Operations refers to all the tasks a company performs to turn raw materials into finished goods or services using its people, processes and equipment.
Operations should be designed to ensure goods or services are created:
- In the right quantity
- At the desired level of quality
- On time
- In the right place
- At a competitive price
If one of these criteria is not met, customers may be dissatisfied and the overall value of the product or service created will decline. For example, if a product is delivered late, its high quality won’t be what stands out to the customer. Rather, it will be the lateness of delivery and the customer will judge the product to have a lower value. This is why businesses try to fulfill all five criteria equally.