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What is operations?

• What is operations?
• The part of a business organization that is responsible for producing goods or services
• How can we define operations management?
• The management of systems or processes that create goods and/or provide services

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• Goods are physical items that include raw materials, parts, subassemblies, and final products.
• Automobile
• Computer
• Oven
• Shampoo

• Services are activities that provide some combination of time, location, form or psychological value.
• Air travel
• Education
• Haircut
• Legal counsel

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• Suppliers’
• suppliers

• Direct
• suppliers

• Producer

• Distributor

• Final
• Customers

• Supply Chain – a sequence of activities and organizations involved in producing and delivering a good or service

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• Operations

• Finance

• Marketing

• Organization

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• Inputs
• Land
• Labor
• Capital
• Information

• Outputs
• Goods
• Services

• Transformation/
• Conversion
• Process

• Control

• Measurement
• and Feedback

• Measurement
• and Feedback

• Measurement
• and Feedback

• Value-Added

• Feedback = measurements taken at various points in the transformation process

• Control = The comparison of feedback against previously established standards to determine if corrective action is needed.

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• Automobile Assembly, Steelmaking

• Products are typically neither purely service- or purely goods-based.

• Goods Services

• Home Remodeling, Retail Sales

• Computer Repair, Restaurant Meal

• Songwriting, Software Development

• Surgery, Teaching

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• Tangible

• Act-Oriented

• Goods

• Services

• Manufacturing and Service Organizations differ chiefly because manufacturing is goods-oriented and service is act-oriented.

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Degree of customer contact

• Degree of customer contact
• Uniformity of input
• Labor content of jobs
• Uniformity of output
• Measurement of productivity
• Production and delivery
• Quality assurance
• Amount of inventory
• Evaluation of work
• Ability to patent design

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Jobs in services are often less structured than in manufacturing

• Jobs in services are often less structured than in manufacturing
• Customer contact is generally much higher in services compared to manufacturing
• In many services, worker skill levels are low compared to those of manufacturing employees
• Services are adding many new workers in low-skill, entry-level positions
• Employee turnover is high in services, especially in low-skill jobs
• Input variability tends to be higher in many service environments than in manufacturing
• Service performance can be adversely affected by many factors outside of the manager’s control (e.g., employee and customer attitudes)

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• Process - one or more actions that transform inputs into outputs

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• Operations &
• Supply Chains

• Sales & Marketing

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• Variations can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems.

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