Operations Management - Introduction

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Introduction to Operations Management

Introduction by Ian Holden, Lecturer in Operations Management, University of the West of England, Bristol

Operations management is concerned with the efficient and effective transformation of inputs into "desired outputs". Traditionally those outputs have been understood largely in manufacturing terms and in the context of profit making organisations. Increasingly, however, it has been recognised that the disciplines of the operations manager can be deployed in virtually any area where a purposeful system or organisation is striving to achieve its objectives. For example, the public and non-profit sectors have had to learn to optimise their internal processes in the context of constrained resources; service organisations, such as insurance companies, have found that by critically re-appraising their delivery processes they can revolutionise their approach to their marketplace and manufacturing companies. A specific example from the private sector is Daewoo, which has realised that it can differentiate its product by selling an explicit bundle of benefits, including supporting services. Operations is at the heart of all these changes.

The Decision-making Process

In the commercial sector survival is dependent on an organisation's ability to shape and focus its operational resources to meet its stakeholders' expectations (its customers, employees and shareholders), expressed through the organisational strategy. In the public sector the ability of, for example, an NHS hospital to deliver high class patient care, or of universities to deliver high class education, is fundamentally dependent on the skill with which managers design services and implementation processes, deploy resources and monitor and control performance. Regardless of which sector they operate in, the ability of operations managers to fulfil those tasks is dependent on understanding that they have to make trade-offs. They cannot avoid working under constraints and in each situation there will be some things that they can do well and some they can do less well. Understanding their capabilities and constraints will facilitate current utilisation and provide inputs into strategic decision-making about future resources.

Strategy

In neither the private or public sectors can operations make strategic decisions. It should, however, make a contribution to strategic thinking and to do that operations managers have to understand how the different components of the operations package can be put together to achieve what the strategists are aiming for. Operations managers need to be able to translate strategic objectives into clear operational objectives and to design, implement and improve both the "products" themselves and the processes by which they are delivered. They have to understand how changes to external factors impact on the operation and how changes in one part of the operating system impact on every other part. They need to understand how changes in technologies impact on the organisation's delivery capability, for example, and to feed this back into the strategic process. At the heart of operations thinking, therefore, lies the ability to think systematically and dynamically across space and time.

Value of the Web

The Web is of great value to students of operations management and, by visiting a selection of relevant sites, it is possible to get an introduction to many current developments. The environment in which operations managers operate is subject to rapid change and the Web provides international access to a range of information about products that are available on the market. Being able to use the Web to scan for and obtain at least a basic understanding of the latest modelling, analysis and control tools is a great advantage for the operations manager. There are a multitude of companies with a presence on the Web who make their living by selling 'off-the-shelf solutions' to operations problems. By visiting their sites it is possible to gain greater understanding of what is available and so develop answers that are strategically justifiable to a particular organisation. This chapter shows the range of companies which are advertising on the Web and provides a good starting point for understanding the complex environment in which operations managers work.

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