The main function of a business is to produce
goods and services which are desired by their
customers

What is the main function of a business
organisation?
◦ Think about – What a business is? Why do
businesses open? What is the reason for the
existence of a business?
◦ http://www.youtube.com/watch?v=LeeTy3YaMu0

The main function of a business organisation is
to produce goods or services which are desired
by their customers
 Eg Why did apply bring out the iPhone 5 – because that is
what the customers desired!

To achieve this goal, oragnisations must
develop facilities and systems which produce
the products or services in the most efficient
and effective manner – whilst still ensuring high
quality
 Copy
diagram from page 229 and
230 into work books
◦ This diagram represents the 3
different elements of Operations
Management
Production
Systems
Ethics and
social
responsibility
Concepts of
Operations
Management
Goods V
Services
operations
Operations
Management
Decisions



Actual production of goods and services are known as
operations
Operations – Part of the organisation that “gets the job done”
– the “engine room” that supports the organisations objectives
Operations are the core activity of an organisation
◦ Core activities describe an organisations main areas of production or
reasons for being in business.
 For example – McDonalds core activities are customer service, provide
customers with quality burgers


Think of a popular fast food business – what are the core
activities of this business?
As a class discuss:
◦ What are objectives? Explain the relationship between an organisation’s
operations and objectives?


The production system is the part of the
organisation that produces its goods and
services by transforming inputs into desired
outputs
Three key elements of production systems:
◦ Inputs (Resources – raw materials, labor, electricity, tools)
◦ Processes (Steps taken to produce a good or service)
◦ Outputs (Actual unit that is produced)

Main priority of an organisations operations
managers is productivity

Productivity is measured as the output from a
quantity of inputs.

Read p231, 232

Service industries are different to manufacturing.
◦ What has improved productivity in the past 50 Years?
◦ List some service industries.
◦ Identify 3 areas of productivity improvements in service
industries.
•
To create desired products or services from a series of
raw materials
•
Transformation is possible through the
implementation of the operations system
•
Operations system – part of the organisation that produces
goods or services
•
1.
2.
3.
3 KEY ELEMENTS
Inputs
Processes
Outputs

Typical inputs in an
operations system
◦ Human skill/effort
(Labour)
◦ Raw Material (water,
trees, electricity, oil,
timber, plastic)
◦ Facilities (factories,
office buildings)

Typical outputs in an
operations system
◦ All those different
goods and services that
we see for sale
◦ Eg. Blackberry, iPhone,
iPad, water bottle, text
book, pencil,
hairdresser, beautician,
dentist, doctor
INPUTS
•
•
•
•
•
•
•
Plant Facility
Equipment
Plastic
Electrical Parts
Paper
Power/Fuel
Labour
PROCESSES
• Assesmbly
• Testing
• Design
• Production of
instructions,
warranty
OUTPUTS
• Washing
Machine

Two important aspects of operations
management are
◦ Strategic planning
◦ Operational planning and control

Operations managers role to ensure that the
production processes achieve the
organisational goals

Strategic Planning
◦ Operations managers have to make – or be involved
in decisions at the strategic level of a business

Planning Decisions
◦ Made at an operational level about day to day
operations of the business
STRATEGIC DECISION




Marketing of what is produced
Actual mix of goods and services
Design of production facilities
Maintaining quality
PLANNING DECISION




What are the stock levels
Type of maintenance
Layout of processes
Scheduling of production processes

To coordinate the transformation of inputs
into desired goods and services
Titles
 Factory Manager
 Materials Manager
 Production Manager
 Quality Manager
 Supply Manager

P233 1-5

P235 questions 1 and 2

Expert jigsaw poster activity

HOMEWORK: page 235 question 1 (a-d)

Must look at
◦ Productivity
◦ Transformations (Inputs and Outputs)
◦ Plus your own research from the text book and the
internet
◦ Include pictures, diagrams anything you think that
will make your poster a useful resource for revision

Must look at
◦ Strategic V Planning Decisions
◦ Roles of the operation manager
◦ Plus your own research from the text book and the
internet
◦ Include pictures, diagrams anything you think that
will make your poster a useful resource for revision