In this article introduces the idea of the operations function in different types of organization. It identifies the common set of objectives to which operations managers aspire in order to serve their customers, and it explains how operations can have an important strategic role.
Key questions:
- What is operations management?
- Why is operations management important in all types of organization?
- What is the input–transformation– output process?
- What is the process hierarchy?
- How do operations processes have different characteristics?
- What are the activities of operations management?
What is operations management?
Operations management is the activity of managing the resources which produce and deliver products and services.
The operations function is the part of the organization that is responsible for this activity. Every organization has an operations function because every organization produces some type of products and/or services. However, not all types of organization will necessarily call the operations function by this name. (Note that we also use the shorter terms ‘the operation’ and ‘operations’ interchangeably with the ‘operations function’).
Operations managers are the people who have particular responsibility for managing some, or all, of the resources which compose the operations function. Again, in some organizations the operations manager could be called by some other name. For example, he or she might be called the ‘fleet manager’ in a distribution company, the ‘administrative manager’ in a hospital, or the ‘store manager’ in a supermarket.
Operations in the organization: The operations function is central to the organization because it produces the goods and services which are its reason for existing, but it is not the only function. It is, however, one of the three core functions of any organization. These are:
- the marketing (including sales) function – which is responsible for communicating the organization’s products and services to its markets in order to generate customer requests for service
- the product/service development function – which is responsible for creating new and modified products and services in order to generate future customer requests for service
- the operations function – which is responsible for fulfilling customer requests for service through the production and delivery of products and services.
In addition, there are the support functions which enable the core functions to operate effectively. These include, for example:
- the accounting and finance function – which provides the information to help economic decision-making and manages the financial resources of the organization
- the human resources function – which recruits and develops the organization’s staff as well as looking after their welfare.
Remember that different organizations will call their various functions by different names and will have a different set of support functions. Almost all organizations, however, will have the three core functions, because all organizations have a fundamental need to sell their services, satisfy their customers and create the means to satisfy customers in the future.
**Table 1.1 shows the activities of the three core functions for a sample of organizations.
**Figure 1.1 The relationship between the operations function and other core and support functions of the organization.
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Source:Operations Management Ebook
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