Operations: Strategy, Processes and Quality
What you must understand
Operations is the engine room of the business: it transforms inputs (materials, labour, information) into outputs (goods and services) through processes that add value. Learn the transformation process model (inputs → transformation → outputs) and be able to apply it to a specific business, not just define it.
Know the difference between goods and services characteristics (tangibility, perishability, customisation, customer contact) and how these shape operations decisions. Understand operations strategies: performance objectives (quality, speed, dependability, flexibility, customisation, cost); new product/service design; supply chain management including logistics, e-commerce and global sourcing; outsourcing (and its advantages and risks); technology such as CAD/CAM and robotics; inventory management (LIFO, FIFO, JIT); and quality management (control, assurance, improvement).
Traps in questions
- Confusing quality control (inspection at the end) with quality assurance (process design to prevent defects) and quality improvement (continuous, e.g. TQM).
- Treating JIT as simply "low stock" - it is a pull system dependent on reliable suppliers.
- Describing a strategy without linking it to performance objectives or cost, quality, speed outcomes.
- Ignoring influences (globalisation, technology, legal regulation, environmental sustainability, corporate social responsibility) when asked how operations are affected.
Worked example
A question asks how a manufacturer could improve dependability. A weak answer says "use JIT". A strong answer: "Implement supply chain management by developing reliable supplier contracts and buffer stock at critical points; this reduces stockouts, so delivery promises are met and dependability improves - but it raises holding costs, a trade-off with the cost objective."
Rule of thumb: name the strategy, explain the mechanism, then state the effect on a performance objective and one trade-off.