Businesses survive by selling products. These products may be goods, like food or washing machines, or services, like banking. Producing these is what the business does to make money. Porter in his model identifies operations as a primary activity that produces these products and services. It is a key element in the transformation model of organisations in which inputs are transformed into outputs with added value.
We take a slightly broader view here and define operations management as "concerning all the processes of how products are made and delivered to the customer" such that it may involve part of Porter's other primary activities of inbound and outbound logistics and procurement. It involves all the parts of the business which produce and deliver the goods or services - a very wide spread. From buying raw materials to transporting the products to the customer and all that happens between, the operations system involves a wealth of different activities which are focused on delivering to the customers what they require.
For a washing machine manufacturer, it involves buying, making and storing parts, ensuring the right parts are available, assembling them into a finished machine and delivering that machine to the right customer. In a bank, it would involve the cashiers' work - exchanging payment, cashing cheques, answering queries - carrying out the transactions, managing accounts and sending statements and letters to customers.
In this unit, you will gain some insight into the scope and challenges of operations for a range of businesses and an overview of some recent developments in the field.
After participating in this course, you should be able to:
- outline the scope of operations using different definitions
- apply the transformational model of operations to a range of service and manufacturing industries
- apply the concept of adding value to operations
- describe the different activities within operations and the interaction between them
- explain the five key features of operations
- describe some design features in operations
- define what quality means from a business perspective.
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