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In our day to day live we routinely deal with both physical goods as well as services. But where do these products or services come from?: How are these goods and services made?
This is where Operations Management comes into play: looking closely at the production of such goods, we’re able to take a peek inside the „black box“ which is the production process.
Operations Management can be defined as the management of the entire process that transfers inputs into outputs. Outputs are as said physical goods or services. Inputs can be material, manpower and machines.
Here’s an example from the car industry: The material, metal in this case, is supposed to be reshaped by a machine. This machine, a press in our example, is operated by a machine operator.
The metal thus becomes, through the transformation process, a finished component which is assembled on a car as the output of this process.
A central aspect of Operations Management is the improvement of the transformation processes which can be accomplished by concepts such as Total Quality Management, Kanban, or Total Productive Maintenance.