UNIVERSITY OF SAINT LOUIS

Tuguegarao City

SCHOOL OF ACCOUNTANCY, BUSINESS and HOSPITALITY

Second Semester
A.Y. 2023-2024

COURSE LEARNING MODULE

OMGT 1013 – Operations Management and Total Quality Management

Prepared by:

GLADYS T. TUMBALI, DBM

WARNING: No part of this E-module/LMS Content can be reproduced, or transported or shared to others without
permission from the University. Unauthorized use of the materials, other than personal learning use, will be penalized.
Please be guided accordingly.

OMGT 1013-Operations Management and TQM | 1

 COURSE LEARNING MODULE
OMGT 1013 (Operations Management and Total Quality Management)
AY 2023-2024

Lesson 1: Introduction to Operations Management

Topic: Why learn about OM?

Scope of OM
OM and Decision Making

Learning Outcomes: At the end of this module, you are expected to:

1. Formulate a concept of production and operations management;

2. Associate the concepts with the overall functions of the operations manager in the organization;
3. Be aware of the scope of OM.

LEARNING CONTENT

Introduction:

This introductory lesson focuses on activating your prior knowledge on Management. It may sound
repetitive on your part as you might have studied this already in Senor High School, however, we would like
you to have a smooth transition from high school lesson to college lessons. Afterall, it is just practical to start
our discussion with something you are familiar with, so that you may not find it difficult to adjust to the more
complicated topics.

So, when you hear the word Management, what comes into our mind? Perhaps you think of – a
business, people, managers, and the like. Several ideas might be running in your head now, and slowly you
are able to recall what you have learned in high school.

Management, as a distinct field of study, encompasses what we call “The Managerial Functions” of
Planning, Organizing, Staffing/Directing, Actuating, and Controlling. Now, our course, Operations
Management or Production and Operations Management (as previously known), is just one of the areas
of concern in management. However, we will still be talking about the Managerial Functions here as we study
this course.

NOTE: In the past, the term Production was considered to connote only the manufacture of tangible items.
Later, the term Operations was added to include references to non-manufacturing operations. That’s why
Production and Operations Management and Operations Management are just the same. But we stick with
our course description that is, Operations Management (OM).

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Lesson Proper:

Basic Concepts on Operations Management (OM)

Operations as a competitive weapon is important to…

Accounting, which prepares financial and cost accounting information that aids operations managers in
designing and operating production systems.

The production system consists of inputs, processes, outputs, and information flows that connect with
customers and the external environment. It uses operation resources to transform inputs into desired
outputs. It is considered as the heart of Operations Management.

Inputs – includes human resources ( workers, managers ), capital (equipment, facilities), purchased
materials and services, land, and energy

- It may also be raw materials, a customer, or a finished product from another system

Process – any activity or group of activities that takes one or more inputs, transforms and adds value to
them, and provides output for a customer

Finance, which manages the cash flows and capital investment requirements that are created by the
operations function.

Human Resources, which hires and trains employees to match process needs, location decisions, and
planned production levels.

Management Information Systems, which develops information systems and decision support systems for
operations managers.

Marketing, which helps create the demand that operations must satisfy, link customer demand with staffing
and production plans, and keep the operations function focused on satisfying customer’s needs.

Operations, which designs and operates production systems to give the firm a sustainable competitive
advantage.

Let’s take into consideration these terms, for us to have a clear understanding of our course description.

1.Production – creation of goods and/or services

2. Management - denotes both FUNCTION and PEOPLE who discharge the functions

- A distinct process of planning, organizing, staffing, directing (actuating)and controlling for the
achievement of stated objectives efficiently and effectively by the use of human beings and
other business resources.

3. Operations – encompasses the overall activities within the organization

4. Organization – a business, an entity, a private school, a government office, a hospital, a restaurant, a

religious organization, etc. that is composed of people

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5. Manufacturing firms – those companies/businesses engaged in the manufacture/creation/production of
tangible items. Tangible items are those that we could see and touch, like your smartphones,
laptops, house, buildings, etc.

