Operations management involves using resources like land, labor, capital, and enterprise to efficiently produce goods and services. Managers focus on converting inputs into outputs through a transformational process to add value. They aim to increase productivity through employee training, motivation, technology, and management while distinguishing between efficiency and effectiveness. Managers must also choose between labor-intensive or capital-intensive approaches based on factors such as product type, costs, business size, and access to financing.
Operations management involves using resources like land, labor, capital, and enterprise to efficiently produce goods and services. Managers focus on converting inputs into outputs through a transformational process to add value. They aim to increase productivity through employee training, motivation, technology, and management while distinguishing between efficiency and effectiveness. Managers must also choose between labor-intensive or capital-intensive approaches based on factors such as product type, costs, business size, and access to financing.
Operations management involves using resources like land, labor, capital, and enterprise to efficiently produce goods and services. Managers focus on converting inputs into outputs through a transformational process to add value. They aim to increase productivity through employee training, motivation, technology, and management while distinguishing between efficiency and effectiveness. Managers must also choose between labor-intensive or capital-intensive approaches based on factors such as product type, costs, business size, and access to financing.
(Transformational) Process management: resources management involves (land, labor, capital, strategically using enterprise) for goods and resources—land, labor, services. capital, and enterprise—to • Factors of produce goods and production: land, labor, services, emphasizing the capital, enterprise. conversion of inputs into • outputs efficiently. Transformational process: • Factors of convert inputs to achieve production include: added value. • Land: • Operations Essential for business contribute to added value: operations, varying from manage efficiency, quality, small spaces to large sites. flexibility, innovation. • Labor: Manual or mental skills contribute to operational success; quality can be improved through training. • Capital: Tools, machinery, and intellectual capital play a crucial role in efficient operations; intellectual capital is gaining importance in knowledge-based economies. • Enterprise: Decision-making skills and risk-taking qualities of entrepreneurs are vital for new business formation. • The transformational process converts factors of production into outputs, applicable to both manufacturing and service industries, aiming to achieve added value. • Contribution of operations to added value includes managing efficiency, quality, flexibility, and innovation.
23.2: Efficiency, • Operations aim for • Operations
Effectiveness, Productivity, efficient input-to-output management focuses on and Sustainability conversion. converting inputs into • Productivity: outputs efficiently, with a relative measure, vital for keen emphasis on competitiveness. productivity as a key factor • Labor in determining business productivity measured by competitiveness. units per worker. • Productivity, • Increase a relative measure, is crucial productivity: training, for competitiveness; labor motivation, technology, productivity, measured by management. the number of units per • Efficiency worker, illustrates efficiency. and effectiveness are • Ways to distinct but crucial. increase productivity • Sustainability include: actions: reduce energy, use • Improving recyclable materials. employee training and skill levels, acknowledging that skilled workers enhance productivity. • Enhancing worker motivation through financial and non-financial methods, considering the importance of motivated employees in efficient operations. • Investing in technologically advanced equipment for increased output with fewer workers. • Emphasizing effective management for overall productivity improvement. • Raising productivity does not guarantee success, highlighting factors such as product popularity, worker resistance, and the quality of management. • A distinction between efficiency (measured by productivity) and effectiveness (meeting customer needs) is crucial. • Sustainability in operations involves actions such as reducing energy use, using recyclable materials, and addressing environmental concerns. 23.3: Labour Intensive and • Managers choose • Operations Capital Intensive Operations labor or capital-intensive managers must decide approaches. between labor-intensive and • capital-intensive approaches Labor-intensive: small, based on factors like the custom, skilled but low nature of the product, brand output. image, costs, business size, • and access to finance. Capital-intensive: • economies of scale, quality, Labor-intensive production high fixed costs. suits small businesses with • Choice unique, customized factors: product nature, products but has limitations brand, costs, business size. like low output and skilled labor requirements. • Capital-intensive production offers economies of scale, consistent quality, and low unit costs but has limitations like high fixed costs and rapid technological changes. • The choice depends on the specific circumstances of the business, emphasizing the importance of aligning production methods with business needs.
(Production) Methods flow, mass customization. include job production, • Job: unique, batch production, flow expensive, labor-intensive. production, and mass • Batch: customization, each with its identical products, some unique characteristics. economies of scale. • Job • Flow: production involves continuous, mechanized, producing single, one-off low labor costs. products, often expensive • Mass and labor-intensive. customization: flexibility, • Batch technology, customized at production produces scale. identical products in groups, • Factors allowing some economies of influencing choice: market, scale. capital, resources, customer • Flow demand. production is continuous and suits high-demand standardized products, often mechanized with low labor costs. • Mass customization combines flexibility and technology for customized products at high volumes. • Factors influencing the choice of methods include market size, available capital, resources, and customer demand, highlighting the need for strategic decision-making.
complex products adapting. are evolving to adapt to • Technology consumer demands, challenges traditional emphasizing the importance differences. of strategic flexibility. • Demand for • Technology’s original products from flexibility challenges smaller firms remains. traditional business differences, showcasing the need for businesses to stay adaptable. • The demand for original and specialized products from smaller firms remains, emphasizing the continued relevance of various production methods.