role of operations management

• Operations management


  The role of managing the transformation of inputs into outputs
• Strategic role of operations management

  • Cost leadership
  • Good/service differentiation
• Cost leadership


  Aiming to have the lowest costs or to be the most price-competitive in the market
• Cost leadership strategies


  • Finding ways to minimise costs
  • Balancing cost and quality
  • Achieving economies of scale
• Goods/service differentiation


  Distinguishing products (goods/services) in some way from those of competitors
• Differentiation of goods


  • Varying product features
  • Varying product quality
  • Varying any augmented factors
• Differentiation of services


  • Varying the amount of time spent on a service
  • Varying the level of expertise
  • Varying the qualifications and experience of the service provider
  • Varying the quality of materials/technology used in service delivery
• Types of goods and services


  • Standardised goods
  • Standardised services
  • Customised goods
  • Customised services
  • Perishable goods
  • Non-perishable goods
• Intermediate goods


  Goods processed more than once
• Cost leadership and standardised products

  • Mass production of goods can result in economies of scale
  • Standardising the way a service is performed can lead to cost leadership
• Self-service


  Encouraging customers to take the initiative and help themselves
• Drip pricing


  When a business advertises one price but in the process of a customer purchasing the service, numerous additional charges and costs are added
• Interdependence with other key business functions

  • Marketing
  • Finance
  • Human resources
• Operations and marketing


  Work together to make sure products are of the right standard and available at the right time
• Operations and finance


  Make financial decisions about cost leadership, product quality, and investment
• Operations and human resources


  Hire suitable employees to achieve operations objectives