6. Non-Manufacturing firms – those companies/business engaged offering non-tangible items. Non-tangible

items are those that we could experience or feel. It includes services of a hospital, a beautician, an
artist, a chef, a hotel, a school, and many others.

What is Production/Operations Management?

- Set of activities that creates goods and services by transforming inputs into outputs involving planning,
coordinating, and executing of all activities

- The management of systems or processes that creates goods and/or services

- The design, operation and movement of the production systems that create the firm’s primary product
or service.

Figure 1. OM Framework
Source: Chase, Richard,et.al. Production and Operations management, Manufacturing and Services 8th ed.

• The market place ( the firm’s customers for its products/services) shapes the firm’s corporate strategy.

• The corporate strategy must be based on the corporate mission and reflects how the firm plans to use
all its resources and functions ( marketing, finance, operations).

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• The operation’s strategy specifies how the firm will employ its production capabilities to support its
corporate strategy.

• The marketing strategy addresses how the firm will sell and distribute its g/s.

• The finance strategy identifies how best to utilize the firm’s financial resources.

Within the operations function, management decisions can be divided into three broad areas:

a. Strategic (long term) decisions – Operations management decision at this level impacts the company’s
long-range effectiveness in terms of how it can address its customer’s needs. Thus, for the firm to
succeed, these decisions must be in alignment with the corporate strategy

b. Tactical (intermediate term ) decisions – primarily addresses how to efficiently schedule materials and
labor within the constraints of previously made strategy decisions

c. Operational planning and control (short term) decisions – issues at this level include:

- What jobs do we work on today or this week?

- Who do we assign to what tasks?

- What jobs are priorities?

Operations resources consist of what we term Five P’s of OM

• People – direct and indirect workforce

• Plants – factories or service branches where production is carried out

• Parts – include the materials that go through the system

• Processes – equipment and steps by which production is accomplished

• Planning and Control system – procedure and information management used to operate the system

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 Figure 2: Functions within Business
Source: Chase, Richard,et.al. Production and Operations management, Manufacturing and Services 8th e

Operations – consists of all activities directly related to producing goods or providing services

- Usually responsible for the actual transformation of inputs into finished products/services

Transformations that take place may include:

- Physical, as in manufacturing

- Location, as in transportation

- Exchange, as in retailing

- Storage, as in warehousing

- Physiological, as in healthcare

- Informational, as in telecom

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 Figure 3: Example of Transformation
Source: Chase, Richard,et.al. Production and Operations management, Manufacturing and Services 8th ed.

Types of Operations

a. Goods Producing ( e.g. farming, mining, manufacturing)

b. Storage/Transportation ( e.g. warehousing, trucking, mail service, buses, hotel, airlines)

c. Exchange (e.g. retailing, wholesaling, banking, leasing, library, loans)

d. Entertainment (e.g. films, radio, TV, plays, concerts, recording)

e. Communication (e.g. newspapers, radio, TV, telephone, satellites)

Finance – secures and invests the company’s capital assets

Finance and operations management personnel cooperate by exchanging information and expertise in
activities such as:

a. Budgeting – budget must be periodically prepared to plan financial requirements

b. Economic analysis of investment proposal – evaluation of alternative investments in plant and

equipment requires inputs from both operations and finance people

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 c. Provision of funds – the necessary funding of operations and the amount and timing of funding
can be important and even critical when funds are tight

Marketing – consist of selling and/or promoting the g/s of an organization; generates demand for the
company’s output

- Responsible for assessing customer wants and needs for communicating to operations people

NOTE: The three major functions within a business are interdependent.

• Having the financial resources and the ability to produce a product are of little value if there is no
market for the product

• Having the finance and a market for a product are of little value when one cannot provide the product

• The ability to produce a product and a market for the product are not sufficient if one does not have the
necessary capital to employ personnel, buy raw materials and put the other capabilities into action.

