Operations Management Summary

What is Operations Management?

• Responsible for efficient delivery of goods and services.
• Achieved through process design, planning, and workforce involvement.
• Efficiency: Good process design.
• Effectiveness: Meeting customer needs.

Importance of Operations Management

• Reducing costs through efficient operations.
• Enhancing revenues through quality, service, and innovation.
• Minimizing capital needed.
• Developing capabilities to serve markets effectively.

Input-Process-Output Model

• Resources: fixed assets, materials, and information.
• Operations produce goods/services customers want, at the right time and place.
• Transformation processes: material, information, and customer.

Types of Transformation Processes

• Material processing: Manufacturing, mining, logistics.
• Information processing: Banking, accounting, news services.
• Customer processing: Hotels, hairdressers, hospitals.

Types of Transformational Change

• Physical transformation: Food preparation, machining.
• Informational transformation: Data processing, recording information.
• Possession transformation: Retail operations, data sharing.
• Location transformation: Logistics, customer transport.
• Storage transformation: Storing inventory, data.
• Physiological/psychological transformation: Medical treatments, counseling.

Transformation Processes at a Bakery

• Dominant: Material processing.
• Also includes information and customer processing.
• Examples of transformational change:
  • Physical: Converting flour into bread.
  • Informational: Customer orders into schedules.
  • Possession: Selling bread to customers.
  • Location: Moving bread to customers.
  • Storage: Storing raw materials.
  • Physiological/Psychological: Reassuring customers.

Transformation Processes at a Library

• Dominant: Information processing.
• Includes Material and Customer Processing.
• Examples of transformational change:
  • Physical: Minor material processing of books.
  • Informational: Processing real-time data.
  • Possession: Books change possession temporarily.
  • Location: Books moved from return to shelves.
  • Storage: Book storage.
  • Physiological/Psychological: Customer interactions and services.

Similarities and Differences

• Bakery: Tight schedule, specific quantities.
• Library: Flexible customer arrival/departure, customer-focused activities.

Case Study: Starbucks

• Material processing: Coffee beans to beverages
• Customer processing: Enhancing customer experience
• Informational processing: Tracking customer preferences
• Transforms: Physical, Informational & Psychological

Case Study: Amazon

• Material processing: Storing and shipping products
• Informational processing: Managing databases and tracking shipments
• Location transformation: Moving goods
• Transforms: Possession, Location & Informational