The Role Of Operations Management

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BU S IN E S S
O P E R A T IO N S :
IN VE STIG ATIO N AN D
RE PORT

Christal . Le!

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TABLE OF CONTE NTS
Executive summary

3

Strategic Role of operations management

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Operational Strategies

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Conclusion

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E X E C U TIVE S U M M A RY
Operation refers to the coordination of those activities in a business that are involved in combining inputs for the purpose of producing an output that is valued by consumers. The operations department is responsible for acquiring the inputs and devising the best production methods so that value adding occurs in the most efficient and effective way. Thus, the role of operations management (and the operations manager) is to ensure a smooth production process that contributes to the output of goods and services of an organization.
The five strategies that will be discussed in this report is performance objectives, supply chain management, new product or service design and development, inventory management and technology. All factors that aid in operational strategies to enhance a business’ profitability and hence achieve business goals. Throughout the report we will investigate how Toyota, Qantas, Kellogg's, David Jones and Apple implement these different operational strategies into their business.

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S TRATE G IC RO LE O F O PE RATIO N S
MANAGEMENT
The strategic role of operations management in business is to ensure that the goals of the business are met. In order for a business to achieve their goals, the operations management must identify strategic methods to the business such as cost leadership and good/ service differentiation.
Cost leadership
Cost leadership refers to the strategies to produce goods or services at the lowest possible cost whilst the product is still acceptable to customers. By reducing the costs of production and distribution, a business will be able to minimize overheads and maximize profits therefore gain an advantage over competitors. However, it is important that customers see that they are gaining value for money, otherwise this strategy will not see long term rewards for the business. If the strategy is successful, the business will become the leading provider of a particular good or service based on their lowered costs.
Good/Service differentiation
Product differentiation is the way that a business will make their good or service stand out in the marketplace. A business will use differentiation so that they can improve sales and/ or charge a higher price. For example, airlines will try to differentiate their product so as to attract consumers. Businesses can differentiate themselves from others by changing obvious aspects such as price, quality or performance but also in more innovative ways such as changing the technology used in the process, speeding up delivery time and building alliances.
Interdependence with other key business functions
The operations department brings together the materials and the activities needed for the production of goods and services to meet consumer demand. It also shares ideas across the business about how to improve processes or achieve cost savings to bring about best practice. The operations manager will liaise with the other departments. They may discuss staffing and training and development needs with the Human Resources department, discuss financing requirements with the Finance department and discuss product design with the Marketing department.

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O P E R A T IO N A L S T R A T E G IE S
Performance Objectives
Performance objectives are the key areas of focus for Operations and therefore part of a business’ competitive strategy. These goals are usually involve quality, speed, dependability, flexibility, customisation and cost. Regular monitoring and control will ensure that performance objectives are met.
Quality calls upon a business to ensure having the utmost premium goods and services.
Good quality prevents costs to customers by product recalls and repairs. A
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