Operations Management Overview Quiz

Introduction to Operations Management

• Operations management is the management of processes that create goods or services.
• This includes the systematic design, direction, and control of processes that transform inputs to outputs for internal and external customers.
• Operations management is intrinsically linked with supply chains as no business organization can exist without both.
• A supply chain is a sequence of organizations involved in producing and delivering a product or service. It encompasses facilities, functions, and activities.

Learning Objectives

• Students should be able to define operations management and supply chains.
• Students should be able to identify similarities and differences between production and service operations.
• Students should be able to explain why learning about operations management is important for organizations.
• Students should be able to identify and describe the interrelation of the three major functional areas of any organization (operations, finance, and marketing).
• Students should be able to summarize the two major aspects of process management.
• Students should be able to describe the operations function and the role of an operations manager.
• Students should be able to explain the key aspects of operations management decision-making.
• Students should be able to describe the history of operations management from craft production, industrial revolution and scientific management to the human relations movement and lean manufacturing.
• Students should be able to identify current business issues affecting operations management.
• Students should be able to explain the need to manage supply chains.

Transformation Process

• Transformation processes convert inputs (land, labor, capital, information) into outputs (goods or services).
• Different processes (like storing, transporting, repairing) are used to create and manage goods or services.
• The operations function involves changing inputs to outputs.
  • Inputs: land, labor, capital, information
  • Transformation processes (Value-added): cutting, drilling, transporting, mixing, packing etc
  • Outputs: High goods percentage (houses, automobiles, clothing), High service percentage (health care, entertainment, car repair, banking, communication)
• Control processes involve measuring output quality/ quantity (Feedback) and adjusting as required.

Production of Goods Versus Providing Services

• Key differences between producing goods and providing services include tangibility, customer contact, labor content, measurement of productivity, inventory, wages, and patentability.
• Goods are tangible, have low customer contact, low labor content, measurement of productivity is easy, have a wide range of inventory, are usually patentable and have narrow wages range.
• Services are intangible, have high customer contact, have high labor content, measuring productivity is difficult , have low inventory, are not usually patentable and have a wide range of wages.

Process Management (Two Aspects)

• Managing a Process to Meet Demand: Forecasting demand, translating forecasts into capacity requirements, establishing a process capable of meeting predicted demand
• Process Variation:
  • Variety of goods/services offered
  • Structural variation (predictable trends/seasonal variations)
  • Random variation (inherent variability)
  • Assignable variation (defective inputs, wrong methods, machinery issues)

Scope of Operations Management

• Operations management is an organizational-wide process encompassing forecasting, capacity planning, facilities planning, managing inventories, scheduling, and ensuring/improving quality.
• Organizations with operations systems that are spread out over large territories will increase the importance and challenge of managing the operations.

Operations Management and Decision Making

• Key aspects of operations management include analysis of trade-offs, establishing priorities, performance metrics, degree of customization, models, and quantitative/system approaches
• Decision-making is a continuous process.

Historical Evolution of Operations Management

• Tracing trends from craft production, through industrial revolution, scientific management, human relations movement and lean manufacturing. Technological advancements drive change, as well as changes in managerial approaches.
• Modern approaches emphasize sustainability, firm, and society.

Operations Today (e -business, Lean Systems, ERP, E-commerce)

• E-business, e-commerce, lean systems, and enterprise resource planning (ERP), use of information systems, processes, tools, and technology for cost reductions and improved efficiency.

Key Issues for Today's Business Operations

• Contemporary environmental concerns, ethical conduct, supply chain management, and the need to manage supply chains are key to modern business operations.

The Need to Manage Supply Chains

• Issues impacting effective supply chain management include the need to improve business operations, the increase in outsourcing, increasing transportation costs, and the complexity of supply chains.
• Importance of managing supply chains and inventories.

Key Points

• Operations are integral to every business function.
• Effective management of processes is critical.
• Matching supply and demand is crucial.
• Process variations demand consistent management.
• Although goods and services differ, there are common principles in management.
• Environmental concerns and ethical conduct are fundamental to effective management.
• All organizations are part of a supply chain in need of management.

Group Case Study

• A case study involving a coffee shop experiencing increased demand leads to customer dissatisfaction and the need to improve their operations.
• Questions to ask the coffee shop owner to help them understand how they should improve.

Three Thoughts to Change the Mindset

• Think of yourself as the CEO of the business.
• Focus on leadership to improve results.

Test your knowledge on key concepts of operations management, including types of variation, decision-making processes, and performance metrics. This quiz covers essential topics that are vital for understanding the role of operations in business. Whether you're a student or a professional, enhance your grasp of operations management principles here.