Chapter 10
Operations Management
By Boundless
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Operations management is the management of processes that transform inputs into goods and services that add value for the customer.
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Operations management transforms inputs (labor, capital) into outputs (goods and services) that provide added value to customers.
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Services operations often encounter different opportunities and challenges than tangible goods, and thus require unique operational considerations.
Quality management adopts a number of management principles that can be used to guide organizations towards improved performance.
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Total quality management (TQM) is an integrative philosophy of management for continuously improving the quality of products and processes.
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Companies ensure the quality of products and services by adhering to ISO standards and performing quality audits to ensure compliance.
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Reducing waste by more efficient manufacturing is a key goal of management, with supply chain sustainability seen as a key component.
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Productivity, or the efficiency of production, is important because it can drive increases in output and improvements in living standards.
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New ways of developing and using software have led to higher efficiency and productivity through greater interaction between users.
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Productivity improving technologies lower traditional factors of production of land, labor capital, materials, and energy.
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Purchasing is the formal process of buying goods and services.
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Inventory management is primarily concerned with specifying the shape and percentage of stocked goods to reduce costs and improve sales.
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The purpose of scheduling is to minimize production time and costs.
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Routing is the process of selecting paths in a network along which to send network traffic.
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Outsourcing is the contracting of an existing business process to an external, independent organization.
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Logistics plans, implements, and controls the forward and reverse flow and storage of goods between the point of origin and consumption.
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Quality control is a process that evaluates output against a standard and takes corrective action when output doesn't meet that standard.
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Investment in information technology has made supply chains faster, cheaper, and more reliable.
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Organizations put a lot of time and money into new products and thus deploy various methods in an attempt to mitigate the risks.
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Designing effective operations is critical, and can have both short-term and long-term impacts on an organization's longevity.
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Capacity planning revolves around answering the question "How much? " in both long-term and short-term situations.
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Facility layout decisions are based on criteria aimed at creating an effective and efficient workflow and high standard production.
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An organization's location choice impacts its efficiency and effectiveness, so it is important for it to properly weigh the various factors.
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Sustainability initiatives consider every dimension of how a business operates in the social, cultural, and economic environment.