WHAT IS OPERATIONS MANAGEMENT?
The business functionresponsible for planning,coordinating,and controllingthe resources needed toproduce a company’s goodsand services.
To transform organizationalinputs into outputs.
V.P. of Marketing
V.P. of FinancePresident or CEO
V.P. of OperationsManages: people,equipment,technology,materials, andinformationTo produce: goodsand/orservicesManages: customerdemandsGenerates: sales forgoods andservicesManages: cash flow,current assetsand capitalinvestments
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
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
At a factory the transformation is the
• HumanResources• Facilities& Processes• Technologies• Materials
• Goods• ServicesPerformance InformationCustomer Feedback
The transformation process