QTM

• Operations management is the management of the processes that transform inputs into the goods and services that add value for the customer.
• Every day, you use a multitude of physical objects and a variety of services, most of which have been manufactured and provided by people in organizations.
• Just as fish are said to be unaware of the water that surrounds them, most of us give little thought to the organizational processes that produce these goods and services for our use.
• The study of operations deals with how the goods and services that you buy and consume every day are produced.
• A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients.
• Where the inputs are raw materials, it is relatively easy to identify the transformation involved, such as when milk is transformed into cheese or butter.
• Where the inputs are information or people, the nature of the transformation may be less obvious.
• For example, a hospital transforms ill patients (the input) into healthy patients (the output).
• Changes in the physical characteristics of materials or customers are transformations.
• Changes in the location of materials, information or customers are transformations.
• Changes in the ownership of materials or information are transformations.
• Storage or accommodation of materials, information or customers is a transformation.
• Changes in the purpose or form of information are transformations.
• Changes in the physiological or psychological state of customers are transformations.
• Often all three types of input – materials, information and customers – must be transformed by a single organisation.
• For example, withdrawing money from a bank account involves information about the customer’s account, materials (such as cheques and currency), and the customer.
• Lean production, which focuses on the elimination of all forms of waste from a production system, is another approach for managing operations.
• Mass customisation, which seeks to combine high volume, as in mass production, with adapting products to meet the requirements of individual customers, is a third approach for managing operations.
• An unforeseen challenge to Western manufacturers emerged from Japan with new Japanese production techniques, such as total quality management (TQM), just-in-time (JIT) and employee involvement.
• Flexible specialization, in which firms focus on separate parts of the value-adding process and collaborate within networks to produce whole products, is one approach for managing operations.
• Services have a higher amount of customer contact than manufacturing organizations.
• Producing goods involves the creation of a tangible product such as a vehicle, an article of clothing, a cell phone or a shovel.
• Agile manufacturing, which emphasizes the need for an organization to be able to switch frequently from one market-driven objective to another, is a fourth approach for managing operations.
• Producing services involves an intangible such as a car repair, a haircut, or a medical treatment.
• The mass production paradigm has been replaced, but there is yet no single approach to managing operations that has become similarly dominant.
• Services have a much higher degree of input variability than do manufacturing companies.
• There are key differences in managing the production of goods and services.
• During the 1970s, markets became highly fragmented, product life cycles reduced dramatically, and consumers had far greater choice than ever before.
• Measurement of quality is much more straight-forward in a manufacturing setting.
• Mass production worked well as long as high volumes of mass-produced goods could be produced and sold in predictable and slowly changing markets.
• Measurement of productivity is more difficult in a service setting.
• Several different transformations are usually required to produce a good or service.
• Treating a patient in hospital involves not only the “customer’s” state of health, but also any materials used in treatment and information about the patient.
• Human Resources ensures that the correct employees, with the adequate skills and experience are recruited, hired and trained.
• The goal or purpose of most organizations involves the production of goods and/or services.
• Major innovations are made through operations.
• The overall transformation can be described as the macro operation, and the more detailed transformations within this macro operation as micro operations.
• Transformation processes can be categorized into four groups: manufacture (the physical creation of products, e.g. automobiles), service (the treatment of customers or storage of products, e.g. hospitals or warehouses), supply (a change in ownership of goods, e.g. retail), and transport (the movement of materials or customers, e.g. taxi service).
• Operations embraces all the activities required to create and deliver an organization’s goods or services.
• The other three departments ensure that the operations of the business has everything needed in order to do the work.