What Is Operations Management?

1. What Is Operations Management?

2. What Is Operations Management? Operations for products and services. Where quality fits in. Customer orientation

3. An operation is … … the process of changing inputs into outputs through some type of transformation system, thereby adding value.

4. A manager is … … someone who plans, acquires and manages resources needed to meet specific objectives. PLANS ACQUIRES MANAGES

5. Operations Management Management of the conversion process which transforms inputs such as raw material and labour into outputs in the form of finished goods and services. Inputs (materials, employees and/or customers) Transformation Process Outputs(Productsandservices)

6. Operations function Value Added Inputs: Land Labour Capital Outputs: Goods Services Transformation Process Feedback Control Feedback Feedback

7. Operations Examples Goods Producing Farming, mining, construction , manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites Types of Operations

8. Transformation process at a Food Processor

9. Transformation process at a Hospital

10. Examples

11. Relationships for Typical Systems

12. Products Tangible Can be inventoried No interaction between customer and process Services Intangible Cannot be inventoried Direct interaction between customer and process Products vs. Services 1-6

13. Services as a Percent of Gross Domestic Product (GDP) for Different Countries Source: The World Fact book 2000, Central Intelligence Agency, Washington, DC.

14. Goods vs. Services

15. Goods-service continuum. Most products include both elements Steel productionAutomobile fabrication House buildingRoad construction Low service content High goods content Dressmaking Farming Auto repair Appliance repair Maid Service Manual car wash goods Teaching Lawn mowing High service content Low goods content service

16. Differentiating features of Operations Systems • A number of features differentiate operations systems • Degree of product standardization (standardized vs. customized) • Type of process (quantity of output) • Production of goods vs. services

17. Product / Process Matrix

18. Operations Management • We want to manage the operations to make them more productive. • The meaning of efficiency, productivity and effectiveness ….

19. Some terms you hear … • Efficiency is output over input . If we do things more efficiently it takes less effort. If we waste less in the process then we get more output for a given amount of input. • Productivity is the amount of product made for a unit of input. # of pieces per hour or per person. Rate for a unit of some input. • Effectiveness is the power to get it done. May not consider cost of inputs.

20. Operations Marketing Finance Three basic functions • Is OM function adding value during the transformations process? What is added value? (The difference between the cost of inputs and the price of outputs) • Is there any overlapping between the main functions?

21. Role of OM within an Organization

22. The scope of Operations Management

23. Linking OM to Customers and Suppliers • Benefits of Buffering the Transformation Process • The process was not disturbed by environmental interaction.

24. Linking OM to Customers and Suppliers • Benefits of Buffering the Transformation Process • Productivity was maximized when processes operated at continuous rates. • Process management skills were different from those of other functional activities.