transformation process
WHAT IS OPERATIONS MANAGEMENT?
Production: The creation of goods and services
Operations Management: The set of activities that creates value in the form of goods and services by transforming inputs into outputs.
Operations management is one of three main business functions involved in the creation of goods and services (i.e., Operations Function, Marketing Function, Finance/Accounting Function). These functions all interact and share information with one another, as the diagram on the following page indicates.
ROLES AND NTERACTIONS OF THE MAIN BUSINESS FUNCTIONS
SIMPLIFIED VIEW OF THE CREATION OF A GOOD OR SERVICE
What is not apparent in this simple diagram is the wide diversity of inputs, transformation process, and outputs, as indicated on the following page.
TYPES OF INPUTS, TRANSFORMATIONS, AND OUTPUTS
INPUTS
TRANSFORMATIONS
OUTPUTS
Materials
Raw Materials Purchased Parts Supplies Energy
People
Workers Technicians Supervisors Managers Maintenance Custodial
Equipment
Land Buildings Machines Tools Office Equipment Computers
Physical
Locational
Storage
Exchange
Informational
Educational
Attitudinal
Physiological
Products
Services
TRANSFORMATION EXAMPLES: Physical or Chemical – Manufacturing, chemical processing, oil refining, etc. Locational – Airline companies, trucking companies, package delivery services. Storage – Warehousing operations, banks. Exchange – Wholesale and retail operations. Informational – T.V. news departments, newspapers, computer information services Educational – Schools, colleges, universities. Attitudinal – Entertainment industry, movie companies, theme parks. Physiological – Hospitals and healthcare institutions.
BASIC PRODUCTIVITY EQUATION
A fundamental principle of the transformation process is that value should be added during the transformation process. In that way the value of the
Production: The creation of goods and services
Operations Management: The set of activities that creates value in the form of goods and services by transforming inputs into outputs.
Operations management is one of three main business functions involved in the creation of goods and services (i.e., Operations Function, Marketing Function, Finance/Accounting Function). These functions all interact and share information with one another, as the diagram on the following page indicates.
ROLES AND NTERACTIONS OF THE MAIN BUSINESS FUNCTIONS
SIMPLIFIED VIEW OF THE CREATION OF A GOOD OR SERVICE
What is not apparent in this simple diagram is the wide diversity of inputs, transformation process, and outputs, as indicated on the following page.
TYPES OF INPUTS, TRANSFORMATIONS, AND OUTPUTS
INPUTS
TRANSFORMATIONS
OUTPUTS
Materials
Raw Materials Purchased Parts Supplies Energy
People
Workers Technicians Supervisors Managers Maintenance Custodial
Equipment
Land Buildings Machines Tools Office Equipment Computers
Physical
Locational
Storage
Exchange
Informational
Educational
Attitudinal
Physiological
Products
Services
TRANSFORMATION EXAMPLES: Physical or Chemical – Manufacturing, chemical processing, oil refining, etc. Locational – Airline companies, trucking companies, package delivery services. Storage – Warehousing operations, banks. Exchange – Wholesale and retail operations. Informational – T.V. news departments, newspapers, computer information services Educational – Schools, colleges, universities. Attitudinal – Entertainment industry, movie companies, theme parks. Physiological – Hospitals and healthcare institutions.
BASIC PRODUCTIVITY EQUATION
A fundamental principle of the transformation process is that value should be added during the transformation process. In that way the value of the