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The business function responsible for
planning , coordinating , and controlling the
resources needed to produce a companys
products and services
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It is a management function
Organizations core function
Every organization has OM function
Service or Manufacturing
For profit or Not for profit
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OM Transforms inputs to outputs
Inputs are resources such as
People , Material , and Money
Outputs are goods and services
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To add value
Increase product value at each stage
Value added is the net increase between output productvalue and input material value
Provide an efficient transformation
Efficiency perform activities well at lowest possiblecost
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Se rvic esIntangible productProduct cannot beinventoriedHigh customer contactShort response timeLabor intensive
ManufacturingTangible productProduct can beinventoriedLow customer contactLonger response timeCapital intensive
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B oth u se t e chnologyB oth hav e quality, productivity, & r es pon se
iss u esB oth mu s t for e ca s t d e mandB oth will hav e capacity, layout, and locationiss u es
B oth hav e cu s tom e r s , s uppli e r s , s ch e duling ands taffing i ss u esManufacturing oft e n provid es se rvic esSe rvic es oft e n provid es tangibl e good s
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All organizations are based on decisionsDecisions follow a similar path
First decisions very broad Strategic decisions
Strategic Decisions set the direction for the entirecompany; they are broad in scope and long-term innature
Following decisions focus on specifics - Tacticaldecision
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Tactical decisions focus onSpecific day-to-day issues
Resource needs , schedules , & quantities to produce
Tactical decisions are very frequentStrategic decisions less frequentTactical decisions must align with strategicdecisions
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For long-run success companies mustplace much important on their operations
The 1950-1960 era was the U.S. golden era
where primary opportunities were marketingThe 1970-1980 U.S. companies experienced alarge decline in productivity growth international firms began to challenge in manymarkets
The 1970-1980 era saw U. S. firms laggingbehind in methods and processesThe resurgence of American business in the1990s capitalized on improved operations
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Industrial revolution Late 1700sScientific management Early 1900sHuman relations/Human Resources
1930s -Management science Mid-1900sComputer age 1970sEnvironmental Issues 1970s
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J ust-in-Time Systems ( JIT) 1980s
Total quality management (TQM) 1980sReengineering 1990s
Global competition 1980sFlexibility 1990s
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Time-Based Competition 1990s
Supply chain Management 1990s
Electronic Commerce 2000s
Outsourcing andflattening of the world 2000s
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OM has the most diverse organizationalfunctionManages the transformation process
OM has many faces and names such as;V. P. operations , Director of supply chains , Manufacturing managerPlant manger , Quality specialists , etc.
All business functions need informationfrom OM in order to perform their tasks
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Most businesses are supported by thefunctions of operations , marketing , andfinance
The major functional areas must interact toachieve the organization goals
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