operations management

• Operations= processes that either provide services or create goods.
• Goods= Physical items produced by business organizations.
• Services= Activities that provide some combination of time, location, form, and psychological value.
• The ideal situation for a business organization is to achieve an economic match of supply and demand.
• Having excess supply or excess capacity is wasteful and costly; having too little means lost opportunity and possible customer dissatisfaction.
• The key functions on the supply side are operations and supply chains, and sales and marketing on the demand side.
• Business organizations have Three Basic Functional Areas

  
  

  Finance

  Operations

  Marketing
• Finance= responsible for securing financial resources at favorable prices and allocating those resources throughout the organization, as well as budgeting, analyzing investment proposals, and providing funds for operations.
• Marketing= responsible for assessing consumer wants and needs, and selling and promoting the organization's goods or services.
• Operations= responsible for producing the goods or providing the services offered by the organization.
• Operations Management=The management of systems or processes that create goods and/or provide services.
• Supply chain=A sequence of organizations- their facilities, functions, and activities-that are involved in producing and delivering a product or service.
• The sequence begins with basic suppliers of raw materials and extends all the way to the final customer.
• PRODUCT SUPPLY CHAIN

  1. raw material
  2. supplier
  3. manufacturer
  4. distributor/wholesale supplier
  5. retailer
  6. customer
• Raw material= a substance that we get directly from nature.
• raw materials can be classified into three groups

  1. animal based raw materials
  2. vegetable based raw materials
  3. mineral based raw materials
• Processed materials= material that has been prepared and is available for making other products.
• Finished products= an object made by human being to satisfy a need to improve his/her quality of life
• The Supply Chain View

  1. source
  2. make
  3. deliver
  4. buy
• Logistics= overall of managing how resources are acquired, stored, and transported to a final destination.
• Logistics management =is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organization and its marketing channels in such as way that current and future profitability are maximized through the cost-effective fulfillment of orders.
• Procurement =the act of obtaining goods or services, typically for business purposes. Procurement is most commonly associated with businesses because companies need to solicit services or purchase goods, usually on a relatively large scale.
• Value added= The difference between the cost of inputs and the value or price of outputs. The essence of the operations function is to add value during the transformation process
• Value added is the term used to describe the difference between the cost of inputs and the value or price of outputs.
• Various inputs such as capital, labor, and information are used to create goods or services using one or more transformation processes (e.g., storing, transporting, repairing).
• Feedback=measurement taken at various points in the transformation process.
• Control= the comparison feedback against previously established standards to determine of corrective to determine if corrective action is needed.
• POINTS OF COMPARISON TO CONSIDER: GOODS VS. SERVICE

  1. Degree of customer contact
  2. Labor content of jobs
  3. Uniformly of inputs
  4. Measurement of productivity
  5. Quality assurance
  6. Inventory
  7. Wages
  8. Ability to patent
• WHY LEARN ABOUT OPERATIONS MANAGEMENT? Finance and operations management personnel cooperate by exchanging information and expertise in such activities as budgeting, economic analysis of investment proposals, and provision of funds.
• MIS=Management Information Systems
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Forecasting= This component pertains to the process of relying on historical data, facts, figures, and statistics to make decisions for production. Proper forecasting is necessary to know how much of a specific product should be produced. This will allow your facility to only produce what is needed to avoid being stuck with excess inventory or have too many shortages.
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Location Strategies= This component of operations management involves selecting the right location for your organization.
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Purchasing=This component pertains to ensuring that you have enough raw materials to supply the incoming demands for products.
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Scheduling=This component of operations management involves assigning jobs or operations to the right machine or labor resource.
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Total Quality Management =is a strategy that is used to create a customer-focused organization and involves improving all employees and activities of the company to meet customer requirements.
• 12 MAIN COMPONENTS OF OPERATIONS MANAGEMENT

  Materials Requirements Planning= This component ensures that you are receiving the right amount of the right material on time to be able to complete your production on time.