Introduction to

Operations Management

1
What is Operations Management?

The business function responsible for

planning, coordinating, and
controlling the resources needed to
produce a company’s products and
services

2
Typical Organization Chart

3
OM’s Transformation Role

4
Differences between Manufacturers
and Service Organizations

 Services:  Manufacturers:
 Intangible product  Tangible product
 Product cannot be  Product can be
inventoried inventoried
 High customer contact  Low customer contact
 Short response time  Longer response time
 Labor intensive  Capital intensive

5
Similarities-Service/Manufacturers
 All use technology
 Both have quality, productivity, & response
issues
 All must forecast demand
 Each will have capacity, layout, and location
issues
 All have customers and suppliers
 All have scheduling and staffing issues

6
Trends in OM
 Service sector growing
to 80% of non-farm
jobs
 Global competitiveness
 Demands for higher
quality
 Huge technology
changes
 Time based competition
 Work force diversity
7
OM Decisions

8
Today’s OM Environment
 Customers demand better quality, faster
deliveries, and lower costs
 Increased cross-functional decision
making
 Recognized need to better manage
information using ERP (Enterprise
Resource Planning) and CRM (Customer
Relationship Management) systems

9
Business Information Flow

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