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Organizational Function: Operations


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Organizational Function: Operations

  1. 1. ORGANIZATIONAL FUNCTION: OPERATIONSBy: Maritess Araña-Pagunuran & Noreen M. Morales
  2. 2. OPERATIONS• (pl) the agency of an organization charged with carrying on the principal planning and operating functions of a headquarters and its subordinate units . (merriam-
  3. 3. OPERATIONS• A function or a “presence” that exists within the context of a dynamic and on-going business.• In the broadest sense, it is a service function. (Ferrara Consulting Group)
  4. 4. OPERATIONS MANAGEMENT• is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. It involves managing people, equipment, technology, informati on, and many other resources.
  5. 5. FUNCTIONS• Get things done• Produce goods/services for the customers• Orchestrate all the resources needed to produce the final product• Transform organizational inputs to outputs
  6. 6. Typical Organization Chart © Wiley 2007
  7. 7. The Operations Function Funds Accounting & Finance Operations Purchasing function Marketing Customers Product/ Technical/ Services engineering Dev‟t. Process/technology Product/Service Ideas
  8. 8. Transforming Resources Radio Station School Facilities Broadcasting School equipment buildings Studios and Laboratories studio equipment Textbooks Transmitters Instructional Outside Materials broadcast Computers vehicles AVR, etc.
  9. 9. Transforming Resources Radio Station School Staff  Disc jockeys  Teaching  Announcers 1. Subject  Technicians Teachers  Non-Teaching 1. Maintenance 2. Office Clerks 3. Guidance Staff
  10. 10. The Transformation Process Customer Feedback InputsHuman ResourcesFacilities & The Outputs Transformation Goods ProcessesTechnologies Process ServicesMaterials Performance Information
  11. 11. Roles of Operations Managers -Bridge the gap between high level strategic planning and tactical implementation Indirect – Direct - the the activities activities are involved in directly related the Broad – to producing & wider set of interfacing delivering tasks with other products parts of the organization
  12. 12. Operations Performance Objectives Slack et al. (2004) • Cost • Quality • Speed • Dependability • Flexibility
  13. 13. TRADE-OFF Skinner (1969)•The concept based on the premise that it is impossible to excel simultaneously at all aspects of operations
  14. 14. The “Sandcone” Model ofOperations Excellence(Ferdows and De Meyer, 1990) Cost Flexibility Dependability Quality
  15. 15. CASE STUDY # 1Easy Jet: Low Cost Air TravelAim: Minimize Operations CostThrough… 1. use of the internet to reduce distribution cost 2. ticketless travel 3. no free on-board catering 4. efficient use of airports 5. paperless operations
  16. 16. Four-stage Model of the Strategic Roleof Operations (Hayes and Wheelwright, 1984) INTERNALLY NEUTRAL S The operations function is T internally focused and A reactive. They are viewed as G “necessary evil”. The best that E the org hopes for is that operations “don’t screw up”. 1
  17. 17. Stage 2 – Externally Neutral• The operations function tries to be as good as the competition, or to achieve parity with industry norms.• Is likely to benchmark its operations against its competitors• Adopts best practice in its industry so that it does not hold the organization back
  18. 18. Stage 3 – Internally Supportive• The operations function seeks to provide credible support for the organizations business strategy• Organization’s operations are likely to be amongst the best in its industry• Operations strategy will be developed which will be derived from, and support the business strategy.
  19. 19. Stage 4 – Externally Supportive• The operations function provides the basis of competitive advantage for the organization, by setting the standard in their industry• Is likely to aim to be world class• Operations exceeds customers expectations• Operations is managed proactively
  20. 20. Operations Strategy• Concerns the pattern of strategic decisions and actions which set the role, objectives, and activities of operations (Slack et al., 2004)
  21. 21. Operations Strategy• A pattern in a stream of actions realized through a combination of deliberate and emergent actions (Mintzberg and Waters, 1985)
  22. 22. The Strategy Formation ProcessIntended Strategy Realized Strategy Unrealized Strategy Emergent Strategy
  23. 23. Operations StrategyA. Process Four Top Down Perspectives Operations - Operations Market - led Strategy led Bottom up (Slack & Lewis, 2002)
  24. 24. Operations StrategyB. Content1. Structural Decision – often involves major capital investment decisions a. Facilities b. Capacity c. Process Technology d. Supply Network
  25. 25. Operations StrategyB. Content2. Infrastructural Decision a. Planning and Control b. Quality c. Work Organization d. Human Resources f. New Product Development g. Performance Measurement
  26. 26. CONCLUSIONSA well-defined and a robust operations would manifest the following functions:• Actively manage the planning and budget and aggregate findings into a cohesive strategic plan• Provide highly effective tactical execution or program management for all major initiatives
  27. 27. CONCLUSIONS• Provide a bridge between strategic vision and operational readiness• Create a balance between each operating groups to ensure maximum performance• Manage an effective communications process and build consensus
  28. 28. CONCLUSIONS• Implement and manage key quality metrics and performance standards• Manage a human capital plan that includes reliable succession planning• Business process re-engineering and auditing to ensure best practices across all departments
  29. 29. CONCLUSIONS• Manage overall costs and productivity consistent with financial objectives• Provide oversight and guidance in all major third party alliance, including appropriate due diligence• Conduct contract reviews to ensure operational compliance
  30. 30. References:Ferdows, K. and de Meyer, A. (1990) Journal of Operations Management 9 (2); 168-184Hayes, R.H. and Wheelwright, S.C. (1984) Restoring Our Competitive edge: Competing through Manufacturing, New York: John Wily & Sons.Mintzberg, H. and Waters, J.A. (1985) „Of Strategies, deliberate and emergent‟, Strategic Management Journal 6: 257-72.Skinner, W. (1969) „Manufacturing: The missing link in corporate strategy‟, Harvard Business Review 47 (3):136-145Slack, N., Chambers, S., and Johnston, R. (2004) Operations Management (4th edition), Harlow: Pearson EducationSlack, N. and Lewis, M. (2002) Operations Strategy, Harlow: Pearson Educationhttp://www.EasyJet.comhttp://www.ferraraconsulting.comhttp://www.merriam-webster.com