1. Introduction to Operations Management

2. What is Operations Management?
Operations function consists of all activities directly related to producing goods or providing services
Production & Operations Management is defined as the design, operation, and improvement of the transformation process, which converts the various inputs into desired outputs of products and services.

3. Operations as a System Energy Materials Transformation (Conversion)
Process
Materials
Goods or
Services
Labor
Capital
Feedback information for
control of process inputs
and process technology
Information

4. The Product/Process Continuum
Automobile retailers
Photocopier manufacturers & service providers
Banks
Consultancies
Automobile manufacturers
Restaurants
Airlines
Undertakers
Product orientation
Process orientation
Organizations on a Product/Process Continuum

5. Manufacturing vs Service
Characteristic
Manufacturing
Service
Output
Tangible
Low
High
Easy
Intangible
High
Low
Difficult
Customer contact
Uniformity of input
Labor content
Uniformity of output
Measurement of productivity
Opportunity to correct
quality problems

6. Operational Planning & Control
Decisions in OM
Strategic
Tactical
Operational Planning & Control

7. Why Study Operations Management?
Systematic Approach
to Org. Processes
Operations
Management
Business Education
Career Opportunities
Cross-Functional
Applications

8. Operations Management
Responsibilities of
Operations Management •
Planning –
Capacity
Location
Make or buy
Layout
Projects
Scheduling
Controlling
Inventory
Quality •
Organizing –
Degree of centralization –
Subcontracting
Products and services •
Staffing –
Hiring/laying off –
Use of Overtime •
Directing –
Incentive plans –
Issuance of work orders –
Job assignments

9. Types of Operations 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

10. Steps in the production/operations process from the point of view of an entrepreneur
Product/Process Choice
Service Operations Management
Business Process Outsourcing and Off-shoring
Facility Location Planning
Facility Layout Planning
Facility Capacity Planning
Project Management
Inventory Management for Independent Demand Items
Materials Requirement Planning (MRP)/ Just-In-Time (JIT) System/ Supply Chain Mgt. (SCM)
Total Productive Maintenance (TPM)

11. Steps in the production/operations process from the point of view of an entrepreneur
Aggregate Production/ Operations Planning
Work Design
Operations Scheduling
Quality Management
Demand Forecasting
Operations Strategies

12. OM in the Organization Chart
Finance
Marketing
Operations
Director
Plant Manager
Operations
Manager
Manufacturing, Production control, Quality assurance, Engineering, Purchasing, Maintenance, etc 8

13. Significant Events in OM

14. THE CHRONOLOGICAL DEVELOPMENT OF OM
The Industrial Revolution (late 1700s)
Adam Smith: Division of Labour
The Evolution of Management Thought
birth of mass production
Scientific Management (1910s)
a technical understanding of work
Frederick W. Taylor : Work Study

15. THE CHRONOLOGICAL DEVELOPMENT OF OM
Human Relations Movement :Industrial psychology and industrial sociology (1910s)
developing a human understanding of work
Hugo Mintsberg
Hawthorne studies
Statistical control of quality (1930s)
Walter Shewhart

16. THE CHRONOLOGICAL DEVELOPMENT OF OM
Management Science (1940s)
optimizing the use of limited resources
Operations Research
Developed new Quantitative Techniques
Functionalization of OM (1950s-60s)
bringing it all together in one function

17. THE CHRONOLOGICAL DEVELOPMENT OF OM
Computer Age: The MRP (1970s)
computerizing operational decision making
Materials Requirements Planning
JIT, the Quality Revolution and Operations strategy (1980s)
Toyota production system
operations strategies

18. THE CHRONOLOGICAL DEVELOPMENT OF OM
Japanese Influence: Total Quality Management (1990s)
Business Process Reengineering
Supply Chain Management
E-commerce (2000s)

19. OPERATIONS MANAGEMENT TIME LINE

20. Core Services
Core services are basic things that customers want from products they purchase 11

21. Core Services Performance Objectives
Quality
Flexibility
Speed
Operations
Management
Price (or cost
Reduction)

22. Value-Added Services
Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way 12

23. Value-Added Service Categories
Problem Solving
Information
Sales Support
Operations
Management
Field Support

24. Tradeoffs Models A model is an abstraction of reality.•
A model is an abstraction of reality. –
Physical
Schematic
Tradeoffs –
Mathematical
What are the pros and cons of models?

25. Trends in OM
Service sector growing to 80% of non-farm jobs- See Figure 1-4
Global competitiveness
Demands for higher quality
Huge technology changes
Time based competition
Work force diversity

26. Current Issues in OM
Effectively consolidating the operations resulting from mergers
Developing flexible supply chains to enable mass customization of products and services
Managing global supplier, production and distribution networks
Increased “commoditization” of suppliers
Customers demand better quality, faster deliveries, and lower costs
Increased cross-functional decision making 14

27. Current Issues in OM (cont’d)
Achieving the “Service Factory”
Achieving good service from service firms (74% U.S. employment in service sector jobs)
Making efficient use of Internet technology (ERP, CRM,SRM)
Total quality management (TQM) – TPS
“In business today, the emphasis is not so much on what you make, but on how you do business. Dell makes computers just like every other PC manufacturer.” 15