Operation management

The Operation management is the activity of managing the resources which produce and deliver products and services. It is one of the core functions of any business. Operations function is the part of the organisation that is responsible for this activity. Every organisation produces some type of product or services so it has an operations function. However not all organisations call the operations function by its name.

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The people who have the responsibility of managing the resources which compose the operations function are known as the operations manager. Each organisation may call their operations manager by different names. For e. g. in a hospital they are known as ‘administrative mangers’ and in supermarkets they are known as ‘store managers’. Operations function is important to any organisation as it produces the goods and services- the reason why an organisation exists for.

It is one of three core functions but there are also support functions that enable the core functions to work effectively, these are: Operations function which is responsible for fulfilling customer requests for service through the production and delivery of products and services Product/service development function which is responsible for creating new and modified products and services in order to generate future customer requests for service Marketing function which is responsible for communicating the organisation’s products and services to its markets in order to generate customer requests for service Human resources function which recruits and develops the organisation’s staff as well as looking after their welfare Accounting and finance function which provides the information to help economic decision-making and manages the financial resources of the organisation As different organisations call their functions by different names so they will have different supporting functions. But an organisation must have three core functions as the organisation needs to sell their product and services, satisfy their customer and create the means to satisfy their customers in the future. Sometimes there is not a clear division between the core functions and supporting functions. All operations produce products and services by transferring the inputs into outputs using an ‘input-transformation-output’ process.

Operations are processes that take in a set of input resources to transform them into outputs of products and services. All processes can be applied to this model but they differ in the nature of their specific inputs and outputs. The other set of inputs to any operations process are known as transforming resources. These resources act upon the transformed resources. There are two types which form the ‘building blocks’ of all operations: Facilities- the buildings, equipment, plant and process technology of the operation Staff – the people who operate, maintain, plan and manage the operation The nature of both facilities and staff will differ between operations.

Services may have a shorter stored life whereas products can be stored at least once. Products are tangible whereas services are not. Mostly, operations produce either just products or services but most produce a mixture of both. All operations are service providers which may produce products as part of serving their customers. It is not just the operations function that manage processes; all functions manage processes. For e. g. the marketing function will have processes that produce demand forecasts, processes that produce advertising campaigns and processes that produce marketing plans. These processes in the other functions also need managing using similar principles to those within the operations function.

Operations management is relevant for all functions and so all managers should have something to learn from the concepts, principles, approaches and techniques of operations managements. There are two meanings of operations: Operation as an activity meaning the management of the processes within any of the organisations functions Operation as a function meaning the part of the organisation which produces the products and services for the organisations external customers Businesses always attempt to satisfy their customer’s needs by using many processes, in both its operations and other functions. Each of these processes will contribute some part in fulfilling the customer needs. Customer needs for each product are entirely fulfilled from within an ‘end-to-end’ business process.