Introduction to

Operations
Management
“
⊷ Operations management –
the activities, responsibilities
and decisions that make up
the task of managing of the
process of transforming
inputs such as materials,
people, energy and
information into services and
products
Figure 1.1

The management of systems or processes

that create goods and/or provide services

Organization

Finance Operations Marketing

Figure 1.2
The difference between the cost of inputs
and the value or price of outputs.
Value added
Inputs
Transformation/ Outputs
Land
Conversion Goods
Labor
process Services
Capital
Feedback

Control
Feedback Feedback
 Industrial
Engineering
Maintenance
Distribution

Purchasing Public
Operations Relations

Legal
Personnel

Accounting MIS
 Figure 1.3

Steel production Home remodeling Auto Repair Maid Service Teaching

Automobile fabrication Retail sales Appliance repair
Manual car wash
Lawn mowing

High percentage Low percentage

goods goods
Low percentage High percentage
service service
Table 1.2

Inputs Processing Outputs

Raw Vegetables Cleaning Canned
Metal Sheets Making cans vegetables
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment
Table 1.2

Inputs Processing Outputs

Doctors, nurses Examination Healthy

Hospital Surgery patients
Medical Supplies Monitoring
Equipment Medication
Laboratories Therapy
Production of Goods vs. Delivery of
Services

⊷ Production of goods –
tangible output
⊷ Delivery of services – an act
⊷ Service job categories
⊶ Government
⊶ Wholesale/retail
⊶ Financial services
⊶ Healthcare
⊶ Personal services
⊶ Business services
⊶ Education
Key Differences

1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
⊷ The operations function
⊶ Consists of all activities directly
related to producing goods or
providing services
⊷ The operations manager
⊶ He or she has the ultimate
responsibility for the creation of
goods or provision of services
⊷ Factors affecting the complexity of
operations function:
⊶ The size of an organization and
associated service/product
volumes
⊶ The nature of the services and
products provided
⊶ The technology levels embodied in
both the services/products
involved and the processes used
within the operations function
⊶ The extent to which the services
and products are made in-house
Table 1.6
Planning Organizing
– Capacity – Degree of centralization
– Location – Process selection
– Products & services Staffing
– Make or buy – Hiring/laying off
– Layout – Use of Overtime
– Projects Directing
– Scheduling – Incentive plans
Controlling/Improving – Issuance of work orders
– Inventory – Job assignments
– Quality
– Costs
– Productivity
⊷ The role of the operations manager
⊶ Managing a large cost center
⊶ Managing the short and long term
⊶ Managing strategic contribution
⊶ Managing technology
⊶ Coordinating the whole
⊶ Using the common denominators
of time and money
⊶ Managing the process through
people
⊷ The role of the operations manager
⊶ Linking the thinking and doing
ends of a business
⊶ Managing complexity
Recent Trends
1. Global marketplace
2. Operations strategy
3. Total quality management
4. Flexibility
5. Time reduction
6. Technology
7. Worker involvement
8. Reengineering
Recent Trends
9. Environmental issues
10. Corporate downsizing
11. Supply-chain management
12. Lean production
“ End.