INTRODUCTION TO OPERATIONS MANAGEMENT

Operations is that part of business organization that is responsible for

producing GOODS and or SERVICES.
Basic Functional areas of Organization
1. FINANCE
Securing financial resources and allocating those resources throughout
the organization
2. OPERATIONS
Producing the goods or providing the services offered by the
organization
3. MARKETING
Assessing consumer wants and needs, and selling and promoting the
organizations goods/services

OPERATIONS MANAGEMENT
Management of systems or processes that create goods or services.
Supply Chain
A sequence of activities and organizations involved in producing and delivering
goods and services.
Value added
The difference between the cost of inputs and the value or price of outputs.
The essence of the operations function is to add value during the production
process

PRODUCTION OF GOODS VS DELIVERY OF PRODUCTS

The differences involve the ff.
1.
2.
3.
4.
5.
6.
7.
8.

Degree of customer contact.

Uniformity of input and output.
Labor content of jobs.
Production and delivery.
Quality assurance.
Amount of inventory.
Evaluation of work.
Ability to patent design.

PROCESS MANAGEMENT
Process

- One or more actions that transform inputs into outputs.

CATEGORIES OF BUSINESS PROCESSES

Upper-management processes
Govern the operations of the entire organization.
Operational processes
Core processes that make up the value stream.
Supporting processes
Support the core processes.

Managing a Process to Meet Demand

Ideally, the capacity of a process will be such that its output just matches
demand.

Process Variation
Sources:
1. Variety of goods or services being offered
The greater the variety of goods and services , the greater the
variation in
production process.
2. Structural Variation in demand
Trends and seasonal variation that are important in capacity planning.
3. Random variation
Present to some extent in all processes, cannot generally be influenced
by
managers.
4. Assignable variation
Can be reduced or eliminated by analysis and corrective actions.

SCOPE OF OPERATIONS MANAGEMENT

The scope of operations management ranges across the organization. This
involves product and service design, process selection, selection and management
of technology, design of work systems, location planning, facilities planning, and
quality improvement of the organizations products and services.