Scope of Operations Management

The scope of OM ranges across organizations. OM people are involved in:

- Product and service design

- Process selection

- Selection and management of technology

- Design of work systems

- Location planning

- Facilities planning

- Quality improvement of products and services

The operations function includes many interrelated activities such as:

- Forecasting

- Capacity planning

- Managing inventories

- Assuring quality

- Motivating employees

- Locating facilities

- Scheduling

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 OM and Decision Making
Key decisions include:

1. What resources will be needed?

2. When will each resource be needed? When should the work be scheduled? When should materials and
other supplies be ordered? When is corrective action needed?

3. Where will the work be done?

4. How will the product or service be designed? How will the work be done? How will resources be
allocated?

5. Who will do the work?

General Approaches to Decision Making:

1. Models

2. Quantitative Approaches

3. Performance metrics

4. Analysis of Trade-Offs

5. Degree of Customization

6. Systems Approach

7. Establishing priorities

Models – an abstraction of reality, a simplified representation of something

Classifications:

1. Physical models-look like the real-life counterparts ( miniature cars,toy animals, scale-model bldg.,etc.)

2. Schematic models – are more abstract that their physical counterparts (e.g. graphs, charts, blueprints,
etc.)

3. Mathematical models – are the most abstract (e.g. numbers, formulas, symbols)

Quantitative Approaches to decision making in operations management have been accepted because of
calculators and computers capable of handling the required calculations.

Performance metrics are used to manage and control operations (e.g. metrics related to profits, costs,
quality, etc.)

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Analysis of Trade-Offs

- Decision makers compare the pros and cons of a course of action to better understand the
consequences of the decisions they make

Degree of Customization

- Highly customized products and services generally is more time consuming, requires highly skilled
people, and involves more flexible equipment than standardized ones.

Systems Approach

- Emphasizes interrelationships among subsystems but its main theme is the whole is greater than the
sum of its individual parts.

Establishing priorities

- Managers recognizing the importance of a certain issue than others enable them to direct their efforts
to where they will do the most good.

*** END of LESSON 1***

REFERENCES

Textbooks

Stevenson, William J. (2018). Operations management thirteenth edition. McGraw Hill Education, 2 Penn
Plaza, New York, NY 10121.

Collier, David Alan, et.al.(2020). Operations Management and Total Quality Management. Cengage Learning
Asia Pte. Ltd.

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WARNING: No part of this E-module/LMS Content can be reproduced, or transported or shared to others without
permission from the University. Unauthorized use of the materials, other than personal learning use, will be penalized.
Please be guided accordingly.

School of Accountancy, Business and Hospitality

Accountancy Department
AY 2021-2022

COURSE LEARNING MODULE

OMGT 1013 (Operations Management and Total Quality Management)

WORKSHEET – TASKS (Week 1 and 2)

NAME:
COURSE & YEAR:
INSTRUCTOR: Gladys T. Tumbali, MBA
Participation: Task #1 Share your insights on these questions. In not more than 10 sentences,

Why do we study Operations Management?

Rubric: Conciseness – 5 points
Relevance – 3 points
Grammar – 2 points

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 School of Accountancy, Business and Hospitality
Accountancy Department
AY 2021-2022

CORRESPONDENCE LEARNING MODULE

OMGT 1013 (Operations Management and Total Quality Management)

WORKSHEET – QUIZ

NAME:
COURSE & YEAR:
INSTRUCTOR: Gladys T. Tumbali, MBA
Evaluation: Directions: Identify the type of decision being referred to in each of the
statements/phrases below using the following choices. Write the letter only on
the first column.

P – Strategic Decisions
O – Tactical Decisions
M – Operational Decisions

1. Who do we assign to what tasks?

2. When should we add more capacity?
3. Impacts the company’s effectiveness in terms of how
it can address its customer’s needs.
4. When should we have the materials?
5. What jobs are priorities?
6. Routine and repetitive
7. Primarily addresses how the firm efficiently schedules
its materials and labor.
8. How much capacity do we need?
9. When do we need additional workers?
10. Broad in nature

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