OM-Chapter 1 Flashcards
Objective management
Operations management
Can be defined as the management of processes exploited to conceive, deliver, create and distribute goods and services to customers that are value adding
Importance of OM
-Coordination of operational aspects across functional areas
-Coordination of external processes such as suppliers and distributors
-Improve decision making at strategic level
-Value added-order qualifier
-Unique characteristics
Scope of OM
Shift from manufacturing to service-oriented industry-creating ,operation and continuous improvement of the process and procedures that produce and provide principal products/services
Major principles
-All work undertaken can be classified as a process or a sub process
-Each process utilized by an organization can be improved
-The resultant improvements must ensure that the org’s processes are effective, efficient, low cost and more robust
Levels in OM
Strategic (long-term)
Tactical (medium term)
Operational planning and control(short-term)
8Ms
Money
Materials
Machines
Management
Manpower
Methods
Messages
Markets
Characteristics of OM 4Vs
-Volume of completed products that is produced in time
-Variety or span of diversity of goods and services that is produced
-Variation in demand for products or services is the demand for a specific no of the product/service
Variability in the product or service
Operational strategy
Involves decisions about the customer and their requirements and continuous assessments of customer need satisfaction
Strategic decision
Strategic decision-making areas
-Certainty in decision environment
-Price decisions
-Degree of intricacy
-Time horizons
-Activity span
Operational and tactical planning decisions
Collaboration with functional area-inputs in system, resource exploitation and production processes
Decisions in five major areas
-Plan
-Supply
-Create
-Provide
-Send back
Servitization
A transformation process wherein production organizations embrace a service orientation and/or develop more and better services
aim to:
-Satisfy customer needs
-Enhance the organization’s performance
-Achieve competitive advantage
Three major reasons for servitization
-Elimination of active competitors
-Guaranteeing a market
-Increasing differentiation in product offerings
OEM
Original equipment manufactures
The three modes of operations management
Primary
-Sourcing of raw materials
Secondary
-Production of goods
Tertiary
-Services only
Finance function
-Budget setting
-Selling goods and services
-Loan from banks
Market function
-Sales is the major objective
-Determining what customers want
-Communicate these wants to the operations department
-Valuable source of info regarding competitors
-Marketing ,design and operations work together to make new products
