Operation Management - Operation Management Introduction to...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Operation Management Introduction to Operation Management: Operations Management is the management of that part of an organization that is responsible for producing goods and /or services. There are examples of these goods and services all around us (every…) The Operations function in business can also be viewed from a more far-reaching perspective: The collective success or failure of companies’ operations functions has an impact on the ability of a nation to compete with other nations and has also an impact on the economy. All businesses (doesn't matter whether it's the service sector or the manufacturing sector) have three basic functional areas: finance, marketing and operations. Operation is responsible of producing the goods or services offered by the organization. To punt it into perspective, if a business organization was a car, operations would be its engine. And just as the engine is the core of what a car does, in a business organization, operations is the core of what the organization does. Hence Operation Management is the management of systems and processes that create goods and services. The creation of goods and services involves transforming or converting inputs into outputs. Various inputs such as capital, labor and information are used t create goods or services using one or more transformation processes (e.g., Storing, transporting, cutting). To ensure that the desired outputs are obtained, an organization takes measurement at various points in the transformation process (feedback) and then compares them with previously established standards to determine whether corrective action is needed (control). (p.5 figure 1.2) The goods –service combination is a continuum. It can range from primarily goods with fewer service or primarily service with fewer goods. Because there are relatively few pure goods or pure services, companies usually sell product packages which are a combination of goods and services. This makes managing operations more interesting, and also more challenging. The essence of the operations function is to add value during transformation process. (Value-added is the term used to describe the difference btw the cost of input and the value or price of outputs). In non-profit organization, the value of outputs is their value to society. The greater the value-added, the greater the effectiveness of these operations. In a profit organization, the value of outputs is measured by the prices that consumers are willing to pay for those goods or services. Firms used the money generated by value-added for research and development, investment in new facilities and equipment, worker salaries and profits. There are many factors that affect the design and mgt of operation systems. Among them are the degree of involvement of customers in the process and the degree to which technology is used to produce and /or deliver a product or service. The greater the degree of customer involvement, the more challenging it can be to design and manage the operation. Technology
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Operation Management - Operation Management Introduction to...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online