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Understanding operations management

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Operations management is one of the central functions of all organisations. This free course, Understanding operations management, will provide you with a basic framework for understanding this function, whether producing goods or services or in the private, public or voluntary sectors. In addition, this OpenLearn course discusses the role of operations managers and the importance of focusing on suppliers and customers.

After studying this course, you should be able to:

  • define ‘operations’ and ‘operations management’
  • identify the roles and responsibilities of operations managers in different organisational contexts
  • apply the ‘transformation model’ to identify the inputs, transformation processes and outputs of an organisation
  • identify operational and administrative processes
  • describe the boundaries of an operations system, and recognise its interfaces with other functional areas within the organisation and with its external environment.

By: The Open University

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3.4 Transformation processes

A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients. Where the inputs are raw materials, it is relatively easy to identify the transformation involved, as when milk is transformed into cheese and butter. Where the inputs are information or people, the nature of the transformation may be less obvious. For example, a hospital transforms ill patients (the input) into healthy patients (the output).

Transformation processes include:

  • changes in the physical characteristics of materials or customers

  • changes in the location of materials, information or customers

  • changes in the ownership of materials or information

  • storage or accommodation of materials, information or customers

  • changes in the purpose or form of information

  • changes in the physiological or psychological state of customers.

Often all three types of input – materials, information and customers – are transformed by the same organisation. For example, withdrawing money from a bank account involves information about the customer's account, materials such as cheques and currency, and the customer. Treating a patient in hospital involves not only the ‘customer's’ state of health, but also any materials used in treatment and information about the patient.

One useful way of categorising different types of transformation is into:

  • manufacture – the physical creation of products (for example cars)

  • transport – the movement of materials or customers (for example a taxi service)

  • supply – change in ownership of goods (for example in retailing)

  • service – the treatment of customers or the storage of materials (for example hospital wards, warehouses).

Several different transformations are usually required to produce a good or service. The overall transformation can be described as the macro operation, and the more detailed transformations within this macro operation as micro operations. For example, the macro operation in a brewery is making beer (Figure 2). The micro operations include:

  • milling the malted barley into grist

  • mixing the grist with hot water to form wort

  • cooling the wort and transferring it to the fermentation vessel

  • adding yeast to the wort and fermenting the liquid into beer

  • filtering the beer to remove the spent yeast

  • decanting the beer into casks or bottles.

Figure 2
Figure 2 Macro and micro operations

Activity 5

Identify the principal resources (inputs), the type of transformation process and the principal outputs (goods or services) in each of the following operations.

Inputs Type of transformation Outputs
Refining steel
Assembling cars
Delivering cars to dealers
Repairing cars
Designing cars


You may have identified various inputs such as materials, energy, machines, equipment, buildings and people. For example, the inputs used by a car assembly plant include components, equipment, buildings, labour and energy. You may also have included less tangible inputs to the transformation process, such as information and skills.

You might have noticed that, midway down the list, the activities changed from primarily the production of goods to the provision of services. In the case of car designing, the principal inputs are ideas and the outputs are materials used to communicate the finished idea, such as blueprints or computer models.

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