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In order to make profits, the company’s sales must be more than its
costs. Operations Management (OM) is defined as the design, operation and
improvement of the systems that create and deliver the firm’s primary
products and services, at its lowest costs so as to maximise the firm’s
profits, which is a prime organisational objective, to ensure that the
organisation exists tomorrow.
To actually produce the phones and get them to the customer, many
transformations must take place. For example the suppliers purchase raw
materials and produce the parts for the phone. The Nokia manufacturing
plant takes these parts and assembles the various cell phones that have
become popular. Orders for the phones are taken over the Internet from all
the distributors, dealers and warehouse sites around the world. Local
retailers work directly with customers in setting up and managing cell phone
accounts. OM is concerned with managing all of these individual processes as
effectively as possible.
The strategic issues are usually abroad, addressing such questions as these:
How will we make the product? Where do we locate the facility, or,
facilities? How much capacity do we need? When should we add more
capacity? Thus, by necessity, the timeframe for strategic decisions is
typically long-usually several years, or more, depending upon the specific
industry.