Operations management is responsible for producing goods and providing services. As such, it is the core function of every business organization. Operations management plans and coordinates the use of the organization’s resources to convert inputs into outputs.

Operations decisions involve design decisions and operating decisions. Design decisions are strategic; they relate to capacity planning, product design, process design, layout of facilities, and selecting locations for facilities. Operating decisions relate to quality assurance, scheduling, inventory management, and project management.

In for-profit organizations, effective operations management can lead to higher productivity, lower costs, higher quality, and other competitive advantages, and increased shareholder wealth. In not-for-profit organizations, effective operations management can lead to lower costs, higher levels of customer service, and more efficient use of resources.

The chapter also presents a brief overview of the historical evolution of operations management and it ends with a list of strategic issues that are currently high priority for business organizations. At the top of that list are the Internet and e-business, outsourcing, supply chain management, management of technology, and agility.