Operations Management Overview

Operations Management

• Operations management is the part of a business organization responsible for transforming resources into goods and services.
• Operations management involves managing the systems and processes that create products or services, ensuring efficiency and effectiveness.
• Operations and supply chains are responsible for meeting supply.
• Sales and marketing are responsible for creating and identifying demand.

Effectiveness and Efficiency

• Efficiency (means) is focused on resource usage and low waste.
• Effectiveness (ends) is dedicated to goal attainment and high attainment.
• Management strives for low resource waste (high efficiency) and high goal attainment (high effectiveness).

Goods or Services

• Goods are physical items, including raw materials, parts, assemblies, and final products (e.g., automobile, computer, oven, shampoo).
• Services are activities that combine time, location, form, or psychological value (e.g., air travel, education, haircut, legal counsel).

Supply Chain

• A supply chain is a sequence of activities and organizations involved in producing and delivering a good or service (supplier's supplier, direct suppliers, producer, distributor, final customers).

The Transformation Process

• The transformation process takes inputs (land, labor, capital, information) and turns them into outputs (goods and services).
• Measurement and feedback play a crucial role, used in control, to ensure the process is aligned with established standards.
• Feedback is taken at different stages in the transformation process.
• Control involves comparing feedback to standards to determine if corrective actions are needed.

Basic Business Organization Functions

• Finance: budgeting, analyzing investment proposals, provision of funds.
• Operations: providing services offered by the organization, producing goods, core business activities.
• Marketing: assessing consumer wants and needs, selling and promoting organizational products/services.

Process Management

• Processes are one or more actions that transform inputs into outputs.
• Upper management processes govern the entire organization.
• Operational processes are the core processes comprising the value system.
• Supporting processes support the core processes.

Supply and Demand

• Supply is the total amount of goods or services available for consumption.
• Demand is the consumer desire for goods or services.
• Supply and demand are essential to understanding purchasing behavior and how businesses operate.

Process Variation

• There are different types of variations including:
• Variations of goods or services offered
• Structural variations in demand (e.g., capacity planning)
• Random variations (e.g., natural variation)
• Assignable variations (e.g., identifiable sources)

Operation Management Scope

• Includes activities such as:
• Deciding facility location
• Forecasting
• Capacity planning
• Motivating employees
• Assuring quality
• Managing inventories
• Scheduling
• Facilities and layout

Role of Operation Manager

• Operation functions encompass activities directly related to producing goods or services.
• System design involves strategic decisions, whereas system operations focus on the tactical operational levels.

OM Decision Making

• Key questions in OM decision-making include:
• What?
• When?
• Where?
• How?
• Who?

This quiz explores the fundamentals of operations management, including the transformation of resources into goods and services. It covers key concepts like efficiency, effectiveness, and the distinction between goods and services. Test your understanding of how operations and supply chains work to meet demand and ensure resource optimization.