OM 374 Lecture Notes - Lecture 6: Operations Management, Customer Satisfaction, Quality Assurance
20 May 2018
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Department
Course
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Operations Management
The management of systems or processes that create goods and/or provide services.
*) Convert RM, and Lapro (input) to product either goods or services.
Goods
*) are physical items that include raw materials, parts, subassemblies, and final products.
Example:
1. Automobile
2. Computer
3. Oven
4. Shampoo
Services
*) Activities that provide some combination of time, location, from, and psychological value.
*) Example: Every book you read, every video you watch, every e-mail you send, every telephone
conversation you have, and every medical treatment you receive.
1. Air travel
2. Education
3. Haircut
4. Legal counsel
Supply and Demand
1. The ideal situation for a business organization is to achieve a match of supply and demand.
2. Supply > Demand is wasteful and means lost opportunity.
3. Supply < Demand is costly and possible customer dissatisfaction.
Business organizations have three basic functional areas
*) Finance, Marketing, and Operations.
It doesn't matter whether the business is a retail store, a hospital, a manufacturing firm, a car wash, or
some other type of business; all business organizations have these three basic functions.
find more resources at oneclass.com
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Finance is responsible
for securing financial resources at favorable prices and allocating those resources throughout the
organization, as well as budgeting, analyzing investment proposals, and providing funds for operations
Marketing and Operations
are the primary, or "line," functions.
Marketing is responsible
for assessing consumer wants and needs, and selling and promoting the organization's goods or
services.
Operations is responsible
for producing the goods or providing the services offered by the organization.
*) Operations management is responsible for managing that core.
Supply Chain
A sequence of activities and organizations involved in producing and delivering a good or service.
Supply chain sequences
1. The sequence begins with basic suppliers of raw materials and extends all the way to the final
customer.
2. Facilities might include warehouses, factories, processing centers, offices, distribution centers, and
retail outlets.
3. Functions and activities include forecasting, purchasing, inventory management, information
management, quality assurance, scheduling, production, distribution, delivery, and customer service.
*) Notice that the value of the product increases as it moves through the supply chain.
Supply chains are both external and internal to the organization.
*) The external parts of a supply chain provide raw materials, parts, equipment, supplies, and/or other
inputs to the organization, and they deliver outputs that are goods to the organization's customers.
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find more resources at oneclass.com
*) The internal parts of a supply chain are part of the operations function itself, supplying operations
with parts and materials, performing work on products and/or services, and passing the work on to the
next step in the process.
Input such as
Capital, labor, and information are used to create goods or services
Transformation processes
Converting inputs into outputs.
*) it could be storing, transporting, repairing
Output
Goods or Services
Feedback
To ensure that the desired outputs are obtained, an organization takes measurements at various points
in
the transformation process.
Control
compares them with previously established standards to determine whether corrective action is
needed.
Conversion system
The operations function involves the conversion of inputs into outputs
It is important to note that goods and services often occur jointly.
For example, having the oil changed in your car is a
service, but the oil that is delivered is a good. Similarly, house painting is a service, but the paint is a
good.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
The management of systems or processes that create goods and/or provide services. *) convert rm, and lapro (input) to product either goods or services. *) are physical items that include raw materials, parts, subassemblies, and final products. *) activities that provide some combination of time, location, from, and psychological value. *) example: every book you read, every video you watch, every e-mail you send, every telephone conversation you have, and every medical treatment you receive: air travel, education, haircut, legal counsel. Supply and demand: the ideal situation for a business organization is to achieve a match of supply and demand, supply > demand is wasteful and means lost opportunity, supply < demand is costly and possible customer dissatisfaction. It doesn"t matter whether the business is a retail store, a hospital, a manufacturing firm, a car wash, or some other type of business; all business organizations have these three basic functions.
