Operations Management: An Overview

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Questions and Answers

Which of the following best describes the core concept of 'Operations' in a business context?

  • The financial activities related to budgeting, accounting, and investment.
  • The management of resources and processes to produce and deliver goods and services. (correct)
  • The strategic planning involved in setting long-term goals for the organization.
  • The process of marketing and selling goods and services to customers.

In the context of operations, 'inputs' are transformed into 'outputs.' Which of the following is typically considered an input?

  • Finished goods ready for sale.
  • Raw materials used in production. (correct)
  • Delivered services to customers.
  • Profits generated from sales activities.

Which of the following correctly sequences the stages of transforming inputs into outputs?

  • Transformation -> Inputs -> Outputs
  • Inputs -> Outputs -> Transformation
  • Inputs -> Transformation -> Outputs (correct)
  • Outputs -> Transformation -> Inputs

What is the primary focus of the 'Direct' stage in a business's operational cycle?

<p>Steering and overseeing current operational processes (C)</p> Signup and view all the answers

Which of the following activities is most aligned with the 'Design' phase of operations management?

<p>Developing new service blueprints to enhance customer experience. (C)</p> Signup and view all the answers

In the context of operations management, what does the 'Develop' stage primarily aim to achieve?

<p>To enhance and refine the operations' capabilities continuously. (C)</p> Signup and view all the answers

The 'Deliver' stage of operations management is characterized by which activity?

<p>Planning and controlling ongoing operational tasks. (D)</p> Signup and view all the answers

Which aspect of operations management directly addresses the planning and execution of project timelines?

<p>Sequencing/Scheduling (B)</p> Signup and view all the answers

The 'Bullwhip Effect' is most closely associated with challenges in which area of operations management?

<p>Supply chains (B)</p> Signup and view all the answers

What is the primary goal of 'Lean Operations'?

<p>To reduce waste and improve efficiency in the production process. (A)</p> Signup and view all the answers

What does JIT, as a concept in operations, aim to achieve?

<p>Products arriving exactly when needed (C)</p> Signup and view all the answers

Which of the following activities falls under the umbrella of operations management?

<p>Managing resources and processes to produce services. (D)</p> Signup and view all the answers

In the context of Table 1.1, which activity BEST showcases the application of operations management in a fast-food chain?

<p>Providing processes and the equipment to produce burgers. (B)</p> Signup and view all the answers

What is the BEST definition of Operations Management?

<p>The business function that organizes and controls the resources needed to produce a company's goods and services. (B)</p> Signup and view all the answers

What is the difference between 'transforming resources' and 'transformed resources'?

<p>'Transforming resources' are people and facilities that act upon other resources; 'transformed resources' are materials, information, and customers that are acted upon (C)</p> Signup and view all the answers

As described in Table 1.2, what BEST describes the main input of a 'warehouses' business?

<p>The materials. (D)</p> Signup and view all the answers

What is the primary distinction between a product and a service in the context of operations?

<p>Products are physical items, while services are activities or processes. (D)</p> Signup and view all the answers

What does the IHIP characteristic 'Intangibility' mean?

<p>It is difficult to define the 'boundary' (C)</p> Signup and view all the answers

What does the IHIP characteristic 'Heterogeneity' mean?

<p>Every service is different and difficult to standardize. (B)</p> Signup and view all the answers

What does the IHIP characteristic 'Inseparability' mean?

<p>Production and consumption are simultaneous (B)</p> Signup and view all the answers

What does the IHIP characteristic 'Perishability' mean?

<p>An operations output is difficult to store and ceases to have value after a relatively short time. (C)</p> Signup and view all the answers

In the hierarchy of operations, which level focuses on the overall network of suppliers and distributors?

<p>Supply Chain (C)</p> Signup and view all the answers

Within the hierarchy of operations, what does 'Operations Flow' primarily concern itself with?

<p>The flow of goods and information within a single organization. (C)</p> Signup and view all the answers

At which level of the operations hierarchy would you typically analyze the specific sequence of actions taken by a worker assembling a product?

<p>Process Flow (A)</p> Signup and view all the answers

When considering the '4 Vs' of operations, what does 'Volume' refer to?

<p>The overall amount of output produced in a given timeframe. (C)</p> Signup and view all the answers

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Flashcards

What are 'Operations'?

The activity of managing resources and processes to produce and deliver goods and services.

What are Transformed Resources?

Resources like materials, information, and customers that are transformed in operations.

What are Transforming Resources?

Resources like facilities and staff that act upon transformed resources.

