What is Operations Management?

Operations Management (OM) is defined as the

business function responsible for design, operation
and improvement of the systems that create and
deliver
the firm’s primary products and services.
What is Operations Management?
OM is a functional field of business with clear line
management responsibility.
Within the operations function, management
decisions can be divided into ;
 Strategic (long-term) decisions,
 Tactical (intermediate-term) decisions,
 Operational Planning and control (short- term)
decisions.
OM Decisions
What is Operations Management Role?
OM Transforms inputs to outputs

 Inputs are resources such as

 People or customers, Raw Material or a finished product

from another system and Money

 Outputs are goods and services

Doctors, nurses,
medical supplies,
Patients Health care Healthy individual
equipments
Input Resources Transformation Output
OM’s Transformation Process
 OM’s Transformation Role
 To add value

Increase product value at each stage

Value added is the net increase between output product

value and input material value

 Provide an efficient transformation

Efficiency – perform activities well at lowest possible

cost
 Differences between Services
Organization and Manufacturers
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
 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, suppliers, scheduling and staffing
issues
Manufacturing often provides services
Services often provides tangible goods
Some organizations are a blend of service/manufacturing /
Quasi-Manufacturing (QM) organizations
QM characteristics include
 Low customer contact & Capital Intensive