2. Identify the three major functional areas of business organizations and briefly
describe how they interrelate.
3. Describe the operations function and the nature of the operations manager’s job.
4. Describe each of these systems: craft production, mass production, and lean
production.
CLASS EXERCISE TWO
The Operations Management (OM) is the management function responsible for the
production of the physical goods and the services that a company offers in the market.
Its goal is to achieve simultaneously the objectives of quality, flexibility, costs and
deadlines. Between other activities, OM includes procurement (inbound logistics),
operations that transforms inputs in outputs, quality assurance and distribution
(outbound logistics).
In the framework of the modern OM, it is essential to incorporate new technologies and
use information systems to increase the productivity. It is almost impossible to comply
with company strategy (and the corresponding operations strategy) if there is not an
appropriate monitoring and control system adapted to the company. The main task of
the operations is to produce goods and provide services. In other words, “The profit
generating engine of any company is its operations” (Schroeder et al., 2011).
Accordingly, in developing strategies, companies should pay a great deal of attention to
operations and grant it a suitable operations strategy.
Porter (1980) considers organizational activities as the basis for competitive advantage.
He believes that organizations must select a distinct strategic position. Strategic
positioning in this context refers to performing activities different from competitors or
performing similar activities in a different way. While, in the operations, differentiation is
based on a different competitive priorities Competitive priorities are expressed as
dimensions of manufacturing strategy (Swamidass and Newell, 1987), goals for
manufacturing (Leong et al., 1990) and manufacturing tasks (Skinner, 1969).
Competitive priorities are the basis for developing distinctive capabilities in the
production system (Choudhari et al., 2010). They are the fundamental pillars of the
operations strategy (Martín and Díaz, 2009) and represent an important internal factor
of operations capabilities (Peng et al., 2011).
1. Write a short note on the parameters that affects the Location & Layout of a firm?