Operations Management MRK 253 Chapter 1 Introduction to

Operations Management MRK – 253

Chapter 1: Introduction to Operations Management Definition: Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services. Operation management (OM) is the business function that plans, organizes, coordinates, and controls the resources needed to produce company’s goods and services.

Operations Management Model Input resources Transformation process Output Goods Services

Importance of Operations Management All organizations are engaged in production of products or services that take final shape through a transformation process which is called operations function therefore, operations management is important to all types of organization. All managers are operations managers because all managers manage processes to produce outputs.

Types of Input Resources 1. Transformed Resources Raw materials - if operation is to produce products. For example, producing furniture, cement etc. They all need raw materials which are transformed to take the final shape. Information - if operation is to produce service. For example a legal consultancy, accounting service etc. Customers – if operation is to produce service for individuals. For example health care, transporting passengers.

Types of Input Resources Transformed Resources Facilities – Something that permits the easier performance of an action. For example: Factory to produce products, Hospitals to provide health care and service shop or office for providing care to individuals. Human Resource – Staff members are required in all types of operations who help all operations to run smoothly.

Types of Business Functions 1. Core functions – ◦ Finance ◦ Marketing and ◦ Operations : manages people, equipment, technology, materials and information to produce goods and/or services 2. Support Functions – ◦ Accounting ◦ Purchasing ◦ Human Resource Management

Activities of Operations Management Operations management is responsible for orchestrating all the resources needed to produce the final product. This includes: Designing the product Deciding what resources are needed Arranging schedules, equipment, and facilities Managing the inventory Controlling the quality Designing the jobs to make the product and Designing work methods

Objectives of Operations Management Operations management is mainly concerned with the flow of resources between the operations with the main objectives of: Implementing business strategy Providing support to business strategy Driver of business strategy – Giving business a long term competitive advantage Produce product/service better Produce product/service faster Produce product/service on time Produce product/service with greater variety