MAN 3504 Chapter Notes - Chapter 1: Mass Customization, Factors Of Production, Total Factor Productivity

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5 Oct 2017
Service Ops Mgmt Notes 1!
Production - the creation of goods and services !
Operations Management (OM) - the set of activities that creates value in the form of goods
and services by transforming inputs into outputs!
To create goods and services, all organizations perform three functions: !
1. Marketing, which generates the demand, or at least takes the order for a product or service
(nothing happens until there is a sale)!
2. Production/operations, which creates, produces, and delivers the product!
3. Finance/accounting, which tracks how well the organization is doing, pays the bills, and
collects the money. !
-Firms rely on a variety of suppliers who provide everything from raw materials to accounting
services (supply chain) !
Supply chain - a global network of organizations and activities that supply a firm with goods
and services !
-Competition in the 21st century is not between companies; it is between supply chains. !
Why do we study OM? !
1. OM is one of the three major functions of any organization !
2. We want to know how goods and services are produced!
3. We want to understand what operations managers do. !
4. Because it is such a costly part of an organization. !
Management process:!
-Organizing !
-Controlling !
Characteristics of Services!
-Intangible !
-Produced and consumed simultaneously !
-Unique !
-High customer interaction !
-Inconsistent product definition !
-Often knowledge based !
-Services dispersed !
-Quality may be hard to evaluate !
-Reselling is unusual !
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