Welcome to Semester

BMNG 5122
 I will post the lecture slides after lectures have
occurred

 You may have an ICE task to do thereafter

Ice 1 Chapter 1 (short questions 30 VC Learn

marks)

Ice 2 Case Study (Human Resources) To be presented in class

Ice 3 Marketing (15 MCQ’s) VC Learn

Ice 4 Past Paper review In class (compulsory

attendance)
Ice 5 Calculations + questions (25 VC Learn
Marks)
ICE Tasks
 There will be a minimum of six ICE
tasks for each module

 You are required to complete at least 4 of the 6 ICE

tasks
Assessments
 All formative Assessments will be on a Program
Assessment Schedule (PAS)

WhatsApp groups
 Should you wish to form a WhatsApp group, please
do so.
Erasmus et al (2019)
 Should anything not
be resolved on the group, the
group administrator may contact me
BMNG 5122 – What is Please
check your
required? module
outline for
further
details
The Journey

We
are
here

Ch 12 Ch 15
Ch 11 Ch 13 Ch14
Human Purchasin
Operatio Marketin Financia g&
Resourc
ns g l
e Supply
Mngmnt Mngmnt Mngmnt
Mngmnt Mngmnt

Ch 16
Strategic
Mngmnt
The purpose of BMNG5112

 To provide students with foundational

knowledge of the main functional
areas of a business.

 And

how they should be managed

6
Chapter 11
Operations Management
 Learning outcomes
 Explain the importance of operations management for a business;
 Define what operations management encompasses
 Describe the components of an operations management model;
 Discuss the six general operations management performance
objectives;
 Explain how the system of classifying process types according to
manufacturing and services may assist operations managers;
 Discuss operations design and how it needs to be managed;
 Discuss operations planning and control, and how these need to be
managed to ensure efficient manufacturing of products and
services;
 Discuss the management of operations improvement to provide
more effective and efficient manufacturing of products and
service delivery to achieve a competitive advantage
 The purpose/ importance of
operations management
 It can reduce costs if producing products or offering
services;
less waste, reworking, scrap, spillage

  It can increase revenue of the business;

offering a superior product / service –
value for money
 The purpose of operations
management
 It can reduce the amount of
investment needed to
manufacture the required type
and quantity of products and
services;
increasing effective capacity
by better use of facilities
U s e ex i s t i n g
i n f r a s t r u c t u re b e t t e r
re d u c e s c a p i t a l
re q u i re d
  It can provide the impetus for new innovation.
new ideas up to international standards

Enables new innovation:

Use existing base of operational skills and knowledge
to develop new products and services.
Erasmus, B.J., Strydom, J.W. and Rudansky-kloppers, S. 2016. Introduction to business management. 10th ed. Cape town: Oxford University Press.
Hype. The Definition of Innovation. 2018. [Online]. Available at: https://blog.hypeinnovation.com/the-definition-of-innovation [Accessed 6 July 2018]. 11
 Improves
productivity:
Ratio of output to input

If you can increase this ratio then

you are improving productivity

How? More error-free outputs with

less wastage of inputs or putting
manufacturing staff to better use.

It can improve productivity

Erasmus, B.J., Strydom, J.W. and Rudansky-kloppers, S. 2016. Introduction to business management. 10th ed. Cape town: Oxford University Press.
Productivity/Claims. 2018. [Online]. Available at: https://boockreport.com/productivityclaims/ [Accessed 8 July 2018]. 12
Video

 NAVY SHIP
 https://
www.youtube.com/
watch?
v=ywZevdHW5bQ
 The importance of operations
management
The reasons that operations management is considered important are
the following:

 It can help a business to satisfy the needs of

customers/ clients more effectively than your competitors do

What do customers want?

• High quality products
• Excellent service
• Low costs
• Good value for money
 The importance of operations
management

The reasons that operations management is considered important are

the following:

 It can be decisive for the general reputation of

the business. (Du Toit et al, 2010)
 Defining terms used in
operations management

Operations management – the management

of the transformation process…..

Operations function

Operations managers

Operations management
 Defining terms used in
operations management
The Operations function:
The function is primarily the utilisation of resources

Operation Managers:
Personnel directly responsible for managing the operation

Operations Management:
Operations managers functions, Decisions and responsibilities
Case Study
operations
management

 Let’s read the case

study from page 313
to 315

 Let’s discuss: Why

did they succeed?
Operations-management
Strategies & Performance
Objectives
The operations-management functions should

 develop strategies and objectives

 to ensure that all the needs of customers/ clients are met
 and that the business organisation will retain and even expand
its competitive position and customer/ client base.
 Strategies and performance
objectives
The needs of clients can be categorised in the following elements:
Higher quality;
Lower costs;
Shorter lead time / quicker manufacturing / servicing;
Greater flexibility/ adaptability;
Lower variability/Higher reliability (regarding
specifications);
Higher level of service

Du Toit et al, 2010, p.316.).

