Chapter 1 – Challenges of Operation Management

The creation of goods and services
Operation Management
is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.
Supply Chain
is a global network of organizations and activities that supply a firm with goods and services.
Economic activities typically produce an intangible product including repair and maintenance government, food and lodging, transportation, insurance, trade, financial, real estate, education, law, medicine, entertainment, and other professional occupations.
Service Sector
the segment of the economy that includes trade, financial, lodging, education, legal, medical, and other professional occupations
The Management Process
Planning, Organizing, Staffing, Leading, Controlling
3 Functions
Marketing, Operation, Finance
Frederick W. Taylor
known as the father of scientific management, contributed to personnel selection, planning and scheduling, motion study and now popular field of ergonomics.
Eli Whitney
credited for the early popularization of interchangeable parts, which was achieved through standardization and quality control.
6 Decision process in operation
1. Clearly define the problem and the factors that influence it
2. Develop specific and measurable objectives
3. Develop model
4. Evaluate each alternative solution based on its merits and draw backs
5. Select best alternative
6. Implement the decisions and set a timetable for completion
Challenges for OM
Global focus, Supply chain partnering, Sustainability, Rapid Product Development, Mass customization, JIT performance and Empowered employees
Productivity increases when
inputs decreases while output remain the same

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