What is Operations Management (OM)?

Planning, organizing, coordinating, and controlling the resources needed to produce goods and services.

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What entails Operations Management?

The business function where marketing, product/service development, and operations overlap.

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What is Physician's surgery?

How operations management uses our knowledge to effectively diagnose conditions in order to treat real and perceived patient concerns

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What is Automobile assembly factory?

How operations management uses machines to efficiently assemble products that satisfy current customer demands

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What is Management consultancy?

How operations management uses people to effectively create the services that will address current and potential client needs

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What is Disaster relief charity?

How operations management uses our and our partners' resources to speedily provide the supplies and services that relieve community suffering

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Advertising agency?

How operations management uses our staff's knowledge and experience to creatively present ideas that delight clients and address their real needs

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What is Operations Management?

The management of systems or processes that create goods and/or provide services.

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What is Intangibility?

The characteristic of services where they are intangible and difficult to define boundaries.

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What is Heterogeneity?

The characteristic of services where every service is different and difficult to standardize.

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What is Inseparability?

The characteristic of services where production and consumption occur simultaneously.

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What is Perishability?

The characteristic of services that are difficult to store and cease to have value after a short time.

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What is Hierarchy of Operations?

Operations at different levels, from the supply chain network to the process level.

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The Supply Network

The network of suppliers, service providers and distributors that an organization uses.

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The Operations

The flow between processes

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The Processes

Flow between resources

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Study Notes

  • Nigel Slack , Alistair Brandon-Jones and Nicola Burgess wrote "Operations Management"
  • Dr. Mohammed El-Beheiry

What is Operations?

  • Operations manages resources and processes to produce and deliver goods and services
  • Operations transforms resource inputs into product and service outputs
  • This process is called the ‘input-transformation output’ model of operations

Business Operations

  • Direct: steering operations and processes
  • Design: shaping processes, products, and services
  • Develop: improving operations capabilities
  • Deliver: Planning and controlling ongoing operations, adding value for customers

Topics Covered

  • Introduction to operations management and operations strategy
  • Product development, process and capacity design
  • Demand forecasting
  • Process design for services and manufacturing
  • Quality management
  • Introduction to supply chains and the Bullwhip Effect
  • Planning and Control – Sequencing/Scheduling of operations
  • Overview of the materials planning process
  • Lean Operations and Just-in-Time (JIT)
  • Facility layout and location
  • Operations improvement and international operations management

Course Grade Breakdown

  • Course Project (Group Project) is 20%
  • Quizzes (2 Quizzes) are 15%
  • Mid-Term Exam is 25%
  • Final Exam is 40%

Operations Management (OM) definition

  • The business function plans, organizes, coordinates, and controls to produce a company’s goods and services

The Transformation Process

  • Transforming resources are people and facilities
  • Transformed resources are materials, information, and customers

Outputs

  • Operations creates products and services
  • Products are physical things
  • Services are activities or processes

IHIP Characteristics

  • Used to distinguish the different types of output
  • Intangibility means it is difficult to define the boundary of service
  • Heterogeneity means every service is different, difficult to standardize, and may be outside operational capabilities
  • Inseparability means the production and consumption are simultaneous, requiring sufficient capacity to meet demand
  • Perishability means operations are difficult to store, and cease to have value after a short time

Goods vs Services

Characteristic Goods Service
Output Tangible Intangible
Customer contact Low High
Uniformity of input High Low
Labor content Low High
Uniformity of output High Low
Measurement of productivity Easy Difficult
Opportunity to correct quality problems High Low

Hierarchy of Operations

  • Supply Chain
  • Operations Flow
  • Process Flow

Operations: Supply Network

  • Supply Network flows between operations
  • Operations flows between processes
  • Processes flow between resources (people or facilities)

Operations Typology

Characteristic Low High
Volume of output Low High
Variety High Low
Variation High Low
Visibility High Low

Implications according to Typology

Low High
Volume Low Repetition, Each Staff Member Performs More of Job, Less Systemization, High Units cost High Repeatability, Specialization Capital Intensive, Low unit costs
Variety Flexible, Complex, Match Customer Needs, High Unit Costs Well-Defined, Routine, Standardized, Regular, Low Unit Costs
Variation Changing Capacity, Anticipation, Flexibility, In-Touch With Demand, High Unit Costs Stable, Routine, Predictable, High Utilization, Low Unit Costs
Visibility 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

Key questions

  • Important to understand how different operations are positioned on the 4 Vs
  • Is their position where they want to be?
  • Do they understand the strategic implications?

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