5.1 The role of operations management COPY Flashcards
What is meant by operations management?
Operations management is the process of providing the right goods and services at the right time and at the right quantities at the right quality level in a timely and cost-effective manner.
What is the relationship between operations management and the other functions of a business (finance, human resources and marketing)?
Finance - capital intensity and lean production require heavy investment in machinery and equipment
HRM (Human resource management) - a change in production methods can either reduce or increase the size of the workforce
Marketing - the production method used will affect both the quality and the individuality of the product
How does operations management apply to all production sectors of the economy?
Primary sector: extracting raw materials, harvesting, rearing
E.g. mining, agriculture, fishing
Secondary sector: turning natural resources into processed or finished goods
E.g. steel production, car manufacturing
Tertiary sector: the provision of services
E.g. finance, insurance, travel and tourism, transportation
Quaternary sector: the provision of intellectual, knowledge-based activities that generate and and share information
E.g. ICT, R&D, consultancy services
What is the production (or transformation) process?
the method of turning factor inputs into outputs by adding value in a cost-effective way.
How does the production process ‘add value’ to output of goods and services?
The factors of production are commonly known to marketing and production managers as the Five Ms - materials, manpower, money, machines and management. The 5Ms can be a useful tool in devising both marketing and production plans. They are combined in a cost-effective way to ensure that there is value-added during the production stage of the transformation process
