Chapter

1
What is operations
management?

Contents

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
IKEA
Conclusions

Introduction
Model

Q1:
Examples
Changing

Q3:
4Ds
Q2:
Input
Process
Output

Q4:
Model
IKEA

Conclusions

Q1: Why is operations management important in all types of

organization?

Q1: Why is operations management important in all types of

organization?
The business environment is
changing, 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

chalengi
Environmental impacts
are more
ng

Increased ethical sensitivity

transparent

More legal regulation

Greater security awareness

changi
ng

Prompting operations responses, for

example
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

intresti
ng

Q2: What is the input-transformation-output process?

Operation

Some of the operations Some of the operations

Some of the operations

inputs
Aircraft
Pilots and air crew
Ground crew
Passengers and freight

processes
Check passengers in
Board passengers
Fly passengers and freight
around the world
Care for passengers

outputs
Transported passengers
and freight

Products for sale

Sales staff
Information systems
Customers
Police
Police officers
Computer systems
Information systems
Public (law-abiding and
criminals)
Frozen food Fresh food
manufacturer Operators
Processing technology
Cold storage facilities

Source and store products

Display products
Give sales advice
Sell products
Crime prevention
Crime detection
Information gathering
Detaining suspects
Source raw materials
Prepare food
Freeze food
Pack and freeze food

Customers and products

assembled together

Airline

Department
store

Lawful society, public with

a feeling of security

Frozen food

De
th vel
e
op op:
er Im
at pr
io o
n vin
sc g
ap
ab
ili

tie
s

Q3: What are the activities of operations management?

Bottom
Q4: What is operations management?
Transformed
resources
Materials
Information
Customers

Resource
Driven
Strategy

Input
Design
resource
s
Lean Strategy:
Low end customer
Low cost operation
Transforming
efficient supply network
resources

FacilitiesLow cost strategy

Staf

Up
Strategy

Direct

Transforma
tion
Process

Develop

Deliver

Top
Down
Strategy

Agile Strategy:
VIP customer
innovative operation
responsive supply
network
differentiation Strategy

Output
products
and
services

Market
ValueLeading
added
for
Strategy
customers

Q4: What is operations management?

Design elegant
products which can
be flat-packed
efficiently

Design a store layout

which gives smooth
and efective flow

Continually examine
and improve
operations practice

Site stores of an
appropriate size in
the most efective
locations

Maintain cleanliness
and safety of
storage area

Ensure that the jobs of

all staf encourage their
contribution to business
success

Arrange for fast

replenishment of
products

Monitor and enhance

quality of service to
customers

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 to implement the operations strategy of
the organization.

Conclusions
In the traditional world of work, management was to control
and limit people, enforce rules and regulations, seek stability
and efficiency, design a top-down hierarchy, and achieve
bottom-line results.
The new workplace asks that managers focus on leading
change, harnessing peoples creativity and enthusiasm, finding
shared visions and values, and sharing information and power.
Teamwork, collaboration, participation, and learning are guiding
principles that help managers and employees maneuver the
difficult terrain of todays turbulent business environment.
Managers focus on developing, not controlling, people to adapt
to new technologies and extraordinary environmental shifts,
and thus achieve high performance and total corporate
effectiveness.