Page 25 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes processes, and technology so that an enterprise can perform better, faster, and with greater
productivity. It provides customers with products and services; and supports corporate strategies
by working with marketing, finance and human resource areas.

Self Assessment

Fill in the blanks:

13. The firm’s strategic positioning and its ……………… segmentation decisions to a large
extent determine the manufacturing and operations strategy.
14. Decisions about people and the organization of the operations function interact significantly
with both structural and ……………… decisions.
15. The effectiveness of operational planning and budgeting is driven by the level of
……………… between these two areas.

1.6 Summary

 The class of problems represented by Operations Management came into high relief in the
era after the Industrial Revolution.
 An important reason for the re-emerging importance of Operations Management was
developments in the field of computers and communications technology.

 The traditional view perceives Operations Management as a system that is involved with
the manufacture and production of goods and services.

 The more modern view perceives Operations Management as a system designed to deliver
value.
 This distinction between consumers and customers (internal and external) is important
for operations managers.

 The roles of the operations manager have to be suitably moderated depending on the
changed circumstances.

 The primary role of the operations manager is to accomplish the department’s mission as
best as possible.
 Finance provides data on product and service costs that help managers evaluate operational
performance.
 The distributed processing environment and the growth and evolution of Enterprise
Resource Planning (ERP) systems for the organization have a direct impact on operations.
1.7 Keywords

Contracts: These constitute business exchanges in which neither services nor goods are
transferred; instead, there is an implicit understanding between the customer and the provider
that goods and services will be provided on an “as needed” basis.
Goods: These are tangible items that are usually produced in one location and purchased in
another. They can be transferred from one place to another and stored for purchase by a consumer
at a later time.
Operations Research (OR): Operations research is the application of scientific methods to improve
the effectiveness of operations, decisions and management.

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