Key Elements of an Operations System

Key Elements of an Operations System

The operations system used by an organisation is the process that is required to produce their goods and/or services that are then sold to the market. It can also be called the transformation process. The Operations System of a Manufacturing Organisation is different to that of a Service Organisation.

Inputs

Inputs are resources used in the process of production. The inputs used in manufacturing differ between manufacturing organisations and service organisations.

Examples of inputs include:

  • Raw materials, which are consumed or converted by the transformation process.
  • Capital equipment such as plant, machinery and property necessary to conduct operations.
  • Labour referring to people involved in the operations function.
  • Information from a variety of sources contributes to transformational process. Organisations don’t always charge the value of this resource, because it cannot be easily quantified as a business asset.
  • Time and its efficient use is critical in the operations system. Coordinating resources within a time frame limits costs and wastage.
  • Money is the most flexible of resources as it can be easily converted to any quantity or combination of materials, capital or labour.

Transformation

Transformation is the conversion of inputs (resources) into outputs (goods or services). This stage implies physical changes and also involves the conversion of resources to services. This stage differs between manufacturing organisations and service organisations. Service organisation transforms inputs to intangible products and manufacturing organisations transforms inputs into tangible products.

Outputs

Outputs refer to the end result of an organisation’s efforts – the service or product that is delivered or provided to the consumer. The outputs must always be responsive to consumer demands as the consumers are the ones purchasing the good and/or service. The issues of quality, efficiency and flexibility must be balanced against the resources and strategic plan of the organisation.