Operations Notes

In: Business and Management

Submitted By zbarrie
Words 3838
Pages 16
Role of operations management
Strategic role of operations
Operations management is an essential key business function that overlaps with the other business functions such as marketing, finance and human resources management.
Strategic means ‘affecting all key business areas’; that is, the strategic role of operations management involves operations managers contributing to the strategic plan of the business.
Some of the different costs in the operations function include; input costs, labour costs, processing costs, inventory costs and quality management costs.
Cost leadership involves aiming to have the lowest costs or to be the most price-competitive in the market. A key aspect to cost leadership is that although trading with the lowest cost, the overall business should still be profitable. One aspect of cost leadership arises from a business creating economies of scale. Economies of scale refers to cost advantages that can be created as a result of an increase in scale of business operations. Typically the cost savings come from being able to purchase lower cost per unit and from efficiencies created through improved use of technology and machinery.
Goods/services differentiation is a key strategy applied by operations managers. Product differentiation means distinguishing products in some way from its competitors. Ways a product could be differentiated include: varying the actual product features, varying product quality, varying any improved features, varying the amount of time spent on a service, varying level of expertise brought to a service, varying qualifications and experience of the service provider and varying the quality of materials/ technology used in service delivery.
For both goods and services, differentiation can be created from cross branding or strategic alliances.
Goods and/or services in different industries

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