How to PRODUCE goods and services. The activity of managing the resources which produce and deliver products and services.

The operations function makes the products and the services. It should exchange information with all other departments.

Input-Transformation-Output. Inputs are resources which are transformed into the products and services.

Operations consists of a collection of processes interconnecting with each other to form a network. Each process acts as a smaller version of the whole operation its part of.

In any operation, the mechanism that actually transforms inputs into outputs are these processes.

Although all operations processes are similar in that they all transform inputs, they do differ in a number of ways. • Volume of output: High volume of O/P (McDonalds) means people are doing repeated tasks and the systemization of the work means standard procedures are set down specifying how each part of the job should be carried out. All this gives low unit costs. Low volume of O/P (Small Cafeteria) means repetition will be low and the number of staff will be lower to perform wide range of tasks. No systemization hence unit costs is high. • Variety of output: High variety service means high cost (TAXI). Low variety gives low costs. (BUS) • Variation in Demand pattern: Low variation in demand pattern results in high utilization of resources and unit costs. High variation in demand pattern (summer resorts) which has no customers in winter.

The activities of Operation Managers:
1. Understand what it is trying to achieve. How to judge the performance of the operations at different levels. CH2
2. Decision making should be towards organization’s long term goals. CH3
3. Designing the operation’s products, services and processes. It determines the physical form, shape and composition of products, services and processes. CH 4-9
4.