Assigned readings 1

• Operations management is the management of the processes that transform inputs into the goods and services that add value for the customer.
• Unless you live on a farm and produced them yourself, the ingredients of your breakfast this morning passed through a number of different processing steps between the farmer and your table and were handled by several different organizations.
• Every day, you use a multitude of physical objects and a variety of services, most of which have been manufactured and provided by people in organizations.
• Just as fish are said to be unaware of the water that surrounds them, most of us give little thought to the organizational processes that produce these goods and services for our use.
• The study of operations deals with how the goods and services that you buy and consume every day are produced.
• A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients.
• Where the inputs are raw materials, it is relatively easy to identify the transformation involved, such as when milk is transformed into cheese or butter.
• Where the inputs are information or people, the nature of the transformation may be less obvious.
• A hospital transforms ill patients (the input) into healthy patients (the output).
• Flexible specialization is a strategy where firms focus on separate parts of the value-adding process and collaborate within networks to produce whole products.
• Macro operations are the overall process within a company’s transformation processes, for example, in a brewery, the macro operation is making beer.
• Mass customisation seeks to combine high volume, as in mass production, with adapting products to meet the requirements of individual customers.
• Operations management is the design, management, and improvement of the systems and processes that create the organization’s goods or services.
• Efficiency is doing things well at the lowest cost possible and reducing activities which add unnecessary costs.
• Effectiveness is making the right actions and plans in order to improve the business and add value for the customer.
• Mass production is the production of goods in high volume with low variety by using standardized parts, a system of scientific management, and assembly lines; it rose in popularity in the 19th century.
• Transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients, for example, milk (input) being transformed into cheese or butter (outputs).
• Lean production focuses on the elimination of all forms of waste from a production system, especially from the perspective of keeping inventory levels down to expose inefficiencies, reduce costs, and cut lead times.
• Micro operations are the detailed transformations that must occur, usually in a specific sequence, for a company to complete their macro operation.
• Agile manufacturing emphasizes the need for an organization to be able to switch frequently from one market-driven objective to another.
• Craft manufacturing is the production of goods in low volume, but with a high degree of variety, performed by skilled, specialized craftspeople to meet the requirements of their individual customers.
• Within large and complex organizations, operations is usually a major functional area, with people specifically designated to take responsibility for managing all or part of the organization’s operations processes.
• Operations management is concerned with the design, management, and improvement of the systems that create the organization’s goods or services.
• Finance ensures that the funds for materials, supplies, payroll and equipment are available when needed.
• Marketing ensures that operations is producing the right product or service in a way that provides customers with all the features or characteristics that they value.
• Human Resources ensures that the correct employees, with the adequate skills and experience are recruited, hired and trained.
• The overall transformation can be described as the macro operation, and the more detailed transformations within this macro operation as micro operations.
• Human Resources is responsible for compensation, collection of income taxes, administration of benefits, succession planning and more.
• A typical organization has four distinct basic functional areas: operations, marketing and sales, finance, and human resources.
• Transformation processes can be categorized into four groups: manufacture (the physical creation of products, e.g. automobiles), service (the treatment of customers or storage of products, e.g. hospitals or warehouses), supply (a change in ownership of goods, e.g. retail), and transport (the movement of materials or customers, e.g. taxi service).
• Operations is the area that is responsible for directly creating the product or service for which the customer will pay.
• The term operations embraces all the activities required to create and deliver an organization’s goods or services to its customers or clients.
• The goal or purpose of most organizations involves the production of goods and/or services, which requires procurement of resources, conversion into outputs, and distribution to intended users.
• The majority of most organizations’ financial and human resources are invested in the activities involved in making products or delivering services, making operations management critical to organizational success.
• Successful companies such as Toyota, Amazon, or Dell, have keys to their success come from innovations to the operations processes of their businesses.
• Operations is the largest department in most organizations in terms of the number of employees.
• In a larger company, jobs in operations are far more plentiful than those in smaller departments.
• Efficiency is different.
• If you have a passion for working for a large organization, you might want to focus more on which organization you go to work for, and less focus on the actual job title.
• A new graduate may be smart to look for a position within the operations of a business.