Operation Management

Assalamualaikum,

The management of systems or processes that create goods and/or provide services.

OM effects:
- Company's ability to compete
- Nation's ability to compete internationally

Major Functional Areas of Organization

1. Finance
2. Operation
3. Marketing

The Goods-Services Continuum

Manufacturing or Services?

Production of goods- tangible output

Delivery of services - an act

Service job categories:

• Government
• Wholesale/retail
• Financial service
• Healthcare
• Personal services
• Business services
• Education

OM includes:

1. Forecasting
2. Capacity planning
3. Scheduling
4. Managing inventories
5. Assuring quality
6. Motivating and training employees
7. Locating facilities
8. Supply chain management
9. etc.

Types of Operation

 

Reasons Decline in Manufacturing Jobs

1. Productivity - increasing productivity allows companies to maintain or increase their output using fewer workers
2. Outsourcing - some manufacturing work has been outsourced to more productive companies

Challenges of Managing Service

- Service jobs are often less structure than manufacturing job 

- Customer contact is higher

- Worker skill levels are lower

- Service hire many low-skill, entry-level workers

- Employee turnover is higher

- Input variability is higher

- Service performance can be affected by worker's personal factor

Key Decisions of Operation Managers

1. WHAT (resource, amount)

2. WHEN (needed, schedule, ordered)

3. WHERE (work to be done)

4. HOW(design, resources allocated)

5. WHO (to do the work)

Operation Interfaces

Simple Product Supply Chain

Supply Chain: A sequence of activities an organizations involve in producing and delivering a good or services