by Sanda Berar

Created on: November 07, 2009   Last Updated: November 08, 2009

On 6th March 1987 the ro-ro ferry "The Herald of Free Enterprise" capsized and sank just outside the entrance to the harbour in Belgium. (http://en.wikipedia.org/wiki/MS_Herald_of_Free_Enter prise)

It is a classical example of the potential impact of failures in operations management.

Of course, most operation managers are not faced with so severe consequences of life or death, but operations management is at the core of every organization, assisting in delivering the goods and services that meet the needs and desires of their customers, patients, students, clients and consumers of their outputs.

Operations management is required in organizations ranging in size from a sole trader to multi-national organizations with business units spread across the globe. Every organisation has an operations function, whether or not it is called "operations".

The term operations embraces all the activities required to create and deliver an organization's goods or services to its customers. It is about producing the right amount of goods or service, at the right time, of the right quality and the right cost to meet customer requirements.

The most useful method of modeling the operations system is by defining three major components: input, transformation processes and outputs. Operations management involves the control of the processes that transform inputs (resources) into outputs (finished goods or services).

*Inputs

There are several types of resources (inputs) that can be transformed by the operations process with a standard classification being: materials, information and customers.

The definition of *materials* as input, is evident in the case of manufacturing companies. But operations function is present also in services companies. For example, in case of consulting firms, software or accounting companies, the scope is mainly in the transformation of the input information. Companies like fitness clubs or hairdressers have as input resources, their customers.

*Transformation Process

A transformation process may be defined as the activity that takes an input, changes it with the intention to add value to it, and than delivers the resulted output to its customers or clients.

For getting the desired output, the quality of these inputs are to be monitored regularly, including comparisons between the real output and the desired output.

There are several ways to categorize the transformation process i.e. based on the type of changes performed on the inputs or based on the means

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