1. ORGANIZATIONAL FUNCTION:
OPERATIONS
By: Maritess Araña-Pagunuran & Noreen M. Morales

2. OPERATIONS
• (pl) the agency of an
organization charged with
carrying on the principal
planning and operating functions
of a headquarters and its
subordinate units . (merriam-
webster.com)

3. OPERATIONS
• A function or a “presence” that
exists within the context of a
dynamic and on-going business.
• In the broadest sense, it is a
service function.
(Ferrara Consulting Group)

4. OPERATIONS MANAGEMENT
• is the business function that
plans, organizes, coordinates, and
controls the resources needed to
produce a company’s goods and
services. It involves managing
people, equipment, technology, informati
on, and many other resources.
http://www.scribd.com

5. FUNCTIONS
• Get things done
• Produce goods/services for the
customers
• Orchestrate all the resources needed to
produce the final product
• Transform organizational inputs to
outputs

6. Typical Organization Chart
© Wiley 2007

7. The Operations Function
Funds
Accounting
& Finance
Operations
Purchasing function Marketing Customers
Product/
Technical/
Services
engineering
Dev‟t.
Process/technology Product/Service Ideas

8. Transforming Resources
Radio Station School
Facilities Broadcasting School
equipment buildings
Studios and Laboratories
studio equipment Textbooks
Transmitters Instructional
Outside Materials
broadcast Computers
vehicles AVR, etc.

9. Transforming Resources
Radio Station School
Staff  Disc jockeys  Teaching
 Announcers 1. Subject
 Technicians Teachers
 Non-Teaching
1. Maintenance
2. Office Clerks
3. Guidance
Staff

10. The Transformation Process
Customer Feedback
Inputs
Human
Resources
Facilities &
The Outputs
Transformation Goods
Processes
Technologies Process Services
Materials
Performance Information

11. Roles of Operations Managers
-Bridge the gap between high level strategic
planning and tactical implementation
Indirect –
Direct - the the activities
activities are involved in
directly related the
Broad –
to producing & wider set of
interfacing
delivering tasks
with other
products parts of the
organization

12. Operations Performance Objectives
Slack et al. (2004)
• Cost
• Quality
• Speed
• Dependability
• Flexibility

13. TRADE-OFF
Skinner (1969)
•The concept based on the
premise that it is impossible
to excel simultaneously at all
aspects of operations

14. The “Sandcone” Model of
Operations Excellence
(Ferdows and De
Meyer, 1990) Cost
Flexibility
Dependability
Quality

15. CASE STUDY # 1
Easy Jet: Low Cost Air Travel
Aim: Minimize Operations Cost
Through…
1. use of the internet to reduce distribution
cost
2. ticketless travel
3. no free on-board catering
4. efficient use of airports
5. paperless operations

16. Four-stage Model of the Strategic Role
of Operations (Hayes and Wheelwright, 1984)
INTERNALLY NEUTRAL
S
The operations function is
T internally focused and
A reactive. They are viewed as
G “necessary evil”. The best that
E the org hopes for is that
operations “don’t screw up”.
1

17. Stage 2 – Externally Neutral
• The operations function tries to be as good
as the competition, or to achieve parity with
industry norms.
• Is likely to benchmark its operations
against its competitors
• Adopts best practice in its industry so that it
does not hold the organization back

18. Stage 3 – Internally Supportive
• The operations function seeks to provide
credible support for the organizations
business strategy
• Organization’s operations are likely to be
amongst the best in its industry
• Operations strategy will be developed
which will be derived from, and support the
business strategy.

19. Stage 4 – Externally Supportive
• The operations function provides the basis of
competitive advantage for the
organization, by setting the standard in their
industry
• Is likely to aim to be world class
• Operations exceeds customers expectations
• Operations is managed proactively

20. Operations Strategy
• Concerns the pattern of
strategic decisions and actions
which set the
role, objectives, and activities of
operations
(Slack et al., 2004)

21. Operations Strategy
• A pattern in a stream of actions
realized through a combination
of deliberate and emergent
actions
(Mintzberg and Waters, 1985)

22. The Strategy Formation Process
Intended Strategy
Realized
Strategy
Unrealized
Strategy
Emergent Strategy

23. Operations Strategy
A. Process
Four Top
Down
Perspectives
Operations - Operations Market -
led Strategy led
Bottom
up (Slack & Lewis, 2002)

24. Operations Strategy
B. Content
1. Structural Decision – often involves
major capital investment decisions
a. Facilities
b. Capacity
c. Process Technology
d. Supply Network

25. Operations Strategy
B. Content
2. Infrastructural Decision
a. Planning and Control
b. Quality
c. Work Organization
d. Human Resources
f. New Product Development
g. Performance Measurement

26. CONCLUSIONS
A well-defined and a robust operations
would manifest the following functions:
• Actively manage the planning and
budget and aggregate findings into a
cohesive strategic plan
• Provide highly effective tactical
execution or program management for
all major initiatives

27. CONCLUSIONS
• Provide a bridge between strategic
vision and operational readiness
• Create a balance between each
operating groups to ensure maximum
performance
• Manage an effective communications
process and build consensus

28. CONCLUSIONS
• Implement and manage key quality
metrics and performance standards
• Manage a human capital plan that
includes reliable succession planning
• Business process re-engineering and
auditing to ensure best practices across
all departments

29. CONCLUSIONS
• Manage overall costs and productivity
consistent with financial objectives
• Provide oversight and guidance in all
major third party alliance, including
appropriate due diligence
• Conduct contract reviews to ensure
operational compliance

30. References:
Ferdows, K. and de Meyer, A. (1990) Journal of Operations Management 9 (2);
168-184
Hayes, R.H. and Wheelwright, S.C. (1984) Restoring Our Competitive edge:
Competing through Manufacturing, New York: John Wily & Sons.
Mintzberg, H. and Waters, J.A. (1985) „Of Strategies, deliberate and emergent‟,
Strategic Management Journal 6: 257-72.
Skinner, W. (1969) „Manufacturing: The missing link in corporate strategy‟,
Harvard Business Review 47 (3):136-145
Slack, N., Chambers, S., and Johnston, R. (2004) Operations Management (4th
edition), Harlow: Pearson Education
Slack, N. and Lewis, M. (2002) Operations Strategy, Harlow: Pearson
Education
http://www.EasyJet.com
http://www.ferraraconsulting.com
http://www.merriam-webster.com
http://scribd.com/doc/48843212/Introduction-to-Operations-management