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OPERATIONS MANAGEMENT
MGT 460
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Self Introduction Dr. Arshad Zaheer
Education: PhD, MS(Engineering Management), MS (E-Commerce), MBA Reviewer of International Journals Ph.D/M.Phil Supervisor/External Reviewer Publications in International journals Books//Monographs Articles in Edited Books
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Self Introduction Dr. Arshad Zaheer
National and International Conferences Workshops Administrative Experience Teaching Experience Areas of Interest Research Software Expertise (SPSS, AMOS, VPLS)
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Course Outline Introduction to Operations Management
Productivity Measurement Competitiveness and Strategy Managing Quality Linear Programming Transportation Models Assignment Methods Forecasting Project Management
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Course Outline Decision Making Tools Learning Curves
Inventory Management Operations Strategy in a Global Environment Location Strategies Layout Strategies Supply Chain Management Human Resources and Job Design
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Course Objectives Learning operational management techniques that could be applied to real world problems understand the strategic role of operations management in creating and enhancing a firm’s competitive advantages understand key concepts and issues of OM in both manufacturing and service organizations apply analytical skills and problem-solving tools to the analysis of the operations problems letting students apply the relevant operations management technique to the correct situation letting students understand operational management results and draw the correct conclusion from them
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Reference Material Operation Management by Jay Heizer, Barry Render and Jagadeesh Rajashekhar Operations Research: An Introduction by Hamdy A. Taha Operations Management by William J. Stevenson Online search
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Course Plan and Requirements
Lectures Assignments Quizzes Sessional Marks Distribution
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Lecture 1 Introduction to Operations Management Dr. Arshad Zaheer
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Lecture Outline Management Operations Value-Added
Operations Interfaces Definition of Operations Management Nomenclature Goods and Services Responsibilities of Operations Manager New Trends in OM
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Management What is Management?
Management is the scientific study concerning the different activities (like POSDCORB) in order to maximize profit, minimizing cost and to optimize productivity
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Operations What is ‘Operations’?
‘Operations’ consists of activities related to the production of goods and services. ‘Goods Oriented Operations’ consists of manufacturing and assembly operations ‘Service Oriented Operations’ consists of, health care, transportation, Education, retailing etc.
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Operations as core function
‘Operations’ function is the core of most business organizations Inputs are converted to Valuable outputs after transformation process
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Value-Added Value added
The difference between the cost of inputs and the value or price of outputs. Inputs Land Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback Value added
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Food Processor Inputs Processing Outputs Raw Vegetables Cleaning
Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment
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Hospital Process Inputs Processing Outputs Doctors, nurses Examination
Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy
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Why Organizations need Operations Manager
An operations Manager controls the processes by which value is added from conversion of inputs to outputs.
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Production and Operations Management
Production is the creation of goods and services Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs
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What Is Operations Management?
Organization Finance Operations Marketing The management of systems or processes that create goods and/or provide services
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Organizing to Produce Goods and Services
Essential functions: Finance/accounting – allocation of resources, investment decisions, tracks how well the organization is doing, pays bills, collects the money Marketing – Front line activity, generates demand Production/operations – creates the product
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Operations Interfaces
Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS
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What Is Operations Management?
Operations management (OM) is the area of management which is concerned with administration of business practices especially overseeing, designing and controlling the process of production set of activities that creates value in the form of goods and services by transforming inputs into outputs with maximum level of efficiency ensuring profitability for the organization
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Nomenclature Production Management
Production and Operations Management (POMA) Operations Management Operations Research (Interdisciplinary Subject) Grey Areas
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Operations Research Operations research is the development and collection of techniques based on mathematics and other scientific approaches that finds solutions to your problems.
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Difference between Operations Management and Research
OR relies on mathematical modeling and OM relies on practical scenarios/industrial cases. OR is domain and tool of Engineers while OM is considered to be one of the critical tools of Managers.
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Why Study OM? OM is one of three major functions (marketing, finance, and operations) of any organization We want (and need) to know how goods and services are produced We want to understand what operations managers do OM is such a costly part of an organization
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What Operations Managers Do
Basic Management Functions Planning Organizing Staffing Leading Controlling
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Responsibilities of Operations Management
Products & services Planning – Capacity Location Make or buy Layout Projects Scheduling Controlling Inventory Quality Organizing Degree of centralization Subcontracting Staffing Hiring/laying off Use of Overtime Directing Incentive plans Issuance of work orders Job assignments
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The Critical Decisions
Design of goods and services What good or service should we offer? How should we design these products and services? Managing quality How do we define quality? Who is responsible for quality? Table 1.2 (cont.)
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The Critical Decisions
Process and capacity design What process and what capacity will these products require? What equipment and technology is necessary for these processes? Location strategy Where should we put the facility? On what criteria should we base the location decision? Table 1.2 (cont.)
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The Critical Decisions
Layout strategy How should we arrange the facility? How large must the facility be to meet our plan? Human resources and job design How do we provide a reasonable work environment? How much can we expect our employees to produce? Using this and subsequent slides, you might go through in more detail the decisions of Operations Management. While greater detail is provided by these slides than the earlier one, you may still decide to have the students contribute examples from their own experience. Table 1.2 (cont.)
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The Critical Decisions
Supply chain management Should we make or buy this component? Who are our suppliers and who can integrate into our e-commerce program? Inventory, material requirements planning, and JIT How much inventory of each item should we have? When do we re-order? Table 1.2 (cont.)
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The Critical Decisions
Intermediate and short–term scheduling Are we better off keeping people on the payroll during slowdowns? Which jobs do we perform next? Maintenance Who is responsible for maintenance? When do we do maintenance? Table 1.2 (cont.)
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New Challenges in OM From To Local or national focus Global focus
Batch shipments Low bid purchasing Lengthy product development Standard products Job specialization Global focus Just-in-time Supply chain partnering Rapid product development, alliances Mass customization Empowered employees, teams To
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Characteristics of Goods
Tangible product Consistent product definition Production usually separate from consumption Can be inventoried Low customer interaction
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Service Definitions Services are deeds, processes or performances. OR
A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer
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Characteristics of Service
Intangible product Produced and consumed at same time Often unique High customer interaction Inconsistent product definition Often knowledge-based Frequently dispersed
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Goods-service continuum
Steel production Automobile fabrication House building Road construction Dressmaking Farming Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing Low service content High goods content High service content Low goods content Increasing goods content service content
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Ethics and Social Responsibility
Challenges facing operations managers: Developing and producing safe, quality products Maintaining a clean environment Providing a safe workplace Honouring community commitments
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