OPERATIONS MANAGEMENT

INVOLVES PROCESS CONVETING INPUTS INTO OUTPUTS

AIM: ENSURE RIGHT QUANTITY GOODS / SERVICES PRODUCED RIGHT TIME RIGHT COST RIGHT QUANTITY

HOW: PLANNING, ORGANISATION, CONTROL TRANSFORMATION INTO OUTPUT

ISSUE: MUST OFFER MORE BENEFITS THAN COMPETITION / PRODUCE GOODS LOWER PRICE

PLANNING, ORGANISING & COORDINATING FIRMS RESOURCES PROVIDE PRODUCTS REQUIRED:

• MEET CUSTOMER NEEDS
• MEET FIRM OBJECTIVES

OPERATIONS MANAGERS HAVE TO:

• DESIGN TRANSFORMATION PROCESS
• MANAGE OPERATIONS PROCESS
• IMPROVE PROCESS OVER TIME

RAW MATERIALS

MANAFACTURING

TRANSPORTATION

RETAIL

DISPOSAL / RECYCLING

E.G. SMALL FOOD PRODUCER WINS CONTRACT NATIONAL SUPERMARKET WILL HAVE TO PRODUCE LARGER SCALE: INVOLVE:

INVESTMENT EQUIPMENT

MANAGING COMPLEX ORGANISATION

MANAGE GROWTH

TAKE RISK CONSIDERATION

BUSINESS PFFER LEVEL CUSTOMER SERVICE PROVIDE

FLEXIBILITY OF BUSINESS TO BE IN RELATION CUSTOMER DEMANDS

E.G. HOW MANY VERSION PRODUCT, HOW MUCH CHOICE SHOULD CUSTOMER HAVE?

BETTER USE LABOUR INTENSIVE

INVEST TECHNOLOGY

HAVE CAPITAL INTENSIVE PROCESS

HOW BEST PROVIDE?

E.G. SELL ONLINE OR HIGH STREET

DECISION IMPACTS

• RESOURCING
• QUALITY
• COSTS

PRODUCER 'UPSTREAM' TOWARDS RAW MATERIALS TAKING ON MORE OF THESE

DIFFERENCE BETWEEN PRICE FINISHED PRODUCT / SERVICE & COST OF INPUTS INVOLVED IN MAKING IT

ADDED VALUE = SALES REVENUE - COST OF PRODUCTION

PROFIT = SALES REVENUE - COST PRODUCTION - ALL OTHER COSTS

BUILD BRAND

DELIEVER EXCELLENT CUSTOMER SERVICE

PRODUCT FEATURES / BENEFITS

OPERATE EFFICENTLY 

CHARGE HIGHER PRICE

USP

PROTECTION COMPETITORS OFFERING LOWER PRICE

FOCUS ON TARGET MARKET SEGMENT

STRONG GROSS PROFIT MARGINS

• GROSS PROFIT
• STRONG SIGNAL

REPEAT CUSTOM

• SATISFIED CUSTOMER
• CUSTOMERS GETTING VALUE FOR MONEY

BRAND / NAME RECOGNITION

• IMPORTANT WORD OF MOUTH RECOMMENDATION

VOLUME: RELATIVLEY SMALL BUSINESS HAND MADE SHOES TO COKE

VARIETY: BOTTLE WATER HIGH VOLUME LITTLE VARIETY WHEREAS DOCTOR DIFFERENT PATIENTS

VISIBILITY: VISIBLE STAFF RELATION FINAL CUSTOMER, SOME OPERATION LITTLE  / NO CONTACT E.G. PRODUCER CAR PARTS TO SELL CAR PRODUCERS RATHER PERSON BUYING

VARIABILITY: DEMAND NEWSPAPERS CONSTANT DAY TO DAY. DEMAND A&E MORE DEPENDANT ON DATE TIME INCIDENT OCCURED

IDENTIFYING OPERATIONS OBJECTIVES

ANALYSING EXISTING POSITION RELATION OPERATIONS

CHOOSING ACTIONS TAKEN ACHIEVE OBJECTIVES

IMPLEMENTING DECISIONS

REVIEWING SEE ON TARGET - TAKE ACTION IF NOW

ILLERATIVE PROCESS - BACK AND FORTH DIFFERENT STAGES

REWARDING EMPLOYEES: INCREASE LOAD INCREASE STRESS LEVELS

LOCATION: LOW WAGE LOCATION GOOD COSTS BUT EXPLOITING WORKFORCE

SAFETY FEATURES: AVOID SAFETY FEATURES PRODUCT REDUCE COSTS

ENVIORNMENT: WORRY ABOUT COSTS? SUPPLIERS TRANSPORT GOODS?

