OM300 exam study guide

Topics: Productivity, Computer-aided design, Better Pages: 5 (1655 words) Published: January 22, 2014
Operations Management- is the set of activities that create value in the form of g&s by transforming inputs into outputs- The business functions responsible for planning, coordination, and controlling the resources needed to produce a company’s products and services. Why Study it? OM is one of three major functions of any organization, we want to study how people organize themselves for productive enterprise. We want to know how goods and services are produced. We want to understand what operations managers do. OM is such a costly part of an organization. What OM People do. Planning Organizing Staffing Leading Controlling. Differences in Goods & Services Operations activities often very similar Distinction not always clear Few pure services Productivity- Productivity = Units Produced / Input Used(labor hours used). Measure of process improvement. Represents output relative to input. Only through productivity increases can our standard of living improve. Multi Factor Productivity = output / labor +material + energy + capital + miscellaneous. Also known as total factor productivity. Output and inputs are often expressed in dollars. Productivity Variables: Labor – 10% of annual increase. Capital – 38% of the annual increase. Management – 52% of the annual increase. Key Variables for improved labor productivity: Basic education appropriate for the labor force, Diet of the labor force, Social overhead that makes labor available. Challenge is in maintaining and enhancing skills in the midst of rapidly changing technology and knowledge. Management- ensures labor and capital are effectively used to increase productivity Productivity and the service sector- Typically labor intensive. Frequently focused on unique individual attributes or desires. Often an intellectual task performed by professionals. Often difficult to mechanize and automate. Often difficult to evaluate for quality. New Challenges in OM: Global focus, supply chain partnering, sustainability, rapid product development, mass customization, just in time performance, empowered employees. Operations Strategy in a Global Environment: Reasons to Globalize: Reduce costs- foreign locations with lower wage rates can lower direct/indirect costs. Improve supply chain-locating facilities closer to unique resources. Provide better g&s- objective and subjective characteristics of g&s. Understand markets- remain open to the free flow of ideas. Attract and retain global talent- offer better employment opportunities. Mission- statements tell an organization where it is going. Organization’s purpose for being. Answers ‘what do we provide society’. Provides boundaries and focus. Factors Affecting Mission: Environment, customers, benefit to society, public image, profitability and growth, philosophy and values. Strategy- action plan to achieve mission, functional areas have strategies, strategies exploit opportunities ad strengths, neutralize threats, and avoid weaknesses. Strategies for Competitive Advantage: *DCR: Differentiation- better, or at least different. Cost leadership- cheaper. Response- rapid response Issues in Operation Strategy: Resources view Value Chain Analysis. Porter’s Five Forces. Rivalry, Threat of substitutes, Buyer Power, Supplier Power, Barriers to entry. Operating in a system with many external factors. Constant change. Strategy Development and Implementation: Identify key success factors (Marketing, Finance/Accounting, and Production/Operations). Build and staff the organization. Integrate OM with other activities. The OM manager’s job is to implement an OM strategy, provide competitive advantage, and increase productivity. Subcontracting- contract manufacturing Outsourced activities: Legal services, Travel services, Payroll, Production, Surgery. Theory of Comparative Advantage: If an external provider can perform activities more productively than the purchasing firm, then the external provider should do the work. Purchasing firm focuses on Core competencies....
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