An
overview
of
operations
manageme
Chapter 1
operations management
The management of processes or systems
that create goods and/or provide services.
It encompasses forecasting, capacity
planning, scheduling and managing
inventories, assuring quality, motivating
employees, deciding where to locate the
facilities and more.
2
Business Organization
✗ Organizations are formed to
pursue goals that are
achieved more effectively by
the concerted efforts of a
group of people than by
individuals working alone.
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Functio
ns Of
Busines
s
Organiz
ation
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PRODUCTION /
1 OPERATIONS
Production and Operation
System - Inputs are
used to obtain finished
goods using one or
more transformation
processes (e.g. storing,
transporting, and
cutting).
2 FINANCE
Comprises of activities related to
securing resources at favorable
prices and allocating those
resources throughout the
organization.
Finance and operations
management personnel
cooperate by exchanging
information and expertise in
activities such as:
1. Budget – must be periodically prepared to plan
financial requirements.
2. Economic analysis of investment proposals –
evaluation of alternative investment in plant and
equipment requires input from both operations and
finance people.
3. Provision of funds – necessary funding of
operations and the amount and timing of funding
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3 MARKETING
- Focus on selling and/or promoting the goods
and services of an organization.
- Responsible for assessing customer wants and
needs.
other functions:
3. Purchasing –
1. Accounting – 2. Management
responsible for
supplies Information
procurement of
information to System (MIS) –
materials,
management on providing
supplies, and
cost of labor, management with
equipment.
materials, and the information it
overhead and needs to effectively
may provide manage.
reposts on items
such as scrap,
downtime and
inventories.
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other functions:
6. Distribution
4. Personnel or 5. Public
– involves
Human Relations –
shipping of
Resources _ responsible for
goods to
concerned with building and
warehouse, retail
recruitment and maintaining a
outlets or final
training of positive image of
consumer.
personnel, labor the organization.
relations, wages
and salaries and
ensuring health
and safety of
employees.
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other functions:
7. Maintenance –
responsible for
general upkeep and
repair of equipment,
building and
grounds, heating and
air-conditioning,
removing toxic
waste.
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tiating
Features
of
Operatio
ns
System:
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I. DEGREE OF
STANDARDIZATION
Standardized Customized
Output - Output -
means that means that the
there is a high product or
degree of service is
uniformity in designed for
goods or specific case or
services. individual. 13
II. Types of operation
The degree of standardized products and the volume of
output of a producer or service influence the way firm
organizes production.
The four Vs of operations:
1. Volume – how many products or services are made by the
operation?
2. Variety – how many different types of products or services
are made by the operation?
3. Variation – how much does the level of demand change
over time?
4. Visibility – how much of the operation’s internal working
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are ‘exposed’ to its customers?
III. PRODUCTION OF
GOODS VERSUS SERVICE
OPERATION
Production of goods - results in a
tangible product.
Service operation - generally
implies an act.
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Formative
assessment
Create a simple
production system
at home. Show the
input, process, and
output.
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Than
ks!
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