Definition of operations management

This is the management of processes that create value for a company and its customers.  These processes transform inputs - such as materials, energy, services and people - into goods and services (outputs).

Companies create value in different ways, whether it be manufacturing an aircraft or producing a television show.  Effective management of operations can represent a source of competitive advantage.

Example

Airlines have specific processes for dealing with customers effectively during the check-in process.  EasyJet Airlines have different customer service and gate operations compared to other competitors.  All its processes combine together to make EasyJet one of the most efficient and profitable companies in its industry.

For example, as EasyJet Airlines do not assign seats at check-in, this encourages customers to get to the gate quickly and wait to board the airplane.  Once on board, customers quickly stow their luggage and find a seat to sit down.

While some might think that assigning seats in advance is more efficient, however, the opposite is true.  A customer who has an assigned seat can take their time milling around, while EasyJet customers have to compete quickly with each other when it comes to choosing their desired seats. This process allows the airline to have very quick turnaround times, and thus utilise their most expensive assets (their airplanes) more than their competitors to be more profitable. [1]