Operations Management

Chapter 2 - The Role of Operations in

Organisation
 Topic & Structure of the lesson

• Operations: functional concern

• Operations: inter – functional concern
• Operations manager

Business Operations
 Learning Outcomes

At the end of this module, YOU should be able to:

• Define the scope of the operations departments as a

functional and inter-functional concern
• Understand the roles and responsibilities of operation
managers
• Provide an explanation of the relationship for which the
operations function serves as a strategic element for an
organisation

Business Operations
 Key Terms you must be able to use

If you have mastered this topic, you should be able to use

the following terms correctly in your assignments and
exams:

•Function
•Role
•Operation manager

Business Operations
 Main Teaching Points

• Operations: functional concern

• Operations: inter – functional concern
• Operations manager

Business Operations
 Definitions

• Systems
– A set of INTERCONNECTED FUNCTIONS
designed to produce or provide a pre-determined
range of products
• Organisation
– A system of various functions. Departments are
function based

Business Operations
 OPERATIONS:
FUNCTIONAL CONCERN

Business Operations
 Functional concern

• Organisations assign each function to

separate departments which assume certain
responsibilities for certain activities

Business Operations
 Relevant skill areas

Functions Skill areas

•Accounting Quantitative methods
Types •Marketing Organisational behaviour
of •Finance Gen. management
•Operations
Organisations Management of IS
•Human Resources
•Distribution Economics

•Engineering International business

Business ethics and Law

Business Operations
 OPERATIONS:
INTER – FUNCTIONAL CONCERN

Business Operations
 Inter functional concern

• Operations function intercept with other

functional areas.
• Implications
– Decisions made in one area are affected by
decisions made in other areas

Business Operations
 Inter functional concern

Marketing

Engineering Accounting
Operations

Human
resources Finance

Business Operations
 OPERATIONS MANAGER

Business Operations
 Role: Manager of cost centre

• Manages large number of people – 70% -

80% of all employed
– Direct workers (involved in main thrust of
activities) and support staff
• Effective use of 70% - 80% of
organisational total assets
– Fixed assets (land, buildings, plant, equipment)

Business Operations
 Role: Manager of cost centre

• Has the largest budget within an organisation

• Ensures operations budget and output levels
are met for cost structure of the business to
be sound

Business Operations
 Role: To ensure efficiency

• Provision of goods or provision of service is a short

term function (efficiency)
- Daily activities must be well controlled,
co-ordinated and meet budgeted output.
- Imperative that pro rata daily target is
met or surpassed.
• Long term concerns should not be overlooked
(effectiveness)
– Remember change of focus from Production to
Operations.
– Small percentage savings can lead to large actual
savings
Business Operations
 Role: Manager of technology

• Needs to understand the level of technology

involved and how this fits into total job
• No needs to master complexity of technology
itself

Business Operations
 Role: Overall manager

• Breaks down functional tasks into

subsystems as a way to control the whole
task
• At the same time, tries to control the total
system as well

Business Operations
 Role: Interphase

• Provides essential link between “thinking end”

(strategy) and “doing end” (operational)
– corporate view and operational tasks
– corporate philosophy and view of work life by
those who complete task.

Business Operations
 Role: Manager of complexity

• Complexity can be seen:

– Size and diversity of tasks
– Size of investment and cost
– Coordinating inter-relationship between tasks and
people

Business Operations
 Quick Review Question

•State the various roles of a operation manager.

Business Operations
 Follow Up Assignment

• Read Chapter 1 of Principles of Operations

Management by Jay Heizer and Barry Render

Business Operations
 Summary of Main Teaching Points

• Operations: functional concern

• Operations: inter – functional concern
• Operations manager

Business Operations
 Question and Answer Session

Q&A

Business Operations
 Next Session

Chapter 3 – Operational Concern

Business Operations