BME reviewer.docx

**OPERATIONS MANAGEMENT** FIRST SEMESTER (2024 -- 2025) **Operations** part of a business organization that is responsible for producing goods or services Production is the creation of goods and services **Operations management** (O M) is the set of activities that creates value in the form of...

**OPERATIONS MANAGEMENT** FIRST SEMESTER (2024 -- 2025) **Operations** part of a business organization that is responsible for producing goods or services Production is the creation of goods and services **Operations management** (O M) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs **Essential Functions of OM** **Marketing** -- generates demand **Production/operations** -- creates the product **Goods** are physical items that include raw materials, parts subassemblies, and final products **Services** are activities that provide some combination of time, location, form or psychological value. **Supply Chain** - a sequence of activities and organizations involved in producing and delivering a good or service - A global network of organizations and activities that supplies a firm with goods and services - Members of the supply chain collaborate to achieve high levels of customer satisfaction, efficiency, and competitive advantage The need for Operations Management: OM is one of three major functions of any organization; - study how people organize themselves for productive enterprise - to know how goods and services are produced - to understand what operations managers do - OM is such a costly part of an organization   **OPERATIONS MANAGERS DUTIES** Basic Management Functions - Planning - Organizing - Staffing - Leading - Controlling **STRATEGIC DECISIONS** **Design of goods and services** - Defines what is required of operations - Product design determines cost, quality, sustainability and human resources **Managing quality** - Determine the customer's quality expectations - Establish policies and procedures to identify and achieve that quality **Process and capacity design** - How is a good or service produced? - Commits management to specific technology, quality, human resources, and investments **Location strategy** - Nearness to customers, suppliers, and talent - Considering costs, infrastructure, logistics, and government **Layout strategy** - Integrate capacity needs, personnel levels, technology, and inventory - Determine the efficient flow of materials, people, and information **Human resources, job design and work management** - Recruit, motivate, and retain personnel with the required talent and skills - Integral and expensive part of the total system design **Supply chain management** - Integrate supply chain into the firm's strategy - Determine what is to be purchased, from whom, and under what conditions **Inventory management** - Inventory ordering and holding decisions - Optimize considering customer satisfaction, supplier capability, and production schedules **Scheduling** - Determine and implement intermediate- and short-term schedules - Utilize personnel and facilities while meeting customer demands **Maintenance** - Consider facility capacity, production demands, and personnel - Maintain a reliable and stable process           **REASONS TO GLOBALIZE** - Improve the supply chain - Reduce costs and exchange rate risks - Improve operations - Understand markets - Improve products - Attract and retain global talent **IMPROVE SUPPLY CHAIN** Locating facilities closer to unique resources **REDUCE COST** Risks associated with currency exchange rates Reduce direct and indirect costs Trade agreements can lower tariffs - Maquiladoras - World Trade Organization (W T O) - North American Free Trade Agreement (NAFTA) and U S M C A - APEC, SEATO, MERCOSUR, CAFTA - European Union (E U) **IMPROVE OPERATIONS** Understand differences between how business is handled in other countries - Japanese -- inventory management - Germans -- robots - Scandinavians -- ergonomics International operations can improve response time and customer service **UNDERSTAND MARKETS** Interacting with foreign customers, suppliers, competition can lead to new opportunities **IMPROVE PRODUCTS** Remain open to free flow of ideas - Toyota and B M W manage joint research and development - Reduced risk, state-of-the-art design, lower costs - Samsung and Bosch jointly produce batteries **ATTRACT AND RETAIN GLOBAL TALENT** Offer better employment opportunities - Better growth opportunities and insulation against unemployment - Relocate unneeded personnel to more prosperous locations **Cultural and Ethical Issues** - Social and cultural behavior differs - International laws, agreements, codes of conduct for ethical behaviors - Despite cultural and ethical differences, we observe extraordinary mobility of capital, information, goods, and people Mission and Strategies **Mission** statements tell an organization where it is going - the purpose or rationale for an organization's existence - Organization's purpose for being - Answers "What do we contribute to society?" - Provides boundaries and focus **Strategies** tell the organization how to get there - Develop action plan to achieve mission - Ensure functional areas have supporting strategies - Exploit opportunities and strengths, neutralize threats, and avoid weaknesses