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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 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 Why Study Operations Management? What is a Transformation Process?Defined A transformation process is defined as a user of resources to transform inputs into some desired outputs Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications 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?) OM in the Organization Chart Core services are basic things that customers want from products they purchase Core Services Performance Objectives Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way Value-Added Service Categories 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. Historical Development of OM JIT and TQC Manufacturing Strategy Paradigm Service Quality and Productivity Total Quality Management and Quality Certification Historical Development of OM (cont’d) Business Process Reengineering Supply Chain Management Electronic Commerce 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 Current Issues in OM (cont’d) Managing the customers
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