Unit 25: Principles of Operations Management
Unit code H/508/0539
Unit level 5
Credit value 30
Introduction
The aim of this
unit is to introduce students to the role of the operations in an organisation
and how it contributes to sustained competitive advantage. Students will
understand the purpose and importance of operations and resource planning on an
organisation’s efficiency and effectiveness and its impact on organisational
strategy.
By the end of
this unit students will be able to analyse and evaluate an operations
environment and implement a strategic plan that allocates resources in terms of
materials, labour and equipment.
Learning
Outcomes
By the end of
this unit a student will be able to:
- Demonstrate
understanding of the impact of the business environment on operations.
- Demonstrate
understanding of the purpose of operations in support of organisational
strategy.
- Determine the
appropriate allocation of resources for operations management.
- Conduct a
strategic risk analysis (SRA) on the operations functions of an organisation.
Essential Content
LO1 Demonstrate
understanding of the impact of the business environment on operations
Introduction to
operations management:
- What is
operations management?
- What are the
benefits of operations management?
- The role and
activities of operations management (strategic, tactical and operational).
The business
environment:
- External
influences on contemporary operations management.
- Using PESTLE to
analyse the external environment, how do broader factors such as culture,
ethics and global relations impact on the business environment?
- How does
corporate social responsibility influence operations management and how can an
operations manager respond?
- Using SWOT to
analyse the internal environment, consider the operational constraints placed
on a business by strategy, budgets for physical resourcing, financial position
and availability of human resources.
The impact of
technology:
- The impact of
new technologies on operational management systems and processes, the benefits
of technology for improving efficiency, management flows and sustainability.
- The application
of digital technology to the design, manufacturing, and distribution systems to
produce products and services worldwide.
- Consideration
of software systems: Enterprise Resource Planning systems (ERP), Supply Chain
Management (SCM), New-Product Development (NPD) and Customer Relationship
Management (CRM).
Impact on
operations of environmental factors:
- How are
internal and external environmental factors related?
- How do these
impact on operations depending on the context or situation?
Value creation:
- What does this
mean to different organisations in the public, private and not-for- profit
sectors?
- How do
operations give added value considering the differences between services and
goods?
LO2 Demonstrate
understanding of the purpose of operations in support of organisational
strategy
Operations as a
function:
- The key
functions of operations and how these relate to other functions in a business.
- Operations as a
transformation process, operations performance and the context of operations
strategy.
Transformation
process:
- The
transformation model: input transformation, output process.
Operations
performance:
- Why is
operational performance important?
- Considering
different performance variables, including quality, speed, dependability, cost
and flexibility.
- Developing
performance measures and benchmarking.
Strategy:
- The difference
types of planning (operational, tactical and strategic) and how the operations
function supports these.
- The process of
operational strategy.
- The ‘top down’
and ‘bottom up’ perspectives and approaches.
Control systems:
- The nature of
planning and control. What are control systems?
- How do they
link to the operations function?
- Managing key
operational variables: defining capacity and capability, reconciling demand and
capacity, service quality.
- Different types
of control systems to include capacity planning and control, inventory planning
and control and supply chain planning and control.
Supply chain:
- How does the
operations function interact with the supply chain? How do the supply chain and
operations impact on each other? Types of relationships in the supply chain.
Quality
systems:
- What is quality
and why is it important?
- Selecting the
most appropriate system such as TQM, Six Sigma or Lean.
Value chain:
- Why should
value be added at each stage of the operations function?
- How operations
enable businesses to effectively compete and deliver goods and services
- Understanding
and applying a value chain analysis.
LO3 Determine
the appropriate allocation of resources for operations management
Resource
management strategies:
- Ensuring
resources are in the right place, at the right time and in the right quantity.
- Using different
approaches such as the resource based view and resource planning and
allocation.
Supplier
management:
- Selecting the
most appropriate supplier to meet operational goals. Considering make or buy
decisions.
- Reducing costs
through the use of techniques such as Just in Time (JIT).
McKinsey’s 7S
model:
- A holistic approach
to effective co-ordination of activities to support operations. Applying the
model in context.
- Cost-benefit
analysis:
- As a concept
and using the technique in practice.
VRIO framework:
- Capturing the
value of an organisation.
- Using the
framework to develop a competitive advantage.
LO4 Conduct a
strategic risk analysis (SRA) on the operations functions of an organisation
Risk analysis
and management:
- Conducting a
risk analysis at the operational, tactical and strategic level. Using risk
management standards and benchmarks.
Managing
uncertainties and potential threats:
- Extending the
use of PEST and SWOT to develop contingency plans and strategies to mitigate
negative consequences.
- Using risk
identification and mapping to support risk assessment and the prioritisation of
responses.
Stakeholder
analysis and expectations:
- The
relationship between stakeholders and risk, particularly investors, suppliers
and customers.
Learning
Outcomes and Assessment Criteria
|
Pass
|
Merit
|
Distinction
|
|
LO1 Demonstrate understanding of the impact of the
business environment on operations
|
|
|
P1 Explain
how external and internal factors of the business environment impact upon
operations.
P2 Consider
how operations are influenced by corporate responsibility and how operations
managers respond.
|
M1 Produce a
critical analysis of external and internal factors that affect the
performance of an organisation.
|
LO1 and LO2
D1 Critically evaluate the application of
appropriate operations management tools to inform justified recommendations
in response to organisational environmental analysis.
|
|
P3 Conduct a
valid external and internal environmental analysis of the business
environment for an organisation.
|
|
|
|
LO2 Demonstrate understanding of the purpose of
operations in support of organisational strategy.
|
|
|
P4 Explain
how operation functions support organisational strategy and decision-making.
P5 Explain
different types of control and planning methods in application to different
organisational examples.
|
M2 Critically
evaluate the efficiency of different operations management methods used to
support organisational strategy.
|
|
|
P6 Evaluate
quality systems and how operations management can add value throughout the
supply chain.
|
|
|
|
Pass
|
Merit
|
Distinction
|
|
LO3 Determine the appropriate allocation of
resources for operations management.
|
D2 Examine the advantages and disadvantages of
different resource management strategies in terms of improving work flow and
outputs.
|
|
P7 Prepare a
resource allocation plan to meet specific operational requirements for an organisation.
|
M3 Assess and
apply the most appropriate strategies in support of the resource allocation
plan.
|
|
LO4 Conduct a strategic risk analysis (SRA) on the
operations functions of an organisation.
|
D3 Provide valid justifications for recommended
strategies at an operational, tactical and strategic level.
|
|
P8 Devise and
carry out an SRA of an organisation using risk identification and mapping.
|
M4 Develop
contingency plans and strategies to minimise the risks highlighted in the
SRA.
|
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