Chapter 1: Productivity and Operations Management
B. Main Processes of a Company
C. Aspects of Productivity
Chapter 2: Operations Strategy for a Competitive Advantage
A. Competitive Strategies
B. Operations Strategy& Process
Operations Management is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. Operations management is a management function. It involves managing people, equipment, technology, information, and many other resources. Operations management is the central core function of every company. This is true whether the company is large or small, provides a physical good or a service, is for profit or not for profit. Every company has an operations management function. Actually, all the other organizational functions are there primarily to support the operations function. Without operations, there would be no goods or services to sell. Consider a retailer such as Gap that sells casual apparel. The marketing function provides promotions for the merchandise, and the finance function provides the needed capital. It is the operations function, however, that plans and coordinates all the resources needed to design, produce, and deliver the merchandise to the various retail locations. Without operations, there would be no goods or services to sell to customers.
The role of operations management
The role of operations management is to transform a company’s inputs into the finished goods or services. Inputs include human resources (such as workers and managers), facilities and processes (such as buildings and equipment), as well as materials, technology, and information. Outputs are the goods and services a company produces. At a factory the transformation is the physical change of raw materials into products, such as transforming leather and rubber into sneakers, denim into jeans, or plastic into toys. At an 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 orchestrating 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. Basically, operations management is responsible for all aspects of the process of transforming inputs into outputs. Customer feedback and performance information are used to continually adjust the inputs, the transformation process, and characteristics of the outputs. The transformation process should be dynamic in order to adapt to changes in the environment. Proper management of the operations function has led to success for many companies. For example, in 1994 Dell Inc. was a second-tier computer maker that managed its operations similar to others in the industry. Then Dell implemented a new business model that completely changed the role of its operations function. Dell developed new and innovative ways of managing the operations function that have become one of today’s best practices. These changes enabled Dell to provide rapid product delivery of customized products to customers at a lower cost, and thus become an industry leader. Just as proper management of operations can lead to company success, improper management of operations can lead to failure.
Operations management is the systematic direction and control of the processes that transform inputs into finished goods and services. The operations function comprises a significant percentage of the employees and...
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