5.1: The role of operations management
Definitions
1. Ecological sustainability is the capacity of the natural environment to meet the needs of
the current generation without compromising the ability of future generations to meet
their needs.
2. Economic sustainability is the development that meets the economic needs of the present
generation using existing available resources without compromising the ability of future
generations to meet their needs.
3. Operations management is concerned with providing the right goods and services in the
right quantities and at the right quality level in a cost-effective and timely manner.
4. Social sustainability is the ability of the society to develop in such a way that it meets the
wellbeing needs of the future and current generation.
Relationship between operations management and other departments of a
business.
1. Marketing
● Production method will highly impact the quality and the individuality of the product.
● Output of a luxury product → Marketed at a higher price.
● Firms that rely on high volume of sales to gain high profits tend to increase their
distribution networks to ensure maximum sales.
2. Human Resource Management
● Change in production method → Change in the number of people in the workforce.
● Job production techniques require training whereas mass production techniques need bare
minimum of training.
● Flow production suffers from teamwork while cell production benefits from teamwork.
● Easier to hire workers for mass production projects.
3. Finance
● Capital intensive firms requires lots of finance for operations.
● Contingency fund may be used to finance breakdowns or help with the operations if an
emergency takes place.
Operations management and the provision of goods and services
Go back to 1.1 document.
Ecological sustainability
● Ability of the natural environment to meet the needs of the current generation without
compromising the ability for the future generations to meet the needs.
● Example includes oil going down the oceans, which affects the lives of animals living in
the oceans, making them extinct very quickly.
● Lack of ecological sustainability → Exhausting earth’s natural resources for future
generations.
● Requires firms to consider more environmentally friendly practices.
Social sustainability
● Examines the social interactions and structure necessary for sustainable development.
● Most firms started to employ women as their employees to consider them equal as men.
● Removing social inequalities → Better chance at achieving sustainable development.
● Many people expect firms to be socially responsible. If not, it will create negative
publicity → Damaged reputation and brand image.
● Socially responsible and ethical firms talk to all the important stakeholders when making
an important decision.
Economic sustainability
● Ability for the economic needs to meet the current generation without compromising
future generations to meet those needs.
● Overuse of certain output makes it harder to sustain for future use, such as overuse of
land in different locations for operations.
● Rapid economic growth could lead to pollution and environmental damage and depletion
of world’s scarce resources.
● Makes firms to be more environmentally friendly, by recycling materials used in their
products → Improves business operations in the long run.