Operations management Flashcards
Production system
Transforms input to output.
A complex open system that transforms resources of various kinds into goods and services that are of value to customers that allows for a margin.
To-be-transformed resources
Raw materials, passengers, information(survey data).
Transforming resources
Capital, equipment, labour, information.
Transformed resources
What comes out of a production process and is given to customers. E.g. goods or services
Goods
-Tangible
-Usually storable
-Usually transportable
Services
-Intangible
-Less easy to store, or even non-storable
-Less easy to transport, or even non-transportable
Goods vs services: nature of production process
In a service system the customer is often directly involved in the production process. The production of the service takes place simultaneously with its delivery to the customer.
Problems in service systems
Capacity management and quality management are more problematic.
Customers are also not willing to just comply making things more difficult.
Servitization
A business model that involves shifting a company’s focus from selling products to providing a combination of products and services.
Service economy
An economic system that focuses on providing services to consumers and businesses instead of producing goods
Customer value
Percieved value a customer gets from consuming a product. Can be affected by cost etc
Why is enhancing customer value a critical focus in operations management?
It directly impacts customer satisfaction, loyalty, and business success.
Efficiency in operations management
Producing goods or services using the least amount of resources (such as time, money, materials, and labor) while still achieving the desired output.
Sustainable practices
Aim to minimize waste, reduce environmental impact, and use resources efficiently (e.g., energy, water, and raw materials).
Trade-offs
A trade-off exists if when substituing one thing for another to achieve a higher efficiency for the one thing. E.g. sacraficing variety to increase cost.
