ROLE OF OPERATIONS MANAGEMENT

Strategic role of operations management

Involves managing the transformation of inputs into outputs, aimed at cost leadership and differentiation of goods/services.

Cost leadership

A strategy that involves aiming to have the lowest costs or to be the most price-competitive in the market.

Balance between cost and quality

The need to balance higher quality inputs and processes, leading to higher product costs, against the desire to minimize costs.

Standardisation

Producing homogenous or identical products to achieve economies of scale.

Product differentiation

Distinguishing products in some way from those of competitors, generally resulting in increased costs.

Perishable goods

Goods with a limited life, requiring high standards of quality and quick production and distribution.

Non-perishable goods

Goods with unlimited life and increased durability, allowing longer production and storage times.

Intermediate goods

Goods processed more than once, where the output of one business is the input for another.

Interdependence

The mutual dependence that the key business functions have on one another.

Operations

Core processes of transformation and production in manufacturing and service sectors, focusing on efficiency, quality control, and cost management.

Marketing

Aims to satisfy consumer needs and wants through product offerings, directly influencing operations.

Finance

Manages financial transactions, including income statements, balance sheets, and budgets for strategic decision-making.

Human Resources (HR)

Covers all aspects of employee management to ensure the business has the right people and skills for strategic goals.