HND in Business

Management
BHND5202
Operations Management
QCF Level: 5
Credit Value: 20
Lecturer: Shehani Hitibandara
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 Unit Aim

 This unit aims to understand the effective

use of organisational resources in order to
achieve efficient output of goods and
services. It also addresses the quality
management, lean production, and
inventory management issues related to
productivity concerns in organisations.
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 Unit Learning Outcomes

On successful completion of this unit a learner will:

 Understand the strategic role of operations management in sustaining

firm’s competitive advantages
 Understand the competitive priorities in product and service design
 Understand the interdependence of the operations function with the
other key functional areas of a firm
 Understand the planning, organizing and controlling functions of the
conversion system
 Be able to apply analytical skills and problem-solving tools to
operations problems

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 Reference Materials
 Reid, R. D. & Sanders, N. R., 2011. Operations Management: An
Integrated Approach. Fourth ed. United States of America: John
Wiley & Sons, Inc..
 Stevenson, W. J., 1999. Production Operations Management. sixth ed.
USA: McGraw Hill
 Kumar, S. A. & Suresh, N., 2009. Operations Management. New
Delhi: New Age International Publishers.
 Russell, R. S. & Taylor, B. W., 2000. Operations Management. 3rd ed.
USA: Prentice Hall.
 Adam, E. E. & Ebert, J. J., 1992. Production and Operations
Management: Concepts, Models and Behaviour. 5th ed. New Delhi:
Prentice Hall of India.
 Meredith, J. R., 1992. The Management of Operations: A Conceptual
Emphasis. 4th ed. USA: John Wiley & Sons Inc..

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 Assessment Strategy

Assessment Type Duration/Length of Weighting of Approximate

Assessment Type Assessment Date of
Submission
Coursework Individual 50% End of the term
3000 words
Classroom activities Group work 50% Mid term
3000 words equivalent

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 Lesson 01
Introduction to operations
management

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 The Content
 Operations
 Major functional areas of the business and their
interconnections
 Manufacturing Operations vs Service Operations
 Operations management
 Key Elements
 Evolution of OM

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 Operations
 Transformation process of inputs such as material, machine, labor,
management, capital into outputs such as good or services. (Russell
& Taylor, 2000)

Figure 1: The
Transformation Process

Source: (Reid & Sanders,

2011)

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 Major functional areas of the
business and their interconnections

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 Manufacturing Operations vs Service
Operations
 Which sectors?
 Manufacturing: mainly deliver
goods
 Service: mainly deliver services
 Difference in between goods
and services
 Customer contact
 Uniformity of input
 Labour content of jobs
 Uniformity of output
 Measurement of productivity
 Quality assurance Figure 2: Manufacturing Vs. Service
Source: (Reid & Sanders, 2011)

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 Goods and Service Continuum

(Pearson Education, 2014)

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 Industry and Services as Percentage of
GDP service manufacturing

90 −
80 −
70 −
60 −
50 −
40 −
30 −
20 −
10 −
0−
France

UK
Czech Rep

Japan

Mexico
China

Spain
Russian Fed

US
Canada

South Africa
Hong Kong

Turkey
Australia

Germany

© 2011 Pearson Education, Inc. publishing as Prentice Hall

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 Operations Management
 The business function responsible for planning, coordinating
and controlling the resources needed to produce a companies
goods or services (Reid & Sanders, 2011)

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 Key Elements
• Operations strategy • Location analysis

• Product design • Capacity planning

• Process selection • Facility layout

• Supply chain management • Job design and work

measurement
• Quality management
• Inventory management
• Forecasting
• Scheduling

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 Figure 5: Information flow between OM and other business functions
Source: (Reid & Sanders, 2011)
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 Evolution of OM
Era Events/Concepts Dates Originator
Steam engine 1769 James Watt
Industrial
Division of labor 1776 Adam Smith
Revolution
Interchangeable parts 1790 Eli Whitney
Principles of scientific
1911 Frederick W. Taylor
management
Scientific Time and motion studies 1911
Frank and Lillian
Management Gilbreth
Activity scheduling chart 1912 Henry Gantt
Moving assembly line 1913 Henry Ford

Hawthorne studies 1930 Elton Mayo

Human 1940s Abraham Maslow

Relations Motivation theories 1950s Frederick Herzberg

1960s Douglas McGregor

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 Evolution of OM Cont…
Era Events/Concepts Dates Originator
Linear programming 1947 George Dantzig
Digital computer 1951 Remington Rand
Simulation, waiting
Operations Operations research
line theory, decision 1950s
Research groups
theory, PERT/CPM
1960s, Joseph Orlicky, IBM
MRP, EDI, EFT, CIM
1970s and others
JIT (just-in-time) 1970s Taiichi Ohno (Toyota)
TQM (total quality W. Edwards Deming,
1980s
management) Joseph Juran
Quality
Strategy and Wickham Skinner,
Revolution 1990s
operations Robert Hayes
Business process Michael Hammer,
1990s
reengineering James Champy
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 Evolution of OM Cont…
Era Events/Concepts Dates Originator
Globalization WTO, European Union, 1990s Numerous countries
and other trade 2000s and companies
agreements
Internet Internet, WWW, ERP, 1990s ARPANET, Tim
Revolution supply chain Berners-Lee SAP,
management i2 Technologies,
ORACLE,
PeopleSoft
E-commerce 2000s Amazon, Yahoo,
eBay, and others

Source: Russell & Taylor, 2006

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 Activity
 Illustrate the transformation process (inputs, process and
output) of one selected organization
 Place below industries in the appropriate place of the goods
and service continuum
 Consulting service
 Teaching
 Advertising agency
 Investment management
 Textile industry
 Identify three major functional areas of a business and briefly
describe how they are interrelated

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