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Operations Management (OM)

The transformation process that converts resources into finished goods and services.

Manufacturing Organizations

Organizations that produce physical goods.

Service Organizations

Organizations that produce nonphysical products in the form of services.

Intangible Product

A product that cannot be inventoried.

Tangible Product

A product that can be inventoried.

Effectiveness

The extent to which an objective (output) has been achieved.

Efficiency

The degree to which resources (input) have been used economically.

Productivity

Determined by comparing the production obtained (effectiveness) versus the invested effort (efficiency).

Value Chain

The entire series of organizational work activities that add value at each step from raw materials to finished product.

Value Chain Management

The process of managing the sequence of activities and information along the entire value chain.

Quality Initiatives

Strategies involving planning, organizing, and controlling for quality.

ISO 9001

A series of international quality management standards that set uniform guidelines to ensure products conform to customer requirements.

Six Sigma

A quality program designed to reduce defects and improve customer satisfaction.

Mass Customization

Providing customers with a product when, where, and how they want it.

Lean Organization

An organization that optimizes the entire process from the customer’s perspective by understanding customer needs.

Strategic Decisions

Broad, long-term decisions concerning overall direction and unique competitive features.

Tactical Decisions

Narrow, short-term decisions concerning implementation and operational issues.

Flowchart

A diagram representing a process using symbols to illustrate steps or sequence of events.

Basic Flowchart Shapes

Different symbols used to represent process steps, such as Start/End, Action/Process, and Decision.

Obstacles to Value Chain Management

Challenges that may impede effective management of value chains, such as organizational barriers and cultural attitudes.

Technology’s Role in OM

Using technology to enhance operational management and improve efficiency.