Operations is defined as converting materials, information, and labor into goods and/or services. Operations management movements since the first industrial revolution have given us a sense of the tension between human systems – the system that supplies labor – and the operational system – the thing that uses labor to convert material and/or information into goods or services. This tension occurs where people and process combine based on a plan to produce things. How they produce – the quality of the output, the efficiency, the effectiveness – can be thought of as the performance of this combination of things.
A system is a set of components that, when combined, achieve something. For example, our heart and lungs work together to provide vital oxygen to cells in our body. Together they and other components form the cardiovascular system. We can measure the performance of a system just like we can measure the performance of an individual’s cardiovascular system.
Another way to think of operations is a system where the plan, the people, and the process combine to create an output. You can evaluate that system by evaluating its performance. Performance is at once both quantitative and qualitative. As such, performance becomes the one thing that can be measured to determine how well the system combines to create an output.0