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ME- 451
Engg Management &
Entrepreneurship
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Chapter 1

Introduction to the Field

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OBJECTIVES
 Operations Management (OM)
 Why Study Operations Management?

 Transformation Processes Defined

 Operations as a Service

 The Importance of Operations

Management
 Historical Development of OM

 Current Issues in OM

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What is Operations Management?

Defined
Operations Management (OM) is
defined as the design, operation,
and improvement of the systems
that create and deliver the firm’s
primary products and services

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Why Study Operations

Management?
Systematic Approach
to Org. Processes

Business Education Operations Career Opportunities

Management

Cross-Functional
Applications

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What is a Transformation
Process?

Defined
A transformation process is defined
as a use of resources to transform
inputs into some desired outputs

5P’s
People, Plants, Parts, Processes, Planning & Control

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 Field of OM
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 Transformation Processes

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Transformations
 Physical--manufacturing

 Locational--transportation

 Exchange--retailing

 Storage--warehousing

 Physiological--health care

 Informational--telecommunications

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Difference b/w Services and

Goods?

 “If you drop it on your foot, it won’t

hurt you.” (Good or service?)

 “Services never include goods and

goods never include services.” (True or
false?)

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OM in the Organization Chart

Finance Operations Marketing

Plant Operations Director

Manager Manager

Manufacturing, Production control,

Quality assurance, Engineering,
Purchasing, Maintenance, etc

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Operations as

Service

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Core Services
Defined

Core services are basic things

that customers want from
products they purchase

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Core Services Performance Objectives

Quality

Operations
Flexibility Speed
Management

Price (or cost

Reduction)

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Value-Added Services
Defined
Value-added services
differentiate the organization
from competitors and build
relationships that bind
customers to the firm in a
positive way

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Value-Added Service Categories

Problem Solving

Operations Sales Support

Information
Management
(OM)

Field Support

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