Amity Business School

08/12/2011

Amity Business School

What Is Operations Management?

Production is the creation of goods
and services, and
Operations management (OM) is
the set of activities that
creates value in the form of
goods and services by
transforming inputs into outputs

Amity Business School

The Role of Operations

Management
The role of operations management is to manage
the transformation of an organisations inputs
into finished goods and services

Amity Business School

What is Operations Management?

Defined (Contd.)
Operations management (OM) is
defined as the design, operation,
and improvement of the systems
that create and deliver the firms
primary products and services

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The Importance of Operations Management

Synergies must exist with other

functional areas of the
organization
Operations account for 60-80%
of the direct expenses that
burden a firms profit.

SS Pal/Ent-OM-1

Amity Business School

08/12/2011

Amity Business School

What Operations and Supply Chain

Managers Do
What is Operations Management?

design, operation, and improvement of productive systems

What is Operations?

a function or system that transforms inputs into outputs of

greater value

What is a Transformation Process?

a series of activities along a value chain extending from

supplier to customer
activities that do not add value are superfluous and should be
eliminated

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Organizing to Produce Goods and Services

Essential functions:
Marketing generates demand
Production/operations creates the
product
Finance/accounting tracks how well
the organization is doing, pays bills,
collects the money

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What is a Transformation
Process?
Defined

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A transformation process is defined

as a user of resources to transform
inputs into some desired outputs

Transformation
Process

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Physical: as in manufacturing operations

Locational: as in transportation or
warehouse operations
Exchange: as in retail operations
Storage: as in warehousing
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication
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SS Pal/Ent-OM-1

Amity Business School

08/12/2011

Amity Business School

Operations as a
Transformation Process
INPUT
Material
Machines
Labor
Management
Capital

OUTPUT
Goods
Services

TRANSFORMATION
PROCESS

Amity Business School

The two main types of transforming

resources are:
Facilities, such as building, equipment and
process technology.
Staff, all the people involved in the operations
process. In services the customer may well be
involved as a transforming resource.

Feedback & Requirements

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Amity Business School

The three main types of transformed resource

are:
Materials, these can be transformed either physically
(e.g. manufacturing), by location (e.g. transportation),
by ownership (e.g. retail) or by storage (e.g.
warehousing),
Information, this can be transformed by property (e.g.
accountants), by possession (e.g. market research), by
storage (e.g. libraries), or by location (e.g.
telecommunications),
Customers, they can be transformed either physically
(hairdresser), by storage (e.g. hotels), by location (e.g.
airlines), by physiological state (e.g. hospitals), or by
psychological state (e.g. entertainment).

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Amity Business School

What is a Service and What is a

Good?
If you drop it on your foot, it wont
hurt you. (Good or service?)

Services never include goods and

goods never include services. (True
or false?)

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