CHAPTER 1:

Goods, Services and

Operations Management
LEARNING OUTCOMES:

1. Core Business Functions

2. Explain the concept of Operations
Management.
3. Describe what operations manager do.
4. Explain the differences between goods and
services.
5. Historical Development of Operations
Management
 LET’S GET STARTED…

Describe one experience you had at a theme park,

restaurant or hotel that illustrates either good or
bad customer service or operational design.

What can we learn from your experience regarding

how a theme park, restaurant or hotel can create
a positive customer experience or improve on a
bad one through its design and operations?
 CORE BUSINESS FUNCTIONS:
The CEO is the highest-ranking executive
President/ and is typically responsible for shaping the
company's vision, making key decisions, and
CEO overseeing its operations.

Human
Finance Marketing Operations
Resources
The business function of
The business function of Finance refers to
The business function of
HR refers to building and handling of the
operations refers to the
maintaining a successful company’s money. This The business function of
activities and processes
team of employees who core function exists to marketing creates brand
within an organization
have the skills and ensure that the business awareness and engages
that are responsible for
experience to achieve the spends and invests money potential customers.
producing goods or
company’s primary and properly so that it can
delivering services.
core functions. continue to operate
successfully.
OPERATIONS MANAGEMENT
 Is the science and art of ensuring that goods and services are
created and delivered successfully to customers.
 Is a delivery-focused area in business which ensures that an
organization successfully turns inputs to outputs in an efficient
manner.
 The business function responsible for planning, coordinating,
and controlling the resources needed to produce a products
and/or services for a company
 Applying the principles of OM entails a solid understanding of
people, processes, and technology, and how they are
integrated within business systems to create value.
WHAT DO OPERATIONS MANAGERS DO?
1. Transforms inputs to outputs
2. Helping managers do more with less.
3. Ensuring that resources (labor, equipment,
materials and information) and operations are
coordinated.
4. Exploiting technology to improve productivity.
5. Building quality into goods, services, and processes.
6. Creating a high-performance workplace.
7. Continually learning and adapting the organization
to global and environmental changes.
OM’s DECISION
UNDERSTANDING GOODS AND SERVICES
 A GOOD- is a physical product that you can see,
touch, or possibly consume.
• is a product
Durable that typically
goods lasts at least
three years.

• is perishable
Non- and generally
durable lasts for less
goods than three
years.
UNDERSTANDING GOODS AND SERVICES

 SERVICE

- is any primary or complementary

activity that does not directly produce a
physical product.
HISTORICAL DEVELOPMENT OF
OPERATION MANAGEMENT
1. Industrial revolution Late 1700s
2. Scientific management Early 1900s
3. Human relations movement 1930s-60s
4. Management science 1940s-60s
5. Computer age 1960s
6. Environmental Issues 1970s
7. Just-in-Time 1980s
8. Total Quality Management 1980s
9. Reengineering 1980s
10. Global Competition 1980s
11. Flexibility 1980s
12. Time-based Competition 1990s
13. Electronic Commerce 2000s
14. Outsourcing and Flatenning of the world 2000s
HISTORICAL DEVELOPMENT OF OM
1. INDUSTRIAL REVOLUTION
-Late 1700s
-Brought in innovations that changed production by
using machine power instead of human power.

2. SCIENTIFIC MANAGEMENT
-Early 9000s
-Brought the concept of analysis and measurement
of technical aspects of work design and development
of moving assembly lines and mass productions.
HISTORICAL DEVELOPMENT OF OM
3. HUMAN RELATIONS MOVEMENT
-1930s to 1960s
-Focused on understanding human elements of job
design, such as worker motivation and job
satisfaction.

4. MANAGEMENT SCIENCE
-1940s to 1960s
-Focused on development of quantitative
techniques to solve operations problems.
HISTORICAL DEVELOPMENT OF OM
5. COMPUTER AGE
-1960s
-Enabled processing of large amounts of data and
widespread use of quantitative procedures.

6. ENVIRONMENTAL ISSUES
-1970s
-Considered waste reduction, the need of recycling
and product reuse.
HISTORICAL DEVELOPMENT OF OM
7. JUST-IN-TIME SYSTEM
-1980s
-Designed to achieve high-volume production with
minimal inventories.

6. TOTAL QUALITY MANAGEMENT (TQM)

-1980s
-Sought to eliminate causes of production defects.
HISTORICAL DEVELOPMENT OF OM
8. REENGINEERING
-1980s
-Required redesigning a company’s processes in order
to provide greater efficiency and cost reduction.

9. GLOBAL COMPETITION
-1980s
-Designed operations to compete in the global
market.
HISTORICAL DEVELOPMENT OF OM
10. FLEXIBILITY
-1990s
-Offered customization of mass scale.

11. TIME-BASED COMPETITION

-1990s
-Based on time such as speed of delivery.
HISTORICAL DEVELOPMENT OF OM
12. SUPPLY CHAIN MANAGEMENT
-1990s
-Focused on reducing the overall cost of the system
that manages the flow of materials and information
from suppliers to final customers.

13. ELECTRONIC COMMERCE

-2000s
-Uses the internet and World Wide Web for
conducting business activity.
HISTORICAL DEVELOPMENT OF OM
14. OUTSOURCING & FLATENNING OF THE WORLD
-2000s
-Convergence of technology has enabled outsourcing
of virtually any job imaginable from anywhere around
the globe, therefore “flattening” the world.
 END OF CHAPTER 1!

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