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1 The Role of Operations management

Operations: is the key business function concerned with the transformation of inputs into outputs. Operations management: is concerned with those business activities that plan, schedule and control the business inputs that are transformed into finished goods and services. 1.1.1 The Strategic Role of Operations Management The strategic role of operations management involves operation managers contributing to the strategic direction or strategic plan of the business. Generally the overarching goal of the business is to maximise profits. Operations managers will make strategic decisions (affects the business in the long term) that will cover three broad areas: Planning Production and Delivery, Controls to Manage quality and improving the Efficiency of Operations.

Cost Leadership A Cost Leadership is where a business aims to be the lowest cost manufacturer within its industry. Cost leadership is achieved by cheap expenses/ running cost, standised product, lower cost margin distribution, bulk buy and outsourcing product servicing.

Good/Service Differentiation Good/Service Differentiation involves differentiating its products/services from market competitors to satisfy consumer desire. Goods Differentiation is done by: Varying the actual product features Varying product quality Varying any augmented features

Services Differentiation is done by: Varying the amount of time spent on a service Varying the level of expertise brought to a service Varying the qualifications and experience of the service provider Varying the quality of materials/technology used in service delivery

1.1 The Role of Operations Management

1.1.2 Goods and/or Services in Different Industries It is very difficult to find a business that is a producer of only goods or services. Most businesses will produce a combination of goods and services, although businesses will regard themselves as primarily a provider of one or the other.

1.1.3 Interdependence with other key business functions Key business functions are the range of tasks that a business engages in order to produce its outputs and thereby achieve its goals. The key business functions are: Operation, human resources, marketing and finance. Operations is the core key business function it is the reason that the business exists because it produces its outputs and by doing so achieve the goals of the business. Operations has a direct link to all other business functions. Human resources management links to operations because generally most of the employment in any business will be in operations. Operations is told by marketing what to produce to meet consumer demand by identifying the target market for the product. Finance makes a budget which the operations ha to work around and also finance operation projects.