|STAT 2800: doING bUSINESS IN eUROPE | |Operations Management | |Nordea v. Honka | | | |Taylor Linnell | |6/15/2008 |
|Professor Farina |
The barriers to communication and transportation are crumbling and the global marketplace is revolutionizing into a playing field that has never been so equal. Efficiency and effectiveness are two of the most powerful words that have surfaced in this new era of business where maintaining a competitive edge is the difference between succeeding and faltering to bankruptcy. At the forefront of this expanding new frontier is a relative young an innovative management strategy known as operations management. According to Heizer and Render “operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.” This definition can be used to explain two types of outputs, tangible and intangible. A tangible output or good is something physical that can be inventoried, resold, transportable, selling is distinct from production and is often easy to automate. Examples of tangible products could be cars, televisions, baseball hats or even log homes. Whereas an intangible output or service is something that can not be physically touched but provides something of value to the consumer. Services usually cannot be inventoried, selling is often part of the service, they are produced and consumed simultaneously, and the site of the facility is essential for customer contact. Buying airplane tickets, seeing a physician, getting a haircut and having an investment manager are all situations where the service is unique and is not tangible.
In order to create goods and services all businesses have to execute three functions: marketing, production/operations, and finance/accounting. Even though this paper will focus on operations it is important to briefly discuss all three functions in a broad sense. When an organization markets to a larger target audience its goal is to stimulate demand to relieve some of the surplus supply. In some simplistic cases it merely means taking the order for a product. Marketing can appear in several forms from commercials to coupons. Production/operations creates the product, whether it be a good or service. Finally, Finance/accounting tracks how well the company is doing, where money is being allocated, and collects money from consumers.
This paper will focus on the key concepts that revolve around operations management, with an intense concentration on the ten decision making areas. Following the background information on operations management, the paper will discuss two Nordic companies, Nordea Bank and Honka Homes, both of which adhere to the same decision making paradigms but have two very different outputs. History of Operations Management
There are several prominent contributors that gave way for a more formal understanding of what is now known as operations management. The OM discipline is centered around efficiency. The innovation of interchangeable parts by Eli Whitney in 1800 provided for groundbreaking speed and cost effectiveness. Since the same parts could be...
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