Production: the creation of goods and services
Operations Management (OM): Activities that add value to the creation of goods and services by transforming inputs to outputs.
Organizations need to perform three functions to ensure a smooth production and the organization’s survival:
1. Marketing: generates the demand, or takes the order for a product or service.
2. Productions/ Operations creates the product.
3. Finance/accounting tracks how well the organization is doing, pays the bills, and collects money.
We study OM for four reasons:
To see how the OM activity functions, and how people organize themselves for productive enterprise.
To know how goods and services are produced.
To understand what operations managers do.
To find a way an organization can improve its profitability and its service to society, since OM is a costly part of an organization.
The management process is the application of planning, organizing, staffing, leading, and controlling in order to the achieve objectives. This process is applied to the decisions operations managers make in the OM function.
Some people of note that have contributed to OM are:
-Eli Whitney (1800), who made interchangeable parts popular through standardization and quality control.
-Frederik W. Taylor(1801), who wanted to find the best way to produce and be resourceful, and who believed managers should be responsible for:
Matching employees to the right job
Providing a proper training
Providing proper work methods and work
Establishing legitimate incentives for work to be accomplished
Industrial engineering, management science, physical sciences and information sciences have also contributed to OM. Information sciences contributed to improving productivity and provided society with more diverse goods and services at the same time.
Services: Economic activities that produce an intangible product (such as education, entertainment, lodging, government, financial and health services).
Characteristics of Goods
Characteristics of Services
Consistent product definition
Can be inventoried
Production usually separate from consumption
Low customer interaction
Distributed to more clients at one time the client, through for example local offices
Easy to automate
Often not unique
Inconsistent product definition
Cannot be inventoried
Produced and consumed at same time
High customer interaction, interaction demands uniqueness
Frequently dispersed; frequently brought to
Knowledge-based, hard to automate
Since the activities of the operation functions are often the same for both goods and services, there isn’t a clear difference between them. Almost all goods are a combination of a service and a tangible product, and service can also be essential to production.
Pure service: a service that does not include a tangible product.
Some changes that have occurred/are occurring in OM are:
A more global focus due to reliable worldwide communication and transport networks.
Just-in-time systems due to short product life cycles.
E-commerce because of the Internet, fast international communication, and computer-aided design.
Mass customization due to flexible production processes and worldwide markets.
Empowered employees and high ethical social responsibility due to a change in the sociocultural area and a global review of ethics.
Environmentally sensitive manufacturing because of environmental issues and increasing costs of waste disposal.
Productivity: the ratio of outputs (goods and services) divided by one or more inputs (such as labor, capital, or management).
Since efficiency improves when productivity improved, it is important to use resources in the most efficient way, so that more value is added to the good or service. This can be done by:
Reducing inputs while keeping the output the same.
Increasing the output while keeping inputs the same.
Outputs are goods and services, while inputs are capital, labor, physical resources and management. A country can improve the standard of living my measuring the productivity and improving it.
Single-factor productivity: the ratio of one resource (input) to the goods and services produced (outputs). A common measure of productivity is when input is measured in labor-hours.
Productivity: Units produced / Input Used
Multifactor Productivity: the ratio of many or all resources (inputs) to the goods and services produced (outputs). Also known as total factor productivity.
Productivity: Output / (labor + material + energy + capital + other inputs)
Especially in the service sector productivity measurement is difficult because the end product is not easy definable.
Managers can improve productivity by changing labor, capital or management.
If the labor force is better educated and healthier, they have a better contribution to productivity. Three key variables for improved labor productivity are:
Basic education (needed for effectivity)
Social overhead that makes labor available
In developed nations there are even more challenges to management:
Maintaining and enhancing the skills of labor.
Better utilized labor with a stronger commitment.
There is always a trade-off between Capital and labor. When the interest rate is higher, there is less investment in capital because the return on investment has been reduced.
What also contributes to productivity is more effective use of capital.
Management ensures that labor and capital are effectively used to increase productivity. In order to improve productivity, effective use of knowledge and capital is needed, and the manager’s job is to select the best new capital investments and improve the productivity of the existing ones.
Knowledge society: a society in which much of the labor force has migrated from manual work to work based on knowledge.
While there are many good theories on how to improve goods-production based activities, the productivity in the service sector is more difficult to improve, since work in the service sector is often:
Ethics and Social Responsibility
The changes in the environment, laws and values represent the challenges that come from conflicting perspectives of stakeholders.
Managers must meet the demand of the market place while doing everything in a socially responsible and ethical way. Therefore managers should have a moral awareness and focus on increasing productivity, as well as developing safe quality products, maintaining a clean environment and a safe workplace.
Voor toegang tot deze pagina kan je inloggen
Inloggen Word JoHo donateur
Online toegang tot alle pagina's sluit een abonnement af
Upgraden naar abonnement I naar abonnement II
Inloggen als donateur of abonnee
Om online toegang te krijgen kun je JoHo donateur worden en een (service) abonnement afsluiten
Vervolgens ontvang je de link naar je online account aan en heb je online toegang
Lees hieronder meer over JoHo donateur en abonnee worden
Ben je al JoHo donateur? maar heb je geen toegang? Lees dan hier meer
Korte Advieswijzer 'JoHo donateur worden & service-abonnement afsluiten':
JoHo donateur + service-abonnement I
JoHo donateur met service-abonnement II
JoHo donateur met service-abonnement III
JoHo donateur met doorlopende reisverzekering
Sluit je via JoHo een jaarlijks doorlopende verzekering af dan kan je gedurende de looptijd van je verzekering gebruik maken van de voordelen van service-abonnement III: hoge kortingen + volledig online toegang + alle extra services. Lees meer.
Abonnementen-advieswijzers voor JoHo services:
Abonnementen-advieswijzers voor JoHo services
Steun JoHo door donateur te worden en steun jezelf door ook een abonnement af te sluiten
My JoHo membership
Save for next login
Join JoHo JoHo donateur
upgrade naar abonnement I
upgrade naar abonnement II
To my bundles & lists
Hogan Lovells behoort tot de grootste internationale advocatenkantoren ter wereld en zoekt nieuw talent!
Ontmoet je nieuwe werkgever, volg carrièregerichte workshops en laat je cv checken
Een trefpunt voor emigranten, expats, werkzoekenden en ondernemers om te informeren en te oriënteren.
Word nu abonnee van OneWorld!
10 x per jaar een Magazine over mondiaal denken & groen doen
Stagelopen,vrijwilligerswerk of tussen'jaar' op Curaçao?
Leer meer van juridische, bedrijfskundige of bijvoorbeeld medische werkzaamheden
Afhalen & Aanwezigheid
Aanvullingen,Tips & Opmerkingen? Neem contact op
Zoeken & Menu's
Gegevens JoHo Foundation
Events & Open dagen
Bekijk de hele agenda
My World of JoHo