5.1. The role of operations management

The role of operations management

The overall objective of operations is to use a transformation process to add value and create competitive advantage. It involves taking input resources and transforming them into outputs of products or services for customers. Operations management involves the design, implementation and control of these processes.

The Operations Function

Organisations will invariably have an operations function. The operations function might be considered as one of the three traditional ‘core functions’.

1. Operations – this is responsible for fulfilling customer orders and requests through production of the goods and services, and for delivery of products and services to the customer.
2. Marketing and sales – this is responsible for identifying customer needs and perhaps more significantly, for communicating information about the organisation’s products or services to customers so as to procure sales orders
3. Product and service department – this is responsible for designing new products and services that will meet customer needs to generate sales orders

There are also support functions within an organisation that help the core functions to operate effectively. Traditionally, support functions might include accounting, HR and IT. However, organisations that rely heavily on technology may consider IT a core function.

1) Operating Core – people involved producing products and services by transforming inputs such as stock using operations such as manufacturing

2) Middle line – the hierarchy linking the strategic apex to the operating core. Usually comprises first line supervisors up to senior managers

3) Strategic Apex – formulates and implements strategy – and if applicable links the organisation to those who own or control it

4) Techno structure – co-ordinates through standardising processes, outputs and skills e.g. HR managers

5) Support staff – Provide services and assistance outside the work flow e.g. catering, cleaning and PR

Task 2: Give five reasons for the central importance of production/operations within the strategic analysis process

Task 3: The management of PD Ltd have estimated the probable demand for a new product which is about to be launched on the market as follows:

Operations management strategies and practices for ecological, social and economic sustainability

Sustainability in operations management

For organisations, sustainability involving developing strategies that balance environmental, economic and social needs. The eventual aim is that the organisation only uses resources at a rate that allows them to be replenished, and that emissions of waste are at a level the environment is able to absorb.

Triple bottom line (or otherwise noted as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and financial. Many organizations have adopted the TBL framework to evaluate their performance in a broader perspective to create greater business value.