In this chapter, the following content will be discussed: Definition of production operations management (OM), organizational functions, why study POM? a brief history of operations management, the future of the discipline, goods versus services, measuring productivity, career opportunities in operations management. | LSM 733- Production Operations Management OSMAN BIN SAIF LECTURE 2 1 Summary of Last Session Self Introduction Course outline, Procedures and Structure 2 Agenda of this Session Definition of Production Operations Management (OM) Organizational Functions Why Study POM? A brief history of operations management The future of the discipline Goods Versus Services Measuring productivity Career opportunities in operations management 3 What Is Production Operations Management? Production is the creation of goods and services Operations management (OM) is the set of activities that create value in the form of goods and services by transforming inputs into outputs 4 Organizing to Produce Goods and Services Essential functions: Marketing – generates demand Production/operations – creates the product Finance/accounting – tracks how well the organization is doing, pays bills, collects the money Human Resources – provides labor, wage and salary administration and job evaluation 5 Organizational . | LSM 733- Production Operations Management OSMAN BIN SAIF LECTURE 2 1 Summary of Last Session Self Introduction Course outline, Procedures and Structure 2 Agenda of this Session Definition of Production Operations Management (OM) Organizational Functions Why Study POM? A brief history of operations management The future of the discipline Goods Versus Services Measuring productivity Career opportunities in operations management 3 What Is Production Operations Management? Production is the creation of goods and services Operations management (OM) is the set of activities that create value in the form of goods and services by transforming inputs into outputs 4 Organizing to Produce Goods and Services Essential functions: Marketing – generates demand Production/operations – creates the product Finance/accounting – tracks how well the organization is doing, pays bills, collects the money Human Resources – provides labor, wage and salary administration and job evaluation 5 Organizational Charts 6 Organizational Charts 7 Why Study POM? POM is one of four major functions of any organization, we want to study how people organize themselves for productive enterprise We want (and need) to know how goods and services are produced We want to understand what operations managers do POM is IMPORTANT part of an organization 8 Options for Increasing Contribution Sales $100,000 $150,000 $100,000 $100,000 Cost of Goods – 80,000 – 120,000 – 80,000 – 64,000 Gross Margin 20,000 30,000 20,000 36,000 Finance Costs – 6,000 – 6,000 – 3,000 – 6,000 Subtotal 14,000 24,000 17,000 30,000 Taxes at 25% – 3,500 – 6,000 – 4,250 – 7,500 Contribution $ 10,500 $ 18,000 $ 12,750 $ 22,500 Finance/ Marketing Accounting OM Option Option Option Increase Reduce Reduce Sales Finance Production Current Revenue 50% Costs 50% Costs 20% 9 What Operations Managers Do ? Basic Management Functions Planning Organizing Staffing Leading Controlling 10 Ten Critical Decisions Ten Decision Areas Design of goods and .
