UNIT-1 Introduction to POM

• Introduction to POM
• Operations strategy
• strategy design process
• corporate and operations strategies
• Operations competitive dimensions
• Process of decision making under- certainty
uncertainty and risk.
 Introduction to POM

• Production is the creation of goods and

services.

• Operations management (OM)is the set of

activities that creates value in the form of
goods and services by transforming inputs into
outputs.
• Services :- In an organization that does not
create a tangible good or product, the
production function may be less obvious. We
often call these activities services .

• Regardless of whether the end product is a

good or service, the production activities that
go on in the organization are often referred to
as operations, or operations management .
• To create goods and services, all organizations
perform three functions.
1.Marketing—
which generates the demand, or at least takes
the order for a product or service
2.Production/operations-
which creates, produces, and delivers the product
3.Finance/accounting ---
which tracks how well the organization is doing,
pays the bills, and collects the money
OM for four reasons

1. How people organize themselves for

productive enterprise
2. How goods and services are produced
3. Understand what operations managers do
4. OM provides a major opportunity for an
organization to improve its profitability and
enhance its service to society
EXAMINING THE OPTIONS FOR INCREASING
CONTRIBUTION

OM OPTION :- Contribution from $10,500 to $22,500. It may now have a bank

willing to lend it additional funds.
 Operations Managers
1. Design of goods and services
2. Managing quality
3. Process strategy
4. Location strategies
5. Layout strategies
6. Human resources
7. Supply-chain management
8. Inventory management
9. Scheduling
10.Maintenance
 Productivity
• The ratio of outputs (goods and services) divided by
one or more inputs (such as labor, capital, or
management).
• Production is the making of goods and services. High
production may imply only that more people are
working and that employment levels are high (low
unemployment), but it does not imply high
productivity .
Most impacted Productivity Variables
1. Labor, which contributes about 10% of the annual increase.
2. Capital, which contributes about 38% of the annual increase.
3. Management, which contributes about 52% of the annual
increase

Productivity of the service sector has proven difficult to improve because service-sector work is:
1. Typically labor intensive (e.g., counseling, teaching).
2. Frequently focused on unique individual attributes or desires (e.g., investment advice).
3. Often an intellectual task performed by professionals (e.g., medical diagnosis).
4. Often difficult to mechanize and automate (e.g., a haircut).
5. Often difficult to evaluate for quality (e.g., performance of a law firm).
Challenges in Operations Management

1. Globalization:
2. Supply-chain partnering:
3. Sustainability:
4. Rapid product development:
5. Mass customization:
6. Lean operations:
• Ethics, Social Responsibility, and Sustainability

◆ Develop and produce safe, high-quality green

products
◆ Train, retain, and motivate employees in a
safe workplace
◆ Honor stakeholder commitments
Asssignments