The new operations agenda

The new operations agenda The business environment has a significant impact on what is expected from operations man-agement. In recent years there have been new pressures for which the operations function has needed to develop responses. Table 1.2 lists some of these business pressures and the operations responses to them. These operations responses form a major part of a new agenda for operations. Parts of this agenda are trends which have always existed but have accelerated, such as globaliza-tion and increased cost pressures. Part of the agenda involves seeking ways to exploit new tech-nologies, most notably the internet. Of course, the list in Table 1.2 is not comprehensive, nor is it universal. But very few operations functions will be unaffected by at least some of these concerns.
All operations create and deliver services and products by changing inputs into outputs using an ‘input—transformation—output’ process. Figure 1.4 shows this general transformation pro-cess model. Put simply, operations are processes that take in a set of input resources which are used to transform something, or are transformed themselves, into outputs of services and products. And although all operations conform to this general input—transformation—output model, they differ in the nature of their specific inputs and outputs. For example, if you stand far enough away from a hospital or a car plant, they might look very similar, but move closer and clear differences do start to emerge. One is a service operation delivering ‘services’ that change the physiological or psychological condition of patients, the other is a manufactur-ing operation creating and delivering ‘products’. What is inside each
operation will also be different. The hospital contains diagnostic, care and therapeutic processes whereas the motor vehicle plant contains metal forming machinery and assembly processes. Perhaps the most important difference between the two operations, however, is the nature of their inputs. The hospital transforms the customers them-

  • Operations principle All processes have inputs of transforming and transformed resources that they use to create products and services.
    selves. The patients form part of the input to, and the output from, the operation. The vehicle plant transforms steel, plastic, cloth, tyres and other materials into vehicles.
    Table 1.2 Changes in the business environment are shaping a new operations agenda
    The business environment is changing . . . Prompting operations responses . . .
    For example… For example…
    Increased cost-based competition Higher quality expectations Demands for better service More choice and variety Rapidly developing technologies Frequent new product/service introduction Increased ethical sensitivity Environmental impacts are more transparent More legal regulation Greater security awareness

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Globalization of operations networking Information-based technologies Co-creation of service Internet-based integration of operations activities Supply chain management Customer relationship management Flexible working patterns Mass customization Fast time-to-market methods Lean process design Environmentally sensitive design Supplier ‘partnership’ and development Failure analysis Business recovery planning

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