The Transformation Process
All operations produce products and services by changing inputs into outputs. They do this by using the ‘input-transformation-output' process. In other words, operations are processes that take in a set of input resources which are used to transform something, or are transformed themselves, into outputs of products and services.
There are two categories of inputs in any operation's processes; transformed and transforming resources.[1] Transformed resources are the resources that are treated, transformed or converted in the process.[2] The three main types of transformed resources include:[3]
- Materials: involves transforming either physically (e.g. manufacturing), by location (e.g. transportation), by ownership (e.g. retail) or by storage (e.g. warehousing).
- Information: This can be transformed by property (e.g. accountants), by possession (e.g. market research), by storage (e.g. libraries), or by location (e.g. telecommunications).
- Customers: They can be transformed either physically (e.g. hairdressers), by storage (e.g. hotels), by location (e.g.
airlines), by physiological state (e.g. hospitals), or by psychologiucal state (e.g. entertainment).
The other set of inputs to any operations process are transforming resources. These are the resources which act on or carry out the transformation process. There are two main types of transforming resources:
- Facilities - the buildings, equipment, plant and process technology of the operation.
- Staff - includes all the people involved in the operations process.
The exact nature of both facilities and staff will differ between operations. For example, most staff employed in a factory assembling air conditioners may not need a very high level of technical skills. In contrast, most staff employed by an accounting firm will require a higher level skills and qualifications. Similarly, the facilities in both types of work would differ quite significantly.
Although products and services are different, sometimes it can be hard to differentiate between the two. Therefore as a general guideline, products are usually tangible while services are intangible.[4] That is, you can physically touch a product, such as a computer, but you cannot touch a consultancy advice. Also,
services usually have a shorter stored life while products can usually be stored for a period of time.
http://toolkit.smallbiz.nsw.gov.au/part/13/63/262#_ftn1