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Business Management - Definition - operations management

Definition - operations management

Operations Management controls the production of a good or the provision
of a service. Image.

Operations Management (OM) involves the designing, planning,
organising, leading and controlling functions involved in the production of
a good or the provision of a service. Essentially, OM concerns itself with
the processes involved in converting and transforming inputs (material
resources, human resources, capital resources, and information resources
together with entrepreneurial resources) into outputs in the form of goods
or services that add value to the organisation. Therefore, OM involves the
development and implementation of an effective operating system. The
development and implementation of this effective operating system is
applicable to each and every part of the organisation.

Such an operating system consists of three basic components:

* inputs or resources (natural or material resources, human
resources, technological resources and entrepreneurial resources) which are
purchased by the organisation

* processes which involve the conversion or transformation of these
resources into products or services (e.g. using project, batch or
continuous processes)

* output and then feedback to the organisation from its customers

Such a conversion or transforming process involves managers in making many
critical decisions. These decisions concern the initial design of the
product or service, the equipment and assets required for the production
process, the skills needed by employees during the transformation
process, employee remuneration details, the location of organisational
operations, organisational capacity, and internal facility layout. All
of these decisions must be made to support the strategic direction of the
organisation.

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