Chapter 1: Producing Goods & Services Operations Management (only to
• Service operations: Production activities that yield intangible services.
• Goods production: production activities that yield tangible products.
Why it’s called “operation”
• (Production 生生 生生 Operation 生生 生生)
• “Production” implies that Canadian businesses make “products”, in fact,
80% of Canadians work in “services”
• 70% Canadian GDP by services
• Bankers, doctors, lawyers, and professors don’t make products. They
provide ideas, analysis, and information. But, these things still need to be
planned, managed, and supplied. Thus, = “operations”
• Special issues
o Services cannot ne stored 生生 生生 ->Products (it’s a thing!) can be
o Services involve the customer -> products can be made without
o Services are customized -> product should all be the same
Creating value through production
• Operations (production) management
o Textbook: The systematic direction and control of the processes
that transform resources into finished goods and service.
o Professor: the management of the creation of goods and services,
using the factors of production
o A business must give its customers what it claims to offer, or else,
they will never come back
• Production (operations) managers
o Managers responsible for ensuring that operations processes
create value and provide benefits.
o They make things, or make things happen
Operations processes: A set of methods and technologies used in the
production of a good or a service.
• Good (product)- producing process
o Analytic process: any production process in which resources are
o Synthetic process: any production process in which resources are
• Services-producing process
o High-contact process: a services in which in the services cannot