introduction to opportunity entrepreneurs

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Chapter 1
Introduction to the Field

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 Operations Management
 Why Study Operations Management?
 Transformation Processes Defined
 Operations as a Service
 The Importance of Operations
Management
 Historical Development of OM
 Current Issues in OM
OBJECTIVES

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What is Operations Management?
Defined
Operations management (OM) is
defined as the design, operation,
and improvement of the systems
that create and deliver the firm’s
primary products and services

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Why Study Operations
Management?
Business Education
Systematic Approach
to Org. Processes
Career Opportunities
Cross-Functional
Applications
Operations
Management

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What is a Transformation
Process?
Defined
A transformation process is defined
as a user of resources to transform
inputs into some desired outputs

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Transformations
 Physical--manufacturing
 Locational--transportation
 Exchange--retailing
 Storage--warehousing
 Physiological--health care
 Informational--telecommunications

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What is a Service and What is a
Good?
 “If you drop it on your foot, it won’t
hurt you.” (Good or service?)
 “Services never include goods and
goods never include services.” (True
or false?)

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OM in the Organization Chart
Operations
Plant
Manager
Operations
Manager
Director
Manufacturing, Production control,
Quality assurance, Engineering,
Purchasing, Maintenance, etc
Finance Marketing

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Core services are basic things
that customers want from
products they purchase
Core Services
Defined

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Core Services Performance Objectives
Operations
Managemen
t
Flexibility
Quality
Speed
Price (or cost
Reduction)

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Value-added services
differentiate the organization
from competitors and build
relationships that bind
customers to the firm in a
positive way
Value-Added Services
Defined

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Value-Added Service Categories
Operations
Management
Information
Problem Solving
Sales Support
Field Support

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The Importance of Operations
Management
Synergies must exist with other
functional areas of the
organization
Operations account for 60-80%
of the direct expenses that
burden a firms profit.

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Historical Development of OM
 JIT and TQC
 Manufacturing Strategy Paradigm
 Service Quality and Productivity
 Total Quality Management and Quality
Certification

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Historical Development of OM
(cont’d)
 Business Process Reengineering
 Supply Chain Management
 Electronic Commerce

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Current Issues in OM
 Coordinate the relationships between
mutually supportive but separate
organizations.
 Optimizing global supplier, production,
and distribution networks.
 Increased co-production of goods and
services

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Current Issues in OM (cont’d)
 Managing the customers
experience during the service
encounter
 Raising the awareness of
operations as a significant
competitive weapon

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End of Chapter 1