GMS 401 chapter 1

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School
Toronto Metropolitan University **We aren't endorsed by this school
Course
GMS 401
Subject
Business
Date
Oct 20, 2023
Pages
19
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GMS 401 Chapter 1 Nicole Lemelev The challenge of operations Management What is operations management? LO1 - Define operations management Operations management (OM) is a discipline that applies to restaurants like Hard Rock Café as well as to factories like Ford and Whirlpool The techniques of OM apply throughout the world to virtually all productive enterprises o The efficient production of goods and services requires effective application of the concepts, tools, and techniques of OM Production - is the creation of goods and services Operations Management (OM) - is the set of activities that creates value in the form of goods and services by transforming inputs into outputs o Activities creating goods and services take place in all organization o In manufacturing firms, the production activities that create goods are usually quite obvious In them we can see the creation of a tangible product such as a Harley-David- son motorcycle In an organization that does not create a tangible good or product, the production function may be less obvious, we often call these activities services o The services may be hidden from the public and even the customer o The product may take such forms as the transfer of funds from a savings account to a chequing account Organizing to produce goods and services To create goods and services, all organization perform three function which are: o 1. Marketing, which generates the demand until there is a sale o 2. Production/operation, which creates, produces, and delivers the product o 3. Finance/accounting which tracks how well the organization is doing, pays the bills, and collects the money Through the three functions - marketing, operations, and finance - value for the customer is created o However firms seldom create this value by themselves o Instead they rely on a variety of suppliers who provide everything from raw materials to accounting services o These suppliers when taken together can be thought of as a supply chain Supply chain - a global network of organizations and activities that supplies a firm with goods and services Why study operations management? We study OM for four reasons: 1. OM is one of the three major functions of any organization and it is integrally related to all the other business functions
a. All organizations market (sell), finance (account), and produce (operate), and it is important to know how the OM activity functions i. Therefore we study how people organize themselves for productive enterprise 2. We study OM because we want to know how goods and services are produced a. The production function is the segment of our society that creates the products and services we use 3. We study OM to understand what operations managers do a. Understanding OM will help you explore the numerous and lucrative career opportunities in the field 4. We study OM because it is such a costly part of an organization a. A large percentage of most firms is spent in the OM function b. OM provides a major opportunity for an organization to improve its profitability and enhance its service to society What operations managers do? All good managers perform the basic functions of the management process o The management process consists of planning, organizing, staffing, leading, and controlling o Operations management apply this management process to the decision they make in the OM function The 10 major decisions of OM are shown in the chart below Successfully addressing each of these decisions requires planning, organizing, staffing, leading, and controlling
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