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Definition of Operation Management 2

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242 views24 pages

Definition of Operation Management 2

Uploaded by

Ros A Linda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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Definition of Operations

Management
By: R. Pacquiao and K.A. Alday
Operations Management is:
The business function responsible for
planning, coordinating, and controlling
the resources needed to produce products
and services for a company

© Wiley 2010 2
Operations Management is:
• A management function
• An organization’s core function
• In every organization whether Service or
Manufacturing, profit or Not for profit

© Wiley 2010 3
What is the Role of OM?
• OM Transforms inputs to outputs
– Inputs are resources such as
• People, Material, and Money

– Outputs are goods and services

© Wiley 2010 5
OM’s Transformation Process

© Wiley 2010 6
Transformation Process of a
Canned FoodProcessor
Inputs Processing Outputs
• Rawvegetables • Cleaning Canned
• Metal sheets • Making cans vegetables
• Water • Cutting
• Energy • Cooking
• Labor • Packing
• Building • Labeling
• Equipment
Transformation Process of aHospital

Inputs Processing Outputs


• Doctors, nurses • Examination Healthy
• Hospital • Surgery patients
• Medical Supplies • Monitoring
• Equipment • Medication
• Laboratories • Therapy
OM’s Transformation Role
• To add value
– Increase product value at each stage
– Value added is the net increase between output product value
and input material value

• Provide an efficient transformation


– Efficiency – means performing activities well for least possible
cost

© Wiley 2010 9
Examples of Various Operations
Operations Examples
Goods Producing Farming, mining, construction ,
manufacturing, power generation
Storage/ Warehousing, trucking, mail
Transportation service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
Types of Transformation Processes
Physical- manufacturing
Locational- transportation
Exchange- retailing
Storage- warehousing
Physiological- health care
Informational-
telecommunications
Psychological- entertainment
OM Decisions

© Wiley 2010 12
The Historical Evolution of
Operations Management
Significant Events in Operations
Management
Business Information Flow

© Wiley 2010 15
Business Functions – Manufacturer
(3 of 3)

Manufacturing

Finance/
Marketing Operations
Accounting

Production Quality
Manufacturing Purchasing
Control Control
New Concepts and Trends in
OM
Mass Customization
Supply Chain Management
Outsourcing
Lean manufacturing
Agility
Electronic Commerce
New Concepts and Trends(1
of 6):
Mass Customization
The rapid, low cost production of
goods and services that fulfill
constantly changing and
increasingly unique customer
desires.
New Concepts and Trends (2 of 6):
Supply Chain Management
 The management of the sequence of organizations- their
facilities, functions and activities- that are involved in
producing and delivering a product or service

 SCM requires the application of a systems approach to


managing the flow of information, materials and services
from raw material suppliers through factories and
warehoses to the end user (customer)
Simple Product Supply Chain

Suppliers’ Direct Final


Producer Distributor
Suppliers Suppliers Consumer
New Concepts and Trends (3 of 6) :

Outsourcing
Buying goods or services rather than
producing goods or performing
services within the organization
New Concepts and Trends (4 of 6):
Lean Manufacturing

 Systems that use minimal amounts of resources - less


space, less inventory, fewer workers, fewer levels of
management- to produce a high volume of high-quality
goods with some variety
New Concepts and Trends (5 of 6):
Agility
The ability of an organization to respond quickly
to demands or opportunities.

Involves maintaining a flexible system that can


quickly respond to changes in either the volume
of demand or changes in product/service
offerings
New Concepts and Trends (6 of
6): Electronic Commerce

The use of computer networks,


primarily the internet, to buy and
sell products, services, and
information.
Thank You!

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