2. Variety of Products or Services Offered:
o Indicates the range of different products or services provided.
o High variety can lead to increased complexity in operations.
o In a close relationship to volume, is it good to have a high volume and variety
3. Variation in Demand:
o Describes how demand for products or services changes over time (daily,
seasonally, etc.). Think about ice cream shop
o High variation requires flexible operations to manage fluctuations.
4. Variability (Customization Possibilities):
o Refers to the degree of customization available to customers.
o High variability means operations need to be adaptable to individual customer needs.
Application of the 4 V's
• Example: Restaurants:
o Mirazur (best restaurant in the world): High variety, high customization (tailor-
made experiences). Low volume
o McDonald's: High volume, low variety, low customization (standardized processes).
•
• Different Company Types:
o Boutique Hotel vs. Resort Hotel: Different 4 V's based on size, services, and
customer expectations.
, o Railway Station vs. Hospital: Different operational needs and challenges.
Additional Insights
• Variability vs. Visibility:
o Some sources, including Google, mention "Visibility" instead of "Variability".
o Visibility refers to how much of the operations process is visible to the customer.
Conclusion
• The 4 V's provide a framework to understand and analyze the complexities of operations
management.
• Different organizations will have different profiles based on their specific operational
characteristics and needs.
Knowledge clip 3
Introduction to the Servuction Model
• Purpose: The Servuction Model is a tool used in service marketing and operations
management to understand and improve the service experience.
• Context: Based on Operations Management concepts from Jones & Robinson, Chapter 1.
