© cambridge university press 2012 chapter one role of operations management topic 1 operations
TRANSCRIPT
© Cambridge University Press 2012© Cambridge University Press 2012
CHAPTER ONE
ROLE OF OPERATIONS
MANAGEMENT
Topic 1 Operations
© Cambridge University Press 2012
Syllabus Agenda• Role Of Operations Management
– strategic role of operations management – cost leadership, good/service differentiation
– goods and/or services in different industries– interdependence with other key business
functions
© Cambridge University Press 2012
The creation of goods and the provision of services by businesses The transformation of inputs into outputs or products to be sold. This involves:
• planning activities• purchasing inputs • managing inventory• selecting and implementing manufacturing processes• developing strategies to gain a sustainable
competitive advantage.
Role of Operations management
© Cambridge University Press 2012
Involves gaining a long term competitive advantage over its competitors, by local and overseas. May also use either a cost leadership or product differentiation strategy.
Strategic role of Operations
© Cambridge University Press 2012
Strategic operations decisions focus on:• Products to be created• How to produce products• Capacity or size of operations• Organisation of inputs and equipment
in operations• Location of operations• Employees used in operations• Quality.
Strategic role of Operations (cont.)
© Cambridge University Press 2012
A strategy where a business aims to obtain an advantage over its competitors by being the lowest cost manufacturer within its industry.
Cost leadership Operations strategy
© Cambridge University Press 2012
Activity Time• Complete the following activity sheets:
– Activity 1.1 True False– Activity 1.2 Cloze passage– Activity 1.3 Match the definitions
© Cambridge University Press 2012
Creating a low cost basis may be achieved by:
• Using less expensive inputs
• Maximising efficiency by minimising waste and saving time
• Maximising productivity producing more outputs from less inputs
• Using technology
• Producing faster
• Having lower quality outputs
• Increasing size of operations to reduce the average cost of making each item.
Cost leadership Operations strategy (cont.)
© Cambridge University Press 2012
Video: How Its made- chocolate• Watch the
following video and then answer the following questions :
© Cambridge University Press 2012
How its made - Chocolate - Questions
• What could they use as less expensive inputs in the chocolate process?
• What is an example of maximising efficiency and minimising waste and saving time in this video?
• Are there any ways you can think of that they may have used to maximise productivity producing more outputs from less inputs?
• Name 2 ways that they could use technology to create a customised output?
• What did they use to produce a faster product in the video?• When would chocolate manufacturers want to have a lower quality
output?• Would increasing the size of operations reduce the average cost of
making each item? Why/Why not?
© Cambridge University Press 2012
Aims to obtain an advantage over its competitors by having outputs that are different to its competitors, unique or leading edge technology.
Achieved through having:
• better quality outputs
• quicker supply of outputs
• custom designed outputs and/or more varieties to suit different needs
• more features, applications and versatility
• new technology incorporated.
Good/Service Differentiation Operations strategy
© Cambridge University Press 2012
Goods outputs•physical, tangible •can be reused •more capital intensive (machinery)•can be stored•hard to modify once manufactured.
Goods and services in different industries
© Cambridge University Press 2012
Services•intangible•can only be used by one customer once•more labour intensive •more interaction with customers•easier to change and customise.
Goods and services in different industries (cont.)
© Cambridge University Press 2012
• Mining industry
• Retailing
• Education
• Banking & Finance
• Construction
• Tourism
Goods and services in different industries (cont.)
© Cambridge University Press 2012
• Specialisation – where the business is separated into
different functions each of which is highly skilled at its
specific task or role.
• Interdependence – where the different parts of a
business must rely on each other to perform their task
or role.
Interdependence of operations with the other key business functions
© Cambridge University Press 2012
As a result of specialisation, there will be
interdependence between the key business
functions and a constant flow of information
between Operations, Marketing, Finance and
Human resources.
Interdependence of operations with the other key business functions (cont.)
© Cambridge University Press 2012
Creating Connections Activity