COMPETIVNESS DEPENDS BENEFITS RELATIVE PRICE

EXCELLET VALUE FOR MONEY = COMPETITIVE

OPERATIONS DELIVER ACTUAL GOODS / SERVICES RESPONSIBLE LOT OF COSTS

MAINTAIN EXCELLENCE ONGOING IMPROVEMENTS

VALUE OFFERED IMPROVINNG CONSTANTLY - PRESSURE ALL BUSINESS' REVIEW AND DEVELOP OPERATIONS

QUALITY

SPEED RESPONSE

FLEXIBILITY

COSTS TARGET

DEPENDABILITY

ENVIORNMENTAL 

EITHER MANTAINING OR IMPROVING

E.G. COMPANY MAY AIM ENSURE 95% PRODUCES LAST 5 YEARS

AIM REDUCE CUSTOMER COMPLAINTS

SPEED IMPORTANT

MEAN DECREASING PRODUCTION TIME / WAITING CUSTOMER TIME

GET NEW PRODUCTS MARKET QUICKLY

CLOSELY RELATED EFFICENCY 

NEED TO BE ABLE REACT CUSTOMER WANTS

E.G. NEED VARY AMOUNT GOODS / SERVICES BEING PRODUCED SO VOLUME DOESNT EXCEED DEMAND

SOME COMPANIES DO THIS BY EMPLOYING 0 HOUR CONTRACTS

FIRMS AIM CUT COSTS ESPECIALLY COMPETE PRICE

CUT FIXED / VARIABLE COSTS

RESTRUCTURE REMOVE LAYER MANAGEMENT

INDIVIUDAL PRODUCT REDUCED

CUSTOMERS NEED ABLE DEPEND BUSINESS

BUSINESS NEED DEPEND SUPPLIERS

RELIABLE BUSINESS CHARGE MORE GOOD / SERVICES

PRESSURE CUSTOMERS / GOVERNMENT

LEAD FIRM SETTING OBJECTIVES

E.G. CUTTING CARBON EMISSION

USE RECYCLED RAW MATERIALS

OPERATIONS WORK OTHER AREAS

MARKETING ACTIVIES: DETERMINE WHATS PRODUCED / HOW - CUSTOMER WANT FREE RANGE & QUANTITYS

HUMAN RESOURCES: DETERMINE POSSIBLE. NUMBER SKILLS OF STAFF INFLUENCE PROVIDED

FINANCE: AFFECT LEVEL INVESTMENT IN TECHNOLOGY AFFECT PRODUCTION

GREATER LEGAL REGULATION ON HEALTH & SAFETY

RESTRICTIONS PRODUCTION / HOW AND WHERE

SOME COUNTRIES BAN GAMBLING - ONLINE GAMBLING COMPANIES CANT OFFER SERVICES

GREATER GLOBALISATION SOURCE SUPPLIES EASILY COUNTRIES

REMOVAL BARRIERS TRADE

IMPROVEMENTS TECHNOLOGY / COMMUNICATIONS ENABLED MORE GLOBAL

GREATER DEMAND CHOICE / VARIETY

EASY SEARCH ALTERNATIVES

MORE CHOICE ABROAD - CHEAPER AND FASTER

MANAGERS WATCH COMPETITORS WORLDWIDE

ADVANCES QUICKER DEVELOP / TEST / LAUNCH PRODUCT

CONSIDER INVEST PRODUCT

ENABLES OPERATIONS EXIST / NEW PROCESSES DEVELOP

CAN DISRUPT INDUSTRY E.G. E-BOOKS AND BOOKS

RADICAL CHANGES EFFECT BUINESS DO / SKILLS REQUIRED

GREATER DEMAND CUSTOMERS REALISE POWER

BUSINESS TRY OFFER MORE AT REDUCED COST

HARD BALANCE

OBJECTIVES DEPEND MANAGER THINKS IMPORTANT

INFLUENCED RIVALS DOING

INFLUENCED RESOURCES BUSINESS

CHANGE E.G. RYANAIR DISAPOINT FINANCIAL PEFROMANCE MORE EMPHASIS CUSTOMER SERVICE