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Chapter 1

The part of a business organization that is responsible for producing goods or services ... Home Remodeling, Retail Sales. Computer Repair, Restaurant Meal ...

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Chapter 1

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    Slide 1:Chapter 1

    Introduction to Operations Management

    Operations Management What is operations? The part of a business organization that is responsible for producing goods or services How can we define operations management? The management of systems or processes that create goods and/or provide services Supply & Demand Operations & Supply Chains Sales & Marketing The management of systems or processes that create goods and/or provide services Basic Functions of the Business Organization Supply Chain Supply Chain a sequence of activities and organizations involved in producing and delivering a good or service The Transformation Process --OM Model Feedback = measurements taken at various points in the transformation process Control = The comparison of feedback against previously established standards to determine if corrective action is needed. Food Processor Inputs Processing Outputs Table 1.2 Hospital Process Inputs Processing Outputs Table 1.2 Automobile Assembly, Steelmaking Products are typically neither purely service- or purely goods-based. Goods Services Home Remodeling, Retail Sales Computer Repair, Restaurant Meal Songwriting, Software Development Surgery, Teaching Goods-service Continuum Manufacturing vs. Service? Manufacturing and Service Organizations differ chiefly because manufacturing is goods-oriented and service is act-oriented.

    Slide 11:Production of Goods vs. Delivery of Services

    Production of goods tangible output Delivery of services an act Service job categories Government Wholesale/retail Financial services Healthcare Personal services Business services Education

    Manufacturing vs Service Characteristic Manufacturing Service Process Management Process - one or more actions that transform inputs into outputs Process Management Variations can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems.

    Slide 15:Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . . .

    Scope of Operations Management

    Slide 16:Role of the Operations Manager

    The Operations Function consists of all activities directly related to producing goods or providing services. A primary function of the operations manager is to guide the system by decision making. System Design System Operation

    Types of Operations Table 1.4

    Slide 18:U.S. Manufacturing vs. Service Employment

    Slide 19:The Decline in Manufacturing Employment

    Productivity Increasing productivity allows companies to maintain or increase their output using fewer workers Outsourcing Some manufacturing work has been outsourced to more productive companies A Statistical Artifact Manufacturers are increasingly using contract and temporary labor which no longer show up in the statistics as manufacturing employment

    Slide 20:Why Manufacturing Matters?

    Myth #1: advanced economy like the U.S. no longer needs to manufacture and can thrive exclusively as a hub for high-value-added design and innovation

    Slide 21:Why Manufacturing Matters?

    Myth #2: the migration of mature manufacturing industries away from developed countries like the U.S. is just part of a healthy, natural process of economic evolution that allows resources to be redeployed to new, higher- potential businesses.

    Slide 22:Key Decisions of Operations Managers

    What What resources/what amounts When Needed/scheduled/ordered Where Work to be done How Designed Who To do the work

    Slide 23:Decision Making

    Models Quantitative approaches Analysis of trade-offs Systems approach

    Systems Approach The whole is greater than the sum of the parts. Why Learn about Operations Management? Operations Finance Marketing Why Learn about Operations Management? Career Opportunities abound Operations manager Purchasing manager Supply chain manager Distribution manager Quality manager Etc. Visit APICS, ISM, ASQ, CSCMP websites Operations Interfaces

    Slide 28:Historical Evolution of Operations Management

    Industrial revolution (1770s) Scientific management (1911) Mass production Interchangeable parts Division of labor Human relations movement (1920-60) Decision models (1915, 1960-70s) Influence of Japanese manufacturers

    Slide 29:Trends in Business

    Major trends The Internet, e-commerce, e-business Management of technology Globalization Management of supply chains Agility

    Slide 30:A Typical Supply Chain

    Slide 31:The need for managing supply chain

    In the past, organizations did little to manage the supply chain beyond their own operations and immediate suppliers which led to numerous problems: Oscillating inventory levels Inventory stockouts Late deliveries Quality problems

    Simple Product Supply Chain Supply Chain: A sequence of activities and organizations involved in producing and delivering a good or service Elements of Supply Chain Management Customers what products/services do customers want Forecasting predicting timing and volume of customer demand Design incorporating customer wants, manufacturability, and time to market Capacity planning matching supply and demand Processing controlling quality, scheduling work Elements of Supply Chain Management Inventory meeting demand requirements while managing costs Purchasing evaluating potential suppliers, supporting the needs of operations on purchased goods and services Suppliers monitoring supplier quality, on-time delivery, and flexibility; maintaining supplier relations Location determining the location of facilities Logistics deciding how to best move information and materials
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