PRODUCTIONS AND OPERATIONS MANAGEMENT

Besides services, almost all organisations produce a mix of physical goods and an array of related services. Fast-food restaurants produce Burgers and hot-dogs, but their performance is judged also on the speed and friendliness in which they serve them. Even colleges produce products. If you are currently a student, you either see yourself as the product being produced or as a customer buying a service called education. Either way, you expect to come out of the college, a Certified Public Accountant or Secretary.

In simple terms, production/operations management (POM) is the study of the conversion of inputs into outputs in any organization. It is concerned with the manufacture of goods and services. It includes large and small forms, profit and non-profit making organizations. It also applies to all government agencies and functions. Table 1-1 provide a sampling of organizations from different industries and lists the inputs, conversion process and outputs for each.

                                                   Table 1-1 Production Function for Selected Firms

            Organization               Basic Inputs                              Conversion                    Products

            Fast-food                      Labour, Capital,                              Cooking and                 Sandwiches, fries,

            Restaurant                     Material, Energy                            Preparation                   drinks, friendly

           effective service

            Hospital                         Labour, Capital                               Health Care                   Healthy people

                                                Material, Energy

            College                         Labour, Capital                               Teaching and                 Graduates, and

                                                Material, Energy                              Research                       New Knowledge

                                                                                                                                         (Books,papers, etc)                   

            Bank                             Labour, Capital                              Financial Analysis            Loans, Accounts,

                                                Material, Energy                             Decision Making,              Savings Plans

                                                                                                    Record Keeping

This unit describes the fundamentals of those areas that make up production/operations management. It discusses the importance of each area and shows how the various functions fit together to create an effective and efficient production system.