Operations management is the business function responsible for planning, coordinating, and controlling resources needed to produce products and services. It transforms inputs like people, materials, and money into outputs of goods and services. The goal is to add value at each stage and provide an efficient transformation process at the lowest possible cost. Both manufacturing and service organizations have operations management functions that deal with issues like quality, demand forecasting, capacity, layout, staffing, and customers.

1. Introduction to
Operations
Management
Operations Management
by
Ken Hogan
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2. Operations Management is:
The business function responsible for planning,
coordinating, and controlling the resources
needed to produce products and services for a
company
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3. Operations Management is:
A management function
An organization’s core function
In every organization whether Service or
Manufacturing, profit or Not for profit
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4. Typical Organization Chart
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5. What is Role of OM?
OM Transforms inputs to outputs
Inputs are resources such as
People, Material, and Money
Outputs are goods and services
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6. OM’s Transformation Process
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7. OM’s Transformation Role
To add value
Increase product value at each stage
Value added is the net increase between output
product value and input material value
Provide an efficient transformation
Efficiency – means performing activities well for least
possible cost
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8. Goods & Services
Manufacturing Services
Tangible product Intangible product
Product can be Product cannot be
inventoried inventoried
Low customer contact High customer contact
Longer response time Short response time
Capital intensive Labor intensive 8
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9. On the other hand…
Both use technology
Both have quality, productivity, & response issues
Both must forecast demand
Both will have capacity, layout, and location issues
Both have customers, suppliers, scheduling and
staffing issues
Manufacturing often provides services
Services often provides tangible goods 9
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