operation

(noun)

The method or practice by which actions are done.

Related Terms

Examples of operation in the following topics:

  • Introduction

    • understand three of the most important operations management practices: Total Quality Management, Supply Chain Management, and Just-in-Time/Lean Operations

  • What is operations management?

    • The goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs.
    • For example, if an organization makes furniture, some of the operations management decisions involve the purchasing of wood and fabric, the hiring and training of workers, the location and layout of the furniture factory, and the purchase of cutting tools and other fabrication equipment.
    • If the organization makes good operations decisions, it will be able to produce affordable, functional, and attractive furniture that customers will purchase at a price that will earn profits for the company.
    • If the restaurant owners make good operations decisions, they will be able to meet their customers' needs for delicious and affordable food that is served in a pleasing atmosphere.

  • Reducing the costs of operating electric motors

    • In many cases running two smaller energy-efficient motors can actually cost less than operating one over-sized motor.

  • Operations Management

    • In the area of equipment decisions, JetBlue operates only one type of aircraft, the Airbus 320, which has high passenger carrying capacity (to maximize revenue), provides good fuel economy and requires only two pilots (versus three) to operate.
    • For example, if an organization makes furniture, some of the operations management decisions involve the following:
    • The operations strategy should support the overall organization strategy.
    • Many companies prepare a 5-year pro-forma to assist in their operation planning.
    • Strategic and tactical operations decisions determine how well the organization can accomplish its goals.

  • Service Operations

    • Services operations often encounter different opportunities and challenges than tangible goods, and thus require unique operational considerations.
    • Service operations are simply the application of operations management to an intangible good (i.e. a service).
    • To understand how service operations function, let's first take a look at what is considered a service.
    • This definition offers a great deal of insight when applied to the concept of operational management.
    • Managing operations is just as critical on the service side as it is on the product side.

  • Controlling Activities

    • Controlling is a core managerial function defined by observing and optimizing operational processes.
    • Organizations are made up of operational systems, each of which can be iterated upon and optimized for improved performance.
    • The above example relates primarily to an operational process.
    • Optimizing operational processes is often done at the mid-managerial level.
    • Enabling Iteration - Once the operations are in place, the organization will begin pursuing the noted objectives.

  • One of three strategic functions

    • The operations strategy should support the overall organization strategy.
    • JetBlue's operations strategy is driven by its organization strategy.
    • In the area of equipment decisions, JetBlue operates only one type of aircraft, the Airbus 330.
    • The Airbus 330 has high passenger carrying capacity (to maximize revenue), provides good fuel economy and requires only two pilots (versus three) to operate.
    • In addition to an operations strategy, JetBlue also has financial and marketing strategies that support its organization strategy.

  • Information and Risk Trade-Off

    • IT risk relates to the business risk associated with the use, ownership, operation, involvement, and adoption of IT within an enterprise.
    • Information technology (IT) risk involves the business risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an enterprise.
    • IT encompasses not only the negative impact on operations and service delivery, but also the benefit and/or value enabling risk associated with missed opportunities to use technology to enable or enhance the business (including improper management of IT projects).
    • Risks such as these affect sales, which in turn affect the amount of operating leverage a company should utilize.

  • Designing the Operation

    • Designing effective operations is critical, and can have both short-term and long-term impacts on an organization's longevity.
    • If the organization has made mostly good operational decisions in designing and executing its transformation system to meet the needs of customers, its prospects for long-term survival are greatly enhanced.
    • As mentioned, operations decisions have both long-term and short-term impacts on the organization's ability to produce goods and services, and can provide added value to customers and employees.
    • Most often when a company sets operational goals and objectives, they are considered relatively short term.
    • Explain the importance of operations management on the success of a business

  • Open Market Operations

    • Open market operations (OMO) refer to a central bank's selling or buying of government bonds on the open market.
    • An open market operation (also known as OMO) is an activity by a central bank (in the U.S. it is the Fed) to buy or sell government bonds on the open market.
    • In theory, the Federal Reserve could conduct open market operations by purchasing or selling any type of asset.
    • In practice, however, most assets cannot be traded readily enough to accommodate open market operations.
    • Define the role and function of an open market operation (OMO)