Management 2070: Jan 12

Functional Relationships: activities in all other areas are interrelated with OM activities

- Engineering/technical function - Product/service development function - MARKETING FUNCTION - Information Technology (IT) function - Human Resources Function - ACCOUNTING AND FINANCE FUNCTION (all surrounding OPERATIONS FUNCTION)

Primary Business Functions:

- Finance/Accounting - Marketing - Operations is the core

What Operations Managers do:

- Planning - Organizing (Direct) - Staffing - Leading - Controlling

Key Decisions of Operations Managers

- WHAT: resources, what amounts - WHEN: needed, scheduled, ordered - WHERE: work is to be done - HOW: designed - WHO: to do the work

Production is making (creation) of goods and services

- high production may imply only that more people are working and that employment levels are high (low employment) but that does not imply high productivity

Service Delivery

- intangible product - inconsistent product definition - produced and consumed at the same time - often unique - high customer interaction - often knowledge-based - frequently dispersed

The Heritage of OM (not as important to know)

- started with the industrial revolution

Goods Production

- tangible product - consistent product definition - production usually separate from consumption - can be inventoried - low customer interaction

General approach to decision making includes:

- use of models - quantitiative methods - analysis of trade-offs - using a systems approach - establishing priorities - ethics & social responsibility

Productivity is the ratio of outputs (goods and services) divided by one or more inputs (such as labour, capital, or management) - it enables measurement of process improvement

-productivity isn't everything but in the long run it is almost everything - a country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker

The Critical Decisions:

1. Design of goods and Services 2. Managing Quality 3. Process and Capacity Design 4. Location Strategy 5. Layout Strategy 6. HR and job design 7. Supply-chain management 8. Inventory, material requirements planning (MRP), and JIT 9. Intermediate and short-term scheduling 10. Maintenance

In most industrialized countries, services represent a much ________ percentage of GDP than manufacturing

In most industrialized countries, services represent a much LARGER percentage of GDP than manufacturing

Airline Company

Management Science - one of the big issues - how many seats on each day on each plane should we sell? Gigantic program

Productivity =

Output / Input

Is OM a costly part of an organization?

Yes, a large percentage of a company's expenses occur in OM area

Are there a large number of all jobs in the OM area?

Yes, such as: purchasing, quality, planning, scheduling, inventory, etc.

An operations manager's chief role is that of

a decision maker - has considerable influence over the degree to which goals and objectives are reached

one of the primary responsibilities of an operations manager is to

achieve productive use of an organization's resources

Operations - is the core

creates the product or services

Marketing

generates demand

Characteristics of Goods & Services

manufacturing and services organizations differ mainly because manufacturing is GOODS-oriented and services is ACT-oriented

Production

the creation of goods and services

Operations Manager

the operations manager is the key figure in the system, he or she has the ultimate responsibility for the creation of goods or the provision of services

Operations Management (OM)

the set of activities that create value in the form of goods and services by transforming inputs into outputs

OM is one of _________ major functions of any organization

three

Finance/ Accounting

tracks organization performance, accesses financing, pays bills, collects the money