ISDS 3001 CH 1 Flashcards
Production
Creation of goods and services
Operations Management
Set of activities creates in the form of goods and services by transforming inputs into outputs
The 3 functions all organizations must perform
1) marketing 2) production/ operations 3) Finance/ Accounting
Marketing function:
Generates the demand, or at least takes the order for a product or service
Production/ Operations Function:
creates, produces and delivers the product
Finance/ Accounting Function:
Tracks how well the organization is doing, pays the bills and collects money
Supply Chain
Global network of organizations and activities that supplies a firm with good and services
Study Operations management for 4 reasons
1) How people organize themselves for productive enterprise
2) How goods and services are produced
3) understand what operations managers do
4) because its such an important part of an org
Qualities of services are:
intangible, unique, have high customer interaction, inconsistent product definition, often knowledge based
Qualities of goods are:
tangible, can usually be kept in inventory, similar products produced, have limited customer involvement, product standardization, standard tangible product tends to make automation possible
productivity:
ratio of outputs (goods and services) divided by 1+ inputs
Improving productivity improves what?
Efficiency
Improvement of productivity can be done these 2 way:
1) reducing inputs while keeping output constant
2) increasing output while keeping inputs constant
Production:
making of goods and services
Increased productivity implies what?
More people are working and employment levels are high (low unemployment), but does NOT imply high productivity
Single factor productivity:
indicates the ratio of good and services produced (outputs) to 1 resource (input)
Multi factor productivity
indicates the ratio of outputs to many or all inputs (aka total factor productivity)
Measurement problems:
1) quality- may change while quantity of inputs and outputs remains constant
2) external elements- may cause an increase/ decrease in productivity for which the system under study may not be directly responsible
3) precise units of measure- may be lacking
Productivity variables:
1) labor
2) capital
3) management
3 key variables for increasing labor productivity
1) basic education appropriate for an effective labor force
2) diet of the labor force
3) social overhead that makes labor available, such as transportation and sanitation
Affects of capital on productivity
inflation and taxes increase the cost of capital, making them increase expenses; when capital invested per employee drops, can expect a drop in productivity
Affects of management on productivity
Responsible for ensuring that labor and capital are effectively used to increase productivity; accounts for over half of annual increase in productivity; knowledge societies
Knowledge societies
society in which much of the labor force has migrated from manual work to work based on knowledge
Difficulties of productivity in the service sector:
1) typically labor intensive
2) frequently focused on unique individual attributes or desires
3) often intellectual task performed by professionals
4) often difficult to mechanize and automatic
5) often difficult to evaluate for quality
Current challenges in operations management
globalization, supply chain partnering, sustainability, rapid product development, mass customization, lean operations,
globalization:
rapid decrease in cost of communication/ transportation has made markets global
supply chain partnering:
shorter product life cycle, demanding customers, and fast changes in tech, materials and processes require supply chain partners to be in tune with the needs of end users
sustainability:
battle to improve productivity is concerned with designing products and processes that are eco sustainable
rapid product development:
technology is chopping away at the life span of products; OM answers with new management structures, enhanced collaboration, digital technology and creative alliances that are responsive
mass communication:
world is the marketplace; OM must rapidly respond with product designs and flexible production processes that cater to individual whims of customers
