The first lesson of Operations Management in 20 minutes prepared for a competition at my working university.

1. Chapter 1
What is operations management?

2.  Q1: Why is operations management important in all types of
organization?
 Q2: What is the input-transformation-output process?
 Q3: What are the activities of operations management?
 Q4: What is operations management?
 General Model
 IKEA
Conclusions
Contents

3. Q1: Why is operations management important in all types of organization?

4. The business environment is
changing, for example…
Prompting operations responses, for
example…
 Increased cost-based competition
 Higher quality expectations
 Demands for better service
 More choice and variety
 Rapidly developing technologies
 Frequent new product/service
introduction
 Increased ethical sensitivity
 Environmental impacts are more
transparent
 More legal regulation
 Greater security awareness
 Globalization of operations networking
 Information-based technologies
 Co-creation of service
 Internet-based integration of operations
activities
 Supply chain management
 Customer relationship management
 Flexible working patterns
 Mass customization
 Fast time-to-market methods
 Lean process design
 Environmentally sensitive design
 Supplier ‘partnership’ and development
 Failure analysis
 Business recovery planning
changing
Q1: Why is operations management important in all types of organization?
chalenging
intresting

5. Predominantly
processing inputs of
materials
Predominantly
processing inputs of
information
Predominantly
processing inputs of
customers
All manufacturing
operations
Mining companies
Retail operations
Warehouses
Postal services
Container shipping line
Trucking companies
Accountants
Bank headquarters
Market research
company
Financial analysts
News service
University research unit
Telecoms company
Hairdressers
Hotels
Hospitals
Mass rapid transports
Theatres
Theme parks
Dentists
Q2: What is the input-transformation-output process?

6. Operation Some of the
operation’s inputs
Some of the operation’s
processes
Some of the operation’s
outputs
Airline Aircraft
Pilots and air crew
Ground crew
Passengers and freight
Check passengers in
Board passengers
Fly passengers and freight
around the world
Care for passengers
Transported passengers
and freight
Department
store
Products for sale
Sales staff
Information systems
Customers
Source and store products
Display products
Give sales advice
Sell products
Customers and products
‘assembled’ together
Police Police officers
Computer systems
Information systems
Public (law-abiding and
criminals)
Crime prevention
Crime detection
Information gathering
Detaining suspects
Lawful society, public with
a feeling of security
Frozen food
manufacturer
Fresh food
Operators
Processing technology
Cold storage facilities
Source raw materials
Prepare food
Freeze food
Pack and freeze food
Frozen food
Some operations described in terms of their processes
Q2: What is the input-transformation-output process?

7. Mixture of products and
services – outputs that are
a mixture of the tangible
and intangible
Prèt a manger
Acme whistles
Mwagusi Safari Lodge
Crude oil production
Aluminium smelting
Specialist machine tool
production
Restaurant
Information systems provider
Management consultancy
Psychotherapy clinic
Pure products –outputs
that are exclusively
tangible
Pure services – outputs that
are exclusively intangible
IKEA
Q2: What is the input-transformation-output process?

8. Direct
Design
Delivery
Q3: What are the activities of operations management?

9. Transformation
Process
Input
resources
Output
products and
services
Value-added
for customers
Transformed
resources
•Materials
•Information
•Customers
Transforming
resources
•Facilities
•Staff
Direct Steering
operations and
processes
Deliver Planning
and controlling
ongoing operations
Design Shaping
processes,
products and
services
Develop Improving
the operation’s
capabilities
Q4: What is operations management?

10. Design a store layout which
gives smooth and effective
flow
Design elegant products
which can be flat-packed
efficiently
Site stores of an
appropriate size in the
most effective locations
Maintain cleanliness and
safety of storage area
Arrange for fast
replenishment of products
Monitor and enhance quality
of service to customers
Continually examine and
improve operations practice
Ensure that the jobs of all staff
encourage their contribution to
business success
Q4: What is operations management?

11. Conclusions
• Operations are everywhere
• All operations are input-transformation-output processes
• Managing activities fall into 4Ds
• Operations management is the activity of managing the
resources which are devoted to the production and delivery
of products and services
• Operations management is essential for IKEA’s success