Operations Management
Topic 1: Introduction to Operations Management
Operations - The part of a business organization that is responsible for producing goods and services
Operations Management - management of systems or processes that create goods and/or provide services
- Science and art of ensuring that goods and services are created and delivered successfully to customers
Operations Managers - make decisions regarding the operations function and its connection with other functions - plan and control the production process and its interfaces within the organization and with the external environment
OM Decisions
1. Process - how to produce and deliver
2. Quality - criteria, measurement, and process
3. Capacity - physical facilities and labor
4. Inventory - what, when, and how much
OM Functions
Organization - Marketing, Operations, Finance (operations at the core of any business)
Marketing and Finance - two other primary functions and supports Ops
Operations
Cross Functional Decisions (venn diagram)
OPS
MKTG
OPS
FIN
MKG
BA 105 - Midterm Exam Reviewer Page 1
FIN
Topic 1: Introduction to Operations Management
Value Chain Perspective
Value - perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them
- perceived benefits/ price (cost) to the customer
- HIGH VALUE RATIO = HIGH PERCEIVED BENEFITS
Value Chain - network of facilities and processes that describes the flow of goods, services, information, and financial transactions from suppliers through the facilities and processes that create goods and services to deliver them to customer
BA 105 - Midterm Exam Reviewer Page 2
Topic 1: Introduction to Operations Management
OM Issues and Trends
Major Trends
- The Internet, e-commerce, e-business
- Management technology
- Globalization "Borderless Marketplace"
- Outsourcing
- Rising customer expectations
- Demand for empowerment
- Ethical
Operations - The part of a business organization that is responsible for producing goods and services
Operations Management - management of systems or processes that create goods and/or provide services
- Science and art of ensuring that goods and services are created and delivered successfully to customers
Operations Managers - make decisions regarding the operations function and its connection with other functions - plan and control the production process and its interfaces within the organization and with the external environment
OM Decisions
1. Process - how to produce and deliver
2. Quality - criteria, measurement, and process
3. Capacity - physical facilities and labor
4. Inventory - what, when, and how much
OM Functions
Organization - Marketing, Operations, Finance (operations at the core of any business)
Marketing and Finance - two other primary functions and supports Ops
Operations
Cross Functional Decisions (venn diagram)
OPS
MKTG
OPS
FIN
MKG
BA 105 - Midterm Exam Reviewer Page 1
FIN
Topic 1: Introduction to Operations Management
Value Chain Perspective
Value - perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them
- perceived benefits/ price (cost) to the customer
- HIGH VALUE RATIO = HIGH PERCEIVED BENEFITS
Value Chain - network of facilities and processes that describes the flow of goods, services, information, and financial transactions from suppliers through the facilities and processes that create goods and services to deliver them to customer
BA 105 - Midterm Exam Reviewer Page 2
Topic 1: Introduction to Operations Management
OM Issues and Trends
Major Trends
- The Internet, e-commerce, e-business
- Management technology
- Globalization "Borderless Marketplace"
- Outsourcing
- Rising customer expectations
- Demand for empowerment
- Ethical