General Model of the Operations Function

This figure illustrates the basic concept of the operations function. Firstly inputs are transformed (converted) to outputs with the measurement of performance against a given quality standard. The quality standard has been predetermined by the determination of an operational strategy and suitable performance indicators (often referred to as key performance indicators or KPIs for short). The process is continuous with built-in pressure to meet performance targets and improve the design and performance or the 'system' with efficient usage of resources consumed. 

You can see that operations management is a practical subject which deals with the implementation of strategy. Operations is central to most organisations as it ultimately must produce the goods or services which justify the existence of the organisation.

All operations produce either goods or services and very often both at the same time. Transformation is a ‘catch all’ word meaning change. The following table illustrates the nature of transformations. For instance, a university ‘transforms’ students into graduates. McDonald’s changes the basic ingredients of a burger, meat, bread, onions, mayonnaise, into (some say) a delicious snack.