 The Transformation model

• Operations function is primarily concerned with the

application of resources by means of a
transformation process to provide outputs

• Model could apply to both manufacturers and

service providers
 The Transformation model

• Model comprises three main components:

• Inputs
• Transformation process itself
• Outputs
 A basic
transformation
model

Diagram 1.3: A basic transformation model

(Source: Adapted from: Du Toit et al, 2010, p.316)
 Operations This diagram 11.1
management model provides an
overview of the
whole operations
management
function.

Resources:
 Material
 Let’s think of apple juice
 Customers/clients
as the final product…..
 Information

Aids: Operations management Each area that

 Human resources activities:
 Equipment and  Operations design we are going to
facilities
 Operations planning and study is
 Technology control illustrated in this
 Operations improvement
VCLearn guide
diagram.
Erasmus, B.J., Strydom, J.W. and Rudansky-kloppers, S. 2016. Introduction to
24
business management. 10th ed. Cape town: Oxford University Press.
Discussion

 Inputs, Processes and Outputs

 For

 Airline
 Department store
 Frozen food Manufacturer
Slack, N., Chambers, S. and Johnston, R. 2010. Operations Management. 6th
ed. Harlow: Pearson Education Limited 27
The Transformation model
P316
“The transformation process converts

inputs into outputs.”

(Du Toit et al, 2010, p.255).

Inputs are divided into resources that will be transformed,

(material, customers/ clients and information) and the resources
required to make the transformation possible (human resources,
equipment and facilities, and technology).

The type of input (resources) that is processed determines the

nature of the transformation process.
The Transformation model

The transformation process for material is usually geared

towards changing the physical appearance or
characteristics while the primary input is being processed
when information is changed (add, amend or deleted) .
 Summation - Inputs

• Resources to be transformed include:

• Material
• Customers
• Information

• Resources required to make transformation possible:

• Human resources
• Equipment and facilities
• Technology

• Three main types of resource inputs are addressed:

• Transformation of materials
• Transformation of information
• Transformation of customers/clients
INPUTS
 Material – can be processed or not - car manufacturer uses processed
glass, metal etc. a mine does not *gold ore)

 Customers - the client is being processed – dentist / stadium

 Information – primary transformed - Newspaper

 Human resources – for transformation human input always necessary

whether physically involved or managerial

 Equipment & facilities – factories use machinery , hospitals wards etc.

 Technology – used to enable the transformation more efficiently

Transformation

Transformation of clients/ customers may occur in a variety

of ways:

Changing physical appearance or characteristics,

Changing physiological or emotional condition,
Changing their location or
Merely “storing” those

(Du Toit et al 2010, p.321).

 Outputs

• Ultimate goal of transformation process is to convert

or process inputs into outputs

• Characteristics of products manufactured and

services provided differ

• Important to note the difference because they have

specific implications for the management of the
various operations processes
 Outputs

(P 321) Outputs on the other hand, are the products and/ or

services that a business organisation renders to its clients/
customers.

Products and services are different from each other and are usually
measured against the following characteristics:

Perishability – unused products can usually be stored for

future use, while unused capacity or service cannot be stored
for future use. If service are not used when it has been intended
for use, it is lost.
Outputs

Tangibility – products can be touched or viewed and are thus

tangible, while services cannot be touched or viewed and are
thus intangible.

Variability (or heterogeneity) – products can be mass

produced and little to no variance exists between different
times of production. Services depend on people and their
differences, which imply a high level of variety. This could be
minimised by means of training.
Outputs

Inseparability of production and consumption –

products can be manufactured before use while the provision/
production and consumption of services are usually
simultaneous.

Ownership – ownership of products are transferred during the

sales process but service cannot be separated from the
service provider.
Outputs

Quality measurement – the measurement of adherence to

quality standards for products are possible and easy while the
measurement of adherence to quality standards set for
services are difficult.

Response time – the response time for products are long as

the time between production and manufacturing may be long
while the response time for services are short due to the fact
that manufacturing and consumption are simultaneous.
 OUTPUTS P321

 These are products or services

 The table P 322 are extreme positions – in practice

though businesses often involved in both the
manufacture of
products and service provision

Erasmust, Strydom, Rudansky - Kloppers, (2019)

 Activity
An academic institution such as
The Independent Institute of
Education’s main function is the
delivery of academic material and
content to students:
 Identify at least three INPUTS for
the IIE.
 Identify at least three OUTPUTS
for the IIE.
 Name at least three
transformation processes for the
IIE
 Would the inputs and outputs for
the IIE be different from those of
a retailer such as Checkers.
Why / Why not?
VCLearn guide 3
9
Close out

 Today’s lecture
• Intro to operations management
• The transformation model

 You MUST read Chapter 11 up to the end of your text

and summarise it

 Next lecture
 Operations management continued