OM300 exam study guide

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