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❶ What is production

the creation of goods and services

❷ What is OM

The set of activities that create value in the form of goods and services by
transforming inputs into outputs
Om is larger than productions
Om starts before production
Include production
Continue after production

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❸ What is supply chain

A global network of organizations and activities that supply a firm with goods and
services

❹ Why we study OM The importance of OM

1. To understand how people organize themselves

2. To understand how goods and services are produced
3. To understand what operation managers do
4. OM is such a costly part of an organization

❺ Functions of Operation
managers

1. Planning
2. Organizing
3. Staffing
4. leading
5. controlling

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❻ What are the OM 10

strategic decisions

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❼What are the differences between goods and

services

❽ What is productivity

A measure of the ratio of outputs divided by inputs

❾ What is production

A measure of output only

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❿ what is the importance of productivity

It determines our standard of living

High productivity = high standard of living
Low productivity = low standard of living

⓫ what is the difference between

productivity and production

Production is a measure of units of output produced regardless of the input used

while productivity is the ratio of output produced divided by the input used and it
can be used as a measure of process improvement

⓬ single factor productivity

Indicates the ratio of goods and service produced (output) to one resource (input)

⓭ multi factor productivity

Indicates the ratio of goods and service produced (output) to many or all resource
(input)

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⓮ productivity measurement problem

1. Quality may change while input and output remain the same
HDTV & UHDTV

2. External elements
Electricity outage, political
stability and weather conditions

3. Precise unit of measurement may be lacking

Atos vs Tucson

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⓯ what are the productivity variables

The 3 factors critical to productivity improvement

1. Labor 10%
Education diet social overhead
2. Capital 38%

3. Management 52%
Effective use of labor and capital
Use of knowledge
Apply of technology
Knowledge societies
Difficult challenge

⓰ what is a knowledge society

roductivity variables
A society in which much of the labor force
has migrated from manual work to a work
based on knowledge

Japanese society

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⓱ why it is difficulty to improve

productivity in the service sector

1. Labor intensive
Cleaning

2. Focused on unique individual attributes

Investment

3. Intellectual tasks performed by professionals

Legal service

4. Difficult to mechanize or automate

Child care

5. Difficult to evaluate quality

Hair cut

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⓲ what are OM challenges

1. Globalization
Global competition global collaboration global operation
2. Supply chain partnering
Because of demanding customers and technology changes supply chain
need to be In tune with customers’ needs and be very responsive
3. Sustainability
Green products, packaging, recycling and environment friendly
4. Rapid product development
Change in tech communication life style forces OM to collaborate and Ally to
be responsive
5. Mass customization
Flexible designs and production process to cope with customers tastes and
preferences
6. Just in time performance / LEAN production
Zero waste no extra inventory customer satisfaction employee respect
enriched jobs employee engagement
7. Empowered employees
Autonomy independence and trust that might conflict with the operation
managers style and method of working

⓳ what are Operation

managers challenges

1. Produce safe, high quality and green products

2. Train and motivate employees
3. Honor stakeholder commitments