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operations management CH1

operations management CH1

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Published by teena6506763

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Published by: teena6506763 on Nov 19, 2008
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1
What Is Operations Management?
2
 Links to Practice: The E-tailers
4
Differences between Manufacturing and ServiceOrganizations
5
 Links to Practice: US Postal Service
6
Operations Management Decisions
7
 Links to Practice: Texas Instruments Incorporated 
9
Plan ofThis Book 
10
Historical Development
11
Today’s OM Environment
17
Operations Management in Practice
18
OM Across the Organization
19
Inside OM
21
Case:Hightone Electronics,Inc.
22
Case:Creature Care Animal Clinic (A)
23
LEARNING OBJECTIVESCHAPTER OUTLINE
CHAPTER
After completing this chapter you should be able to:
Define operations management.Explain the role ofoperations management in business.Describe decisions that operations managers make.Describe the differences between service and manufacturing operations.Identify major historical developments in operations management.Identify current trends in operations management.Describe the flow ofinformation between operations management and other businessfunctions.
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Introduction toOperations ManagementIntroduction toOperations Management
 
2
CHAPTER 1INTRODUCTION TO OPERATIONS MANAGEMENT
M
any ofyou reading this book may think that you don’tknow what operations management (OM) is or that itis not something you are interested in.However,afterreading this chapter you will realize that you already knowquite a bit about operations management.You may evenbe working in an operations management capacity andhave used certain operations management techniques.Youwill also realize that operations management is probablythe most critical business function today.Ifyou want to beon the frontier ofbusiness competition,you want to be inoperations management.Today companies are competing in a very different environment than they were onlya few years ago.To survive they must focus on quality,time-based competition,effi-ciency,international perspectives,and customer relationships.Global competition,e-business,the Internet,and advances in technology require flexibility and responsiveness.This new focus has placed operations management in the limelight ofbusiness,becauseit is the function through which companies can achieve this type ofcompetitiveness.Consider some oftoday’s most successful companies,such as Wal-Mart,SouthwestAirlines,General Electric,Starbucks,Toyota,FedEx,and Procter & Gamble.These com-panies have achieved world-class status in large part due to a strong focus on operationsmanagement.In this book you will learn specific tools and techniques ofoperationsmanagement that have helped these,and other companies,achieve their success.The purpose ofthis book is to help prepare you to be successful in this newbusiness environment.Operations management will give you an understanding of how to help your organization gain a competitive advantage in the marketplace.Regardless ofwhether your area ofexpertise is marketing,finance,MIS,or opera-tions,the techniques and concepts in this book will help you in your businesscareer.The material in this book will teach you how your company can offer prod-ucts and services cheaper,better,and faster.You will also learn that operationsmanagement concepts are far reaching,affecting every aspect ofthe organizationand even everyday life.
Finance, Marketing
Every business is managed through three major functions:finance,marketing,andoperations management.Figure 1-1 illustrates this by showing that the vice presidentsofeach ofthese functions reports directly to the president or CEO ofthe company.Other business functions—such as accounting,purchasing,human resources,andengineering—support these three major functions.Finance is the function responsi-ble for managing cash flow,current assets,and capital investments.Marketing is re-sponsible for sales,generating customer demand,and understanding customer wantsand needs.Most ofus have some idea ofwhat finance and marketing are about,butwhat does operations management do?
WHAT IS OPERATIONS MANAGEMENT?
 
WHAT IS OPERATIONS MANAGEMENT?
3
Operations management
The business functionresponsible for planning,coordinating,and controllingthe resources needed toproduce a company’s goodsand services.
Role ofoperationsmanagement
To transform organizationalinputs into outputs.
Marketing
V.P. of Marketing
Finance
V.P. of FinancePresident or CEO
Operations
V.P. of OperationsManages: people,equipment,technology,materials, andinformationTo produce: goodsand/orservicesManages: customerdemandsGenerates: sales forgoods andservicesManages: cash flow,current assetsand capitalinvestments
FIGURE 1-1
Organizational chartshowing the three majorbusiness functions
Operations management (OM)
is the business function that plans,organizes,coordinates,and controls the resources needed to produce a company’s goodsand services.Operations management is a
management 
function.It involves managingpeople,equipment,technology,information,and many other resources.Operationsmanagement is the central core function ofevery company.This is true whether thecompany is large or small,provides a physical good or a service,is for profit ornot for profit.Every company has an operations management function.Actually,all the other organizational functions are there primarily to support the operationsfunction.Without operations,there would be no goods or services to sell.Considera retailer such as Gap that sells casual apparel.The marketing function providespromotions for the merchandise,and the finance function provides the neededcapital.It is the operations function,however,that plans and coordinates all theresources needed to design,produce,and deliver the merchandise to the various retaillocations.Without operations,there would be no goods or services to sell to customers.The
role ofoperations management
is to transform a company’s inputs into thefinished goods or services.Inputs include human resources (such as workers and man-agers),facilities and processes (such as buildings and equipment),as well as materials,technology,and information.Outputs are the goods and services a company produces.Figure 1-2 shows this
transformation process.
At a factory the transformation is the
Inputs
• HumanResources• Facilities& Processes• Technologies• Materials
TheTransformationProcessOutputs
• Goods• ServicesPerformance InformationCustomer Feedback
FIGURE 1-2
The transformation process

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