Operations Management Overview

Study Notes

Operations Management is the management of systems or processes that create goods and/or provide services.
Operations Management can also be defined as the way in which an organization produces goods or provides services.
Operations Management refers to the systematic planning, design, direction, and control of activities that convert specific inputs into goods and services for internal and external customers.
Operations Management is the term used for the activities, decisions, and responsibilities of operations managers.

The operations function consists of all activities directly related to producing goods or providing services.

Operations managers are the staff of the organization who are responsible for managing the resources that comprise the operations function.

Physical: Manufacturing, for example, creating a car.
Locational: Transportation, for example, moving goods from one location to another.
Exchange: Retailing, for example, selling goods to customers.
Storage: Warehousing, for example, storing goods in a warehouse.
Physiological: Healthcare, for example, providing medical treatment to patients.
Informational: Telecommunications, for example, transmitting information via telephone, internet, or other means.

Goods: Physical products, for example, a car, a watch, or canned vegetables.
Services: Intangible products, for example, healthcare, transportation, or education.

Tangibility: Goods are tangible, services are intangible.
Storability: Goods can be stored, services cannot.
Transportability: Goods can be transported, services cannot.
Customer Contact: Goods have less direct customer contact than services.
Quality: Goods quality can be measured more easily than service quality.
Simultaneity: Goods are produced before they are consumed, services are produced and consumed simultaneously.

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