Understanding Services and Goods Production

Study Notes

Operations Management Introduction

Operations is the management of the inner workings of a business to ensure smooth operation.
It is responsible for producing goods and/or providing services in every type of business organization.

Operations in Business

Operations take place in every business organization, including restaurants, retail stores, supermarkets, factories, hospitals, and colleges.
Operations function can be seen everywhere, from reading a book to receiving medical treatment.

Three Basic Functional Areas of a Business

Operations: responsible for producing goods and/or providing services.
Finance: securing financial resources.
Marketing: selling and promoting.

Operations Management Responsibilities

Managing systems or processes that create goods and/or provide services.
Involves decisions related to product and service design, capacity planning, process selection, and more.

Importance of Operations Management

Essential for all businesses to function.
Affects cost, revenue, innovation, and future expansion plans.
Operations management can make or break a business.

Production of Goods and Service Operations

Production of goods results in tangible output (e.g., automobiles, eyeglasses).
Service operations produce intangible products (e.g., ideas, assistance, information).

Comparing Goods and Service Operations

Degree of customer contact: services often involve high customer contact.
Labor content of jobs: services often have a higher degree of labor content.
Uniformity of inputs: service operations often have high variability of inputs.

Similarities of Goods and Service Operations

Forecasting and capacity planning to match supply and demand.
Process management and controlling costs and productivity.
Managing variations, supply chain, location planning, inventory management, quality control, and scheduling.

Importance of Learning Operations Management

Essential skills for any career, regardless of field or industry.
Applies to every aspect of business, including sales, finance, and marketing.
Helps understand global dependencies, company successes and failures, and the importance of teamwork.

Description

Learn about the differences between production of goods and services, focusing on how services are performed and the intangible nature of service products. Explore examples of services like a physician’s examination, TV repair, lawn care, and film projection at a theater.