CHAPTER ONE

THE OPERATION FUNCTION

Chapter Outline

1.1 Why study Operations Management?

1.2 Definition of Operations
Management and Supply Chain
1.3 Dicisions at Pizza U.S.A Inc,.
1.4 Operations Decisions — a framew
ork
1.5 Cross-Functional Decision Making
1.6 Operations as a process
Operations Management
is a process that involves planning, organizing,
managing, controlling and supervising the production
and manufacturing the processes of goods and servic
es.
 Production Management

⬇
Production and Operations Management

⬇
Operations Management
Operations Managers
People who are responsible for managing and en
suring that an organization is producing and manufac
turing the goods and services well.
Tranformation Processes
MANUFACTURING OPERA SERVICE OPERATIONS
TIONS

Inputs of raw materials w Same types of outputs ar

ill eventually transformed e transformed into servic
into an output or finished e outputs.
goods.

Tangible
Intangible
1.1 WHY STUDY OPERATIONS MA
NAGEMENT?
— As operations are necessary in order to run a busi
ness, working and understanding of operations will h
elp you do your job better.

— The aim of OM will help you provide the goods an

d service to the society by creating waste.
Professional Societies Affiliated with Operations and
Supply Chain Management
1.2 DEFINITION OF OPERATIONS
MANAGEMENT AND SUPPLY CHAINS

SUPPLY CHAIN OPERATIONS

— Its about developing a strategy to organize the flow o

f materials and services in an organization.
— It also includes the systems and processes to plan and
execute the flow of goods and services from the supplier
to customers.
— They always want to make sure that their supply chai
n is efficient and cost-effective.
 OPERATION FUNCTION PURCHASING FUNCTION

— — LOGISTIC FUNCTION
responsible for ensuring that
responsible for managing the suppliers fulfil their —
process of creation of goods commitment regarding quality responsible for the actual
and services and delivery of the product. goods and services.

These 3 functions within an organization manage the

supply chain for goods and services to satisfy their
customers
THREE POINTS THAT DESERVES
EMPHASIS:
1 DECISIONS
The above definitiom refers to decision making as
an important element of operations management.

2 FUNCTION
Function is also called Operations that refers to th
e functions that produces goods or services.
3 PROCESS
Its about the operation process when a raw mater
ials called INPUTS will eventually turned OUTPUTS.
DELL

- They manage their products and sevices well.

- Their focus is on how fast the inventory moves.
- They have a direct selling system, that allows custo
mers to order not just in person, but customers can a
lso bought dell's product online and in phone calls.
- Dell today has offering their customers a free comp
uter recycling and their programs: PLANT A TREE FOR
ME and PLANT A FOREST FOR ME.
PIZZA U.S.A., Inc,.

PROCESS
They allowed their customers to watch the proce
ss on how they make pizzas before giving it to them.
QUALITY
They are aware that they should maintain service
quality and ensure the quality of the pizzas served.
CAPACITY
Decisions about capacity determine the maximum
level of output of pizzas.

INVENTORY
Operators should plan and construct all the inven
tories that they will use.
PPM
Responsible for all the aspects about the
vehicles.
MM/PC
Responsible for handling, planning, and controllin
g all the activities including the selection of supplier
s.
CIM
Responsible for always making sure that the company
is improving.
DHCO
Responsible for helpinh the CEO in a long and short
term planning for special program needs, the patients, f
acilities and their employees.
VPGOSC
Responsible for global management of production.
1.4 OPERATIONS DECISIONS — A FRAMEWORK
PROCESS
about the process on how they make pizzas to
satisfy their customers.
QUALITY
always making sure that they have a qualit
y product to meet their customers expectations.
CAPACITY
always making sure to have the materials and employees
that they will be needing to make a quality product and services
.
INVENTORY
will manage materials that will be using in
making products, even if its too risky, they will pl
an it wisely.
1.5 CROSS—FUNCTIONAL
DECISION MAKING
Some organizations preffered
to have a CROSS FUNCTIONAL TE
AM.
— CFT is made
up of people from different a
reas in a company.
THREE FUNCTIONAL AREAS
MARKETING FUNCTION
responsible for creating demand and generating sales reve
nue
OPERATIONS FUNCTION
responsible for production of goods and services
FINANCE FUNCTION
responsible for the acquisition and allocation of
capital
1.6 OPERATION AS A PROCESS
-Again, its the processing of the goods and services
.

PROCESS TECHNOLOGY
the methods, procedures, and equipment used to
transform materials into products or services.
OPERATIONS MANAGEMENT

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