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Introduction to Operations

Management
Roberto C. Sombillo, RN, PhD

Definition
Operations Management is the set of
activities that creates value in the form of
goods and services by transforming inputs
into output.
 The management of systems or processes that
create goods and/or provide services

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Organizational Relationships Organization Operation Finance Marketing s .

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pays bills. collects the money .Functions of an Organization  Marketing/ Business Development – generates demand  Production/Operations – creates the product  Finance/Accounting – tracks how well the organization is doing.

Business Operations Overlap .

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Operations Interfaces .

Organizing Charts for: Service Organization and Production Organization .

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Operations Process .

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Hospital Process Inputs Processing Outputs Doctors. nurses Examination Healthy Hospital Surgery patients Medical Supplies Monitoring Equipment Medication Laboratories Therapy .

School Process Input Processing Output .

Operations Management Tangible Act .

Production Operations – tangible output Service Operations – actions .

Customer contact 2. Quality assurance 8. Labor content of jobs 4. Measurement of productivity 6. Uniformity of output 5. Amount of inventory .Key Differences 1. Uniformity of input 3. Production and delivery 7.

The School as Service Operations Characteristics Production Output Service Tangible Intangible Customer contact Low High Uniformity of input High Low Labor content Low High Uniformity of output Hig Low h Measurement of productivity Easy Difficult Opportunity to correct High Low quality problems High .

Differences Between Productions and Services Productions Services Tangible Intangible Can be Cannot be inventoried inventoried No interaction Direct between interaction customer and between process customer and process .

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. .Scope of Operations Management Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . .

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Responsibilities of Operations Management Planning Organizing – Capacity –Degree of centralization – Location – Process selection –Products & services Staffing – Make or buy –Hiring/laying off – Layout –Use of Overtime – Projects Directing – Scheduling –Incentive plans Controlling/Improving –Issuance of work orders – Inventory – Job assignments – Quality – Costs – Productivity .

Key Decisions of Operations Managers What What resources/what amounts When Needed/scheduled/ordered Where Work to be done How Designed Who To do the work .

What are the changing challenges for the Operations Managers? .

Pareto Phenomenon • A few factors account for a high percentage of the occurrence of some event(s). How do we identify the vital few? . • 80/20 Rule .80% of problems are caused by 20% of the activities.

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Inc. Automatic inventory replenishment at Wal- Mart Service PRODUCT Good .Application of OM to Service Operations Batch cooking operations at McDonald’s Just-in-Time (JIT) at Northern Telecomm.

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Most Products Are a “Bundle” of Goods and Services .

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