By: Mae Therese A.

Peronce, DBA
 Policies and Expectations
Class participation is required.
Attendance is a must.
All students are expected to complete their own work.
Students must read the powerpoint before class and be
prepared for discussion.
Work is expected to be handed in on time. There will be
deduction for each day late submission.
Course Description
Why study operations management?
This course will help you familiarize the operations
management as one of the most important functions in an
organization. This will help you prepare to be successful in this
new business environment. This subject will give you an
overview about how goods and services are produced and
how managers make decisions to gain competitive advantage
over the competitors.
 T
1. Definition of Operations Management
O
2. Role of Operations Management
P
I
3. Five Main Decisions Operations Managers C
Consider

S
Topics:
Define Operations Management
1. Definition of Operations Management
2. Role of Operations Management
3. Five Main Decisions Describe the five main
decisions made by operations
and supply chain managers.

Value the role of operations

management in a business
 WHAT IS
OPERATIONS
MANAGEMENT?
What is Operations
Management?
Operations (n.)
– generally, it means the quality or state of being functional
(Meriam-Webster)
- The actions and decisions made by participants and
members of a business that affect the production,
distribution, service, management, etc. needed for a
company to function that requires the use of resources and
assets.
- If nothing is working, it is non-operational or non-functional
 Management (n.)

– Getting people to work together

for the attainment of an
organization’s goals and objectives.

“getting things done through others”

 Every business is managed through three major functions:
FINANCE, MARKETING, AND OPERATIONS MANAGEMENT.

Marketing Finance
responsible for sales, generating Responsible for acquiring and utilization of
customer demand, and understanding funds necessary for efficient operations.
customer wants and needs.

*Most of us have some idea of what finance and marketing are about,
but what does operations management do?
 What is Operations
Management?

It is the business It is the management It is the central core

function that plans, of processes that function of every
organizes, coordinates, transform inputs into company.
and controls the goods and services
resources needed to that add value for the It focuses on decisions
produce a company’s customer. for the production and
goods and services. delivery of the firm’s
product and services.
Do you believe that every
company must have
operations function?
MARKETING OPERATIONS FINANCE
 KEY TAKEAWAYS

Whether the company is All the other organizational Operations Management

large or small, provides a functions exist to support plans and coordinates all
physical good or a service, is the operations function. the resources needed to
for-profit or not-for-profit. Without operations, there design, produce, and
deliver the merchandise
Every company has an would be no goods or to the various retail
operations management services to sell. locations.
function.
ROLE OF OPERATIONS
MANAGEMENT
 The role of operations management is to transform a
company’s inputs into the finished goods or services.
INPUTS OUTPUT
Manpower Material Final products and services
Machineries Money
 OPERATIONS AS A
TRANSFORMATIONAL PROCESS
• In a manufacturing company the transformation is
the physical change of raw materials into products.
In a service, ex. airline it is the efficient movement
of passengers and their luggage from one location
to another. At a hospital it is organizing resources
such as doctors, medical procedures, and
medications to transform sick people into healthy
ones.
• Operations management is responsible for
arranging all the resources needed to produce the
final product. This includes designing the product;
deciding what resources are needed; arranging
schedules, equipment, and facilities; managing
inventory; controlling quality; designing the jobs to
make the product; and designing work methods.
• Customer feedback and performance information
are used to continually adjust the inputs, the
• This transformation process is dynamic in order to adapt transformation process, and the characteristics of
to changes in the environment. the outputs.
What is the Important Element of
Operations Management?
The important
element of
Operations
Management is the…
For example, if an organization makes furniture, some of the operations
management decisions involve the following:
• purchasing of raw materials,
• hiring and training workers,
• location and layout of the furniture
factory,
• purchase cutting tools and other
fabrication equipment.
Five Main Decisions Made by
Operations Managers
• Operations managers must put
emphasis into making decisions
regarding operations and
transformation systems used.
• What will happen if managers choose
wrong decisions?
• What are the areas that operations
managers must consider?
1. PROCESS
Process decisions about
the physical production
process, technology, and
layout, types of work to be
done, the amount of
automation to use and
methods of improving
existing processes.
2. CAPACITY

Decide on sufficient
output capacity for the
organization, not too low
and not excessive.
3. INVENTORY
Inventory – An approach to
sourcing, storing, and selling inventory
—both raw materials and finished
goods

Decisions here are made about the

right stock, at the right levels, in the
right place, at the right time, and at
the right cost as well as price.
4. SUPPLY CHAIN
The supply chain decisions consist
of sourcing and logistics. Sourcing
is done by selecting suppliers for
all inputs, negotiate prices, and so
on. Logistics takes care of
transportation of inputs from the
suppliers and final goods to the
customers.
5. QUALITY
- standard; degree of excellence
(Oxford Dictionary)
The most important factor to be
consider is the quality. This define the
expected quality from the customers’
viewpoint, establish policies and
procedures that the company intends
to adapt towards attaining such
quality.
 Group Discussion
Instruction: Select your group members and form six groups.
Do the following below:

Create own input-process-output transformation

Choose one member to discuss in the class
References:
• https://catalogimages.wiley.com/images/db/pdf/9781119497332.exc
erpt.pdf
•
https://courses.lumenlearning.com/boundless-business/chapter/intro
duction-to-operations-management/
)