Operations & Logistics Management Lesson 3: The transformation process and operations strategy

THE TRANSFORMATION PROCESS Task of producing something, a product or service – the process of taking something (input), change or transform it into a form (output) that your clients want. The transformation process is made up of three core areas, namely: 1.input, 2.the process, and 3.the output.

THE TRANSFORMATION PROCESS

Transformed Resources: mixture of materials, customers and information that are processed in such as manner to form a specific product or service. Value added: the changing of the various parts into something new. i.e. the value of the original inputs has been changed.

THE TRANSFORMATION PROCESS The Transforming Resources: all resources used during the production process to change the input (transformed resources) into a product or service. The production process or operations: - Is not one/single process - multitude of smaller and bigger process and tasks focused on the common goal of creating a product or service. Operations Management: is about managing this process. *Question: Differentiate between transformed resources and transforming resources.

THE TRANSFORMATION PROCESS INPUT MDP-OLM Participant, Course Guide Transformation process: value is added. * Lectures * Discussions * Assignments * Test/ Exams OUTPUT * An increase in knowledge * A certificate in Operations Management

THE TRANSFORMATION PROCESS The Transformed Resource MDP-OLM Participant The Transforming Resources The Lecturer/ Facilitator The Whiteboard/ Computers Textbooks and notes

DISCUSSION QUESTIONS: 1.What is the difference between a transformed resource and a transforming resource? 2.Can a customer be a transformed resource as well? Motivate / Explain why? 3.What are the similarities between all operations?

OPERATIONS STRATEGY Operations are managed and operated through the guidelines of three key strategies, namely the corporate, business and functional strategy. Each of these strategies provide a specific framework that enables the organisation to operate in the short-, medium- and long-term

OPERATIONS STRATEGY IMPORTANT It is sometimes difficult to match the theoretical strategy and the actual activities with one another. When assessing an operational problem, do not jump in with a ‘strategic’ solution. The start of dealing with any operational issue is containment, then assessment, fixing the basics and only then turning to strategy to assess its impact on the operations and vice versa.

Operations strategy Corporate level Strategy What business should we be in? Economic Environment Social environment Political environment Company values and ethics Business level Strategy What is our mission? Customer/ Market dynamics Competitor activities Financial Constraints Functional /Operations level Strategy How should we manage the function’s resources? Skills & expertise Current technology Recent performance Constraints

DISCUSSION QUESTION What is the difference between the corporate strategy and the functional strategy?