Learning Objectives
   • Define the terms operations management and supply chain
   • Identify 3 major functional areas of organizations and describe 
    how they interrelate
   • Identify similarities and differences between production and 
    service operations
   • Explain the key aspects of operations management decision 
    making
   • Describe the operations function and the nature of the 
    operations manager’s job
   • Describe current issues in business that impact operations 
    management
   What Is “Operations Management”
          ABC News: “Inside Amazon: Secrets of an Online Mega-Giant”
       Operations Management
   • What is operation?
    –The part of a business organization that is 
     responsible for producing goods or services.
   • What is operation management?
    –The management of systems or processes that 
     create goods and/or provide services.
         The 3 Basic Functions of Business 
                   Organizations
                   Organization
                    Organization
       Marketing    Operations    Finance
        Marketing    Operations    Finance
                    Operations Function
                                  Value-Added
         Inputs                Transformation/           Outputs
       Inputs                Transformation/            Outputs
         •                                               •
       •  Land                   Conversion             • Goods
        Land                                            Goods
         •                     Conversion                •
       •  Labor                    Process              • Services
        Labor                                           Services
         •
       •  Capital                Process
        Capital
         •
       •  Materials
        Materials
         •
       •  Information
        Information
                                         Measurement
                                         and Feedback
                Measurement                         Measurement
                and Feedback        Control         and Feedback
                                  Control
           Feedback = measurements taken at various points in the transformation process
        Control = The comparison of feedback against previously established standards to 
        determine if corrective action is needed.