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What is Operation management?
Operations management involves managing resources for the production and delivery of goods and services, emphasizing customer value and efficient processes. It encompasses transformation processes where inputs are converted into outputs, with a focus on continuous improvement and customer satisfaction. The document also contrasts characteristics of goods and services and outlines operational typologies based on demand variation and service visibility.
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What is Operation management?
- 1. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Chapter 1 What is operations management?
- 2. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services. Operations management defined
- 3. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 The operations function is fashionable! The consultancy services market – % of world revenues of 40 largest consultancy firms Marketing / sales 2 Operations and process management 31 Corporate strategy 17 IT strategy 17 Benefits / actuarial 16 Organizational design 11 Financial 6
- 4. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 They are all operations Back office operation in a bank Kitchen unit manufacturing operation Retail operation Take-out / restaurant operation
- 5. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Creating Customer Value
- 6. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 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 Operations management at IKEA
- 7. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 All operations are transformation processes … Transformation processInputs that transform inputs … Outputs into outputs
- 8. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Transformed resources … Transforming resources … Customers Output products and services Input resources Some inputs are transformed resources Some inputs are transforming resources Outputs are products and services that add value for customers Transformation process
- 9. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Transformed resources … ? Served and satisfied customers Input resources Transforming resources … ? At Prêt a Manger
- 10. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Characteristics of Goods v Services Product Inventory Customer Contact Response times Markets Facilities Capital Labour Quality Contrast the characteristic differences between Manufacturing and Services over the following factors:- Manufacturing <> Service
- 11. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Differences within sectors are often greater than the differences between sectors Financial services An account management centre at a large retail bank Financial analyst advising a client at an investment bank Furniture manufacturing Mass production of kitchen units Craft production of reproduction ‘antique’ furniture Hotels Value-for-money hotel Lobby of an international luxury hotel
- 12. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 A Typology of Operations Variation in demand High Low VisibilityHigh Low VarietyHigh Low HighVolumeLow High
- 13. Slack, Chambers andJohnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 A Typology of OperationsImplications Implications Changing capacity Anticipation Flexibility In touch with demand High unit costs Stable Routine Predictable High utilization Low unit costs Variation in demand High Low VisibilityHigh Low Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit costs Time lag between production and consumption Standardization Low contact skills High staff utilization Centralization Low unit costs Flexible Complex Match customer needs High unit costs Well defined Routine Standardized Regular Low unit costs VarietyHigh Low High Low repetition Each staff member performs more of job Less systemization High unit costs High repeatability Specialization Capital intensive Low unit costs VolumeLow High