The conversion of materials or skills into more valuable products stands as the primary function of production and operations.The phrase “production and operations” covers the creation of physical products, as well as digital products and services. The goal of production and operations is the delivery of products and services that meet end-user needs and quality expectations.
Taken by itself, the function of production refers to making goods. Manufacturing of physical goods serves as the classic model of production. The creation of digital goods, such as eBooks or MP3s, also falls beneath the production umbrella. Digital goods require processing from the raw material of the original material, writing or music, into something that stands in for a physical product.
Operations encompass the creation of services, which produce no tangible or permanent goods. For example, where an MP3 functions as a good, a concert by the band functions as a service. Operations takes responsibility for ensuring the service occurs on schedule and meets expectations.