IE 31 QUIZ 2

• Production


  The process of creating goods and services through a production system
• Production System


  A manufacturing subsystem that combines resources and utilizes various functions to transform inputs into some desired outputs. Its functions include design, production, distribution, & servicing
• Components of a Production System


  • Input
  • Process
  • Output
• Input


  Involves capturing and assembling elements that enter the system to be processed (e.g raw materials, energy, data, human effort)
• Process


  Involves transformation processes that convert input into output (e.g., manufacturing process, service processes, sophisticated calculations)
• Output


  The transformed elements that have been produced by processes to their ultimate form (e.g., finished products, rendered service)
• Categories of Processes


  • Physical
  • Locational
  • Exchange
  • Storage
  • Physiological
  • Informational
• Physical


  Converts raw materials into finished goods (manufacturing industries)
• Locational


  Transportation of an entity from one place to another (transportation services, distribution services)
• Exchange


  Involves retailing, the exchange of a good for money (supermarkets, department stores)
• Storage


  Involves storing of materials prior delivery to consumers or customers (warehousing services)
• Physiological


  Concerned with health care and safety of individuals (health care, grooming, hospitals)
• Informational


  Involves transfer of data, information, or knowledge (telecommunications, information systems, schools)
• Operations Management


  The design, operation, and improvement of systems that create and deliver the firm's primary product in the most efficient (best way of doing things) and effective (achieving goals and objectives) way, while creating value for the product
• Major activities in any organization

  • Finance
  • Marketing
  • Operations
• Management Process


  • Planning
  • Organizing
  • Staffing
  • Leading
  • Controlling
• Planning


  Managers determine objectives and goals for organizations and develop programs, policies, and procedures that will help organizations attain them. They also determine subordinate plans for every department, group, and individual
• Organizing


  Managers develop a structure of individuals, groups, departments, and divisions to achieve objectives
• Staffing


  Managers determine personnel requirements, including the best way to recruit, train, retain, and terminate employees for achieving objectives
• Leading


  Managers lead, supervise, and motivate personnel to achieve objectives
• Controlling


  Managers develop the standards and communication networks necessary to ensure that the enterprise is pursuing appropriate plans and achieving objectives; measures results, evaluates their acceptability, and institutes corrective action if necessary
• Importance of Operations Management

  • OM is one of the three major functions of any organization
  • OM is one of the costliest parts of any organization
  • A business education is incomplete without an understanding of the modern approaches to managing operations
  • OM provides a systematic approach to organizational processes
  • Career opportunities
  • Cross-functional applications
• Areas of Management Decisions

  • Strategic Decisions
  • Tactical Decisions
  • Planning and Control Decisions
• Strategic Decisions


  These are long-term business decisions that impact the company's long-range effectiveness in terms of how it can address customer needs aligned to corporate strategy
• Tactical Decisions


  Also known as an intermediate-term decision, this addresses how to efficiently utilize resources (i.e., schedule material and labor) with constraints to strategic decisions
• Planning and Control Decisions


  These are the short-term decisions that help break down tactical decisions into immediately realizable goals and objectives
• Critical Strategy Related Decisions in OM

  • Product Strategy
  • Process Strategy
  • Location Strategy
  • Layout Strategy
  • Human Resource Strategy
  • Maintenance and Reliability
  • Quality Strategy
  • Production Planning and Control
  • Supply Chain Strategy
• Product Strategy


  Product strategy determines production methods and factors and includes transformation processes, production costs, quality, and human resource decisions
• Process Strategy


  Process options focus on how products are made with continuous improvement of the production process
• Location Strategy


  The location of a firm is the geographical positioning of its operations relative to the input resources and other operations or customers with which it interacts
• Types of Layouts


  • Plant Layout
  • Process Layout
  • Product Layout
  • Group Technology
• Human Resource Strategy


  This refers to the decisions related to the human resources of an organization, which are integral and expensive parts of the total systems design
• Maintenance and Reliability


  These are the decisions aligned with the design and maintenance of systems to achieve its expected performance and quality standard
• Quality Strategy


  These decisions determine the efforts needed to maintain the level of quality desired for operations
• Production Planning and Control


  A critical part of operations wherein decisions about the set of activities that creates value in the form of goods and services by transforming input to output take place
• Supply Chain Strategy


  Supply chain setup decisions integrate procurement, transformation, and delivery activities
• Goods


  A good is the tangible output of a process, a physical presence, a concrete output of manufacturing
• Services


  A service is an intangible output of a process. These are products that cannot be seen or touched but can be felt and appreciated and are provided to customers according to their expectation and satisfaction
• Core Services


  These are the basic services that are essential to the business
• Services are intangible outputs of a process that cannot be seen or touched but can be felt and appreciated and are provided to customers according to their expectation and satisfaction