Operation Management Fundamentals

Study Notes

Operation Management

Encompasses activities that create value by transforming inputs into outputs.
Applicable across various productive enterprises, including offices, hospitals, and factories.
Efficiency in producing goods/services relies on effective OM techniques.

Production

Involves creation of Goods (tangible products) and Services (intangible products).
Production activities for goods are evident, while those for services may not be visible to customers.
Often referred to in organizations as operations management.

Organizing to Produce Goods and Services

Three essential functions for creating goods/services:
- Marketing: Generates demand and takes orders.
- Production/Operations: Creates the products.
- Finance/Accounting: Monitors organizational performance and manages funds.

The Supply Chain

A global network supplying firms with goods/services, relying on various suppliers.
Value is created through collaboration between marketing, operations, and finance.
Efficient collaboration within the supply chain leads to customer satisfaction and competitive advantage.

Importance of Studying OM

Understanding how organizations achieve productivity.
Learning production processes of goods and services.
Gaining insights into the role of operation managers.
Recognizing OM as a significant cost factor within organizations.

Functions of Operations Managers

Core management functions include:
- Planning
- Organizing
- Staffing
- Leading
- Controlling
Focuses on strategic design elements in OM, including quality management and supply chain management.

Total Quality Management (TQM)

Customer-oriented philosophy emphasizing quality to achieve customer satisfaction.
Involves all organizational members in continuous improvement efforts.
Concerns product quality, process control, and quality assurance/enhancement.

Quality Definition

Described as "Fitness for use," encompassing the attributes that influence a product's ability to meet specified needs.
Governed by standards such as ISO 9000, established by the International Organization for Standardization.

Chain Reaction in Quality Improvement

Enhancing quality leads to increased productivity by reducing defects and non-value-adding activities.

Dimensions of Quality

Product Quality Attributes: Functionality refers to the presence of certain attributes that fulfill specified functions.

Description

This quiz covers the essential concepts of operation management, focusing on how value is created by transforming inputs into outputs. It highlights the key functions in organizing production, including marketing, production, and finance. Additionally, it discusses the significance of the supply chain in enhancing efficiency.