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 by which the change is implemented.
* Outputs
The outputs of the operation process are usually goods or services, or a mixture of them. It is the result achieved in the process of trying to satisfy customer needs.
The input-transformation-output model can be combined with the sequence of its activities, to create a general model of operations management. The direct activities can be divided in various classes including the design and management of operations process, planning, control, performance improvement and operations strategy.
In addition to being responsible for managing all the activities that are part of the production of goods and services, the operations manager must also interact with the functional managers in other areas of the organization whose roles have an impact on operations including areas as finance and accounting, marketing, engineering, human resources.
It is telling that the standing orders of "The Herald of Free Enterprise" contained the following instructions: "Heads of Department are to report to the Master immediately they are aware of any deficiency which is likely to cause their departments to be unready for sea in any respect at the due sailing time. In the absence of any such report the Master will assume, at the due sailing time, that the vessel is ready for sea in all respects".