Gms 401 Chapter 1
GMS 401 – Chapter 1
- Operations management – the management of processes or systems that create goods and/or services o System is a set of interrelated parts that must work together
- Process – a series of linked actions, changes, or functions bringing about a result o 3 types of process:
• Core process – (or operational) processes directly create goods and/or services
• Support processes – support core processes
• Marginal processes – govern the system
- Efficiency – operating at minimum cost
- Effectiveness – achieving quality and responsiveness
- A large percentage of a company’s expenses occur in the operations area -> small operation cuts can result in huge profits
- Large numbers of management jobs are in operations management such as purchasing, quality assurance, production planning and control, scheduling, logistics, inventory management, ect.
- Activities in all other areas of business organizations are all interrelated
Functions with Organizations
- Typical organization has 3 basic functions: Operations, Finance and Marketing. o Functions must interact to achieve the goals and objectives of the organization and each makes an important contribution
Operations Function
- Preforms all the activities directly related to producing goods or producing services
- Core of most organizations
- Responsible for the creation of an organizations goods and services
- The essence of the operations function is to add value during the transformation process o Transformation/conversion process – inputs are used to obtain finished goods or services o Feedback – to ensure that the desired output s are obtained
- Value added – the difference between the cost of inputs and the value of the price output
Finance
- Preforms activities related to securing resources at favorable prices and allocating those resources throughout the organization
- Finance and operations cooperate by exchanging info such as: o Provision of funds-
- Operations management – the management of processes or systems that create goods and/or services o System is a set of interrelated parts that must work together
- Process – a series of linked actions, changes, or functions bringing about a result o 3 types of process:
• Core process – (or operational) processes directly create goods and/or services
• Support processes – support core processes
• Marginal processes – govern the system
- Efficiency – operating at minimum cost
- Effectiveness – achieving quality and responsiveness
- A large percentage of a company’s expenses occur in the operations area -> small operation cuts can result in huge profits
- Large numbers of management jobs are in operations management such as purchasing, quality assurance, production planning and control, scheduling, logistics, inventory management, ect.
- Activities in all other areas of business organizations are all interrelated
Functions with Organizations
- Typical organization has 3 basic functions: Operations, Finance and Marketing. o Functions must interact to achieve the goals and objectives of the organization and each makes an important contribution
Operations Function
- Preforms all the activities directly related to producing goods or producing services
- Core of most organizations
- Responsible for the creation of an organizations goods and services
- The essence of the operations function is to add value during the transformation process o Transformation/conversion process – inputs are used to obtain finished goods or services o Feedback – to ensure that the desired output s are obtained
- Value added – the difference between the cost of inputs and the value of the price output
Finance
- Preforms activities related to securing resources at favorable prices and allocating those resources throughout the organization
- Finance and operations cooperate by exchanging info such as: o Provision of funds-