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Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services.

Operations management defined

The operations function is fashionable!

The consultancy services market % of worldrevenues 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 They are

alloperations

Back office operationin a bank

Kitchen unitmanufacturing

operation

Retail operation

Take-out / restauran toperation

The best way to start understanding the nature ofoperations is to look around you

Everything you can see around you (except the flesh andblood) has been processed by an operation

Every service you consumed today (radio station, busservice, lecture, etc.) has also been produced by anoperation

Operations Managers create everything you buy, sit on,wear, eat, throw at people, and throw away

A general model of

operationsmanagementTransformed resources

MaterialsInformationCustomers

Transforming resources

FacilitiesStaff

CustomersOutput

productsand

services

Inputresources

Planningand

control

ImprovementDesign

Operationsstrategy

The operations

strategicobjectives

The operationscompetitive role

and position

Operationsmanagement

Operationsstrategy

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Some interfunctional relationships between the operationsfunction and other core and support functions

Engineering/ technicalfunction

Accountingand finance

function

Humanresourcesfunction

Informationtechnology(IT) function

Understanding of thecapabilities and

constraints of theoperations process

New product andservice ideas

Understanding of thecapabilities and

constraints of theoperations process

Marketrequirements

Financial analysisfor performanceand decisions

Provisionof relevant

data

Recruitmentdevelopmentand training

Understanding of humanresource needs

Analysis of newtechnology options Understanding of

process technologyneeds

Provision of systems fordesign, planning and

control, and improvementUnderstanding

ofinfrastructuraland system

needs

Marketingfunction

Product/servicedevelopment

function

Operationsfunction

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