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
