What Is Operations Management?What Is Operations Management?

ProductionProduction is the creation of goods is the creation of goods and servicesand services

Operations managementOperations management is the set is the set of activities that creates value in of activities that creates value in

the form of goods and services by the form of goods and services by transforming inputs into outputstransforming inputs into outputs

Organizing to Produce Goods and ServicesOrganizing to Produce Goods and Services

Organizing to Produce Goods and Organizing to Produce Goods and ServicesServices

Essential functions:Essential functions:– Marketing – generates demandMarketing – generates demand– Operations –creates the productOperations –creates the product– Finance/accounting – tracks organizational Finance/accounting – tracks organizational

performance, pays bills, collects moneyperformance, pays bills, collects money

Organizational FunctionsOrganizational Functions

MarketingMarketing– Gets customersGets customers

OperationsOperations– creates product or servicecreates product or service

Finance/AccountingFinance/Accounting– Obtains fundsObtains funds– Tracks moneyTracks money

© 1995 Corel Corp.

Sample Organization ChartSample Organization Chartss

Functions - BankFunctions - Bank

Operations Finance/Accounting

Marketing

CheckClearing

TellerScheduling

Transactions

ProcessingSecurity

Commercial Bank© 1984-1994 T/Maker Co.

Functions - AirlineFunctions - Airline

Operations Finance/Accounting

Marketing

GroundSupport

FlightOperations

FacilityMaintenance

Catering

Airline© 1984-1994 T/Maker Co.

Functions - ManufacturerFunctions - Manufacturer

Operations Finance/Accounting

Marketing

ProductionControl

Manufacturing QualityControl

Purchasing

Manufacturing

Organizational Charts

Commercial Bank

OperationsTeller SchedulingCheck ClearingTransactions processingFacilities design/layoutVault operationsMaintenanceSecurity

FinanceInvestmentsSecurityReal Estate

Accounting

Auditing

MarketingLoans Commercial Industrial Financial Personal Mortgage

Trust Department

Organizational ChartsAirline

OperationsGround support equipmentMaintenanceGround Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications DispatchingManagement science

Finance & Accounting

AccountingPayablesReceivablesGeneral LedgerFinanceCash controlInternational exchange rates

MarketingTraffic administrationReservationsSchedulesTariffs (pricing)SalesAdvertising

Organizational ChartsManufacturing

OperationsFacilities: Construction:maintenanceProduction & inventory control Scheduling: materials control

Supply-chain managementManufacturing Tooling, fabrication,assemblyDesign Product development and design Detailed product specificationsIndustrial engineering Efficient use of machines, space, and personnelProcess analysis Development and installation of production tools and equipment

Finance & AccountingDisbursements/credits Receivables Payables General ledgerFunds Management Money market International exchangeCapital requirements Stock issue Bond issues and recall

MarketingSales promotionsAdvertisingSalesMarket research