TABLE OF CONTENTS After studying this chapter, students should be able to describe:
the nature of operations in business;
the significance of the value chain;
the types and costs of stock;
the processes involved in purchasing and in the management of inbound logistics;
the common types of manufacturing system;
the processes involved in distribution and outbound logistics.
Operations management is perhaps the most important function of any organisation. This is because of its crucial role in the success or otherwise of the business. Let us first define this function: Operations management is directly responsible for the planning, direction and control of the fundamental activities necessary for the organisation to achieve its objectives. These activities will be to make, sell or provide products or services.
We can note immediately that this direct responsibility is what distinguishes operations from other functions. In a car manufacturer, the operations function is that part of the business which makes the cars.
Without this part of the business, it makes little sense to have a finance function, human resource management (HRM) function, or any other important though those functions are. Other functions exist to support operations; without which, they would have no reason to be (see the distinction between line and staff employees under Section 21.3).
It is perhaps appropriate to consider some examples:
| Type of organisation | Operations function |
|---|---|
| Manufacturing company | Factory |
| Newcastle United Football Club | Newcastle United Football Team |
| Restaurant | Kitchen and waiters |
| University | Lecturers and researchers |
An example close to...
