2. What is Operations? What is Operations?
a function or system that transforms inputs into outputs of greater value. i.e. a transformation process.

3. OM is a process oriented discipline
Inputs
Transformation
Outputs

4. Transformation process
Tuna can process
Inputs and outputs?
Hospital process

5. Why do the Operations management and Supply Chain Management matter?
In early 2005, HP
New CEO search committee when Carly Fiorina stepped down as CEO
New CEO of HP Mark Hurd improved operations through supply chain

6. Transformation Process
Physical: as in manufacturing operations
Locational: as in transportation or warehouse operations
Exchange: as in retail operations
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication

7. What is Operations Management?
What is Operations Management (OM)?
Operations Management is the management of process used to design, supply, produce, and deliver valuable goods and services to customers.

8. Operations Management (OM) is everywhere
Construction
Schools
Restaurants
Banks
Hospitality
Military
Transportation
Agriculture
Sport Teams
Health
Care
Municipalities
Gov’t
Services
Manufacturers
Entertainment
Retail
Not-for-Profit
Organizations

9. Operations Management (OM) is everywhere
Marketing
Finance and Accounting
Human Resources
Outside Suppliers

10. Supply Chain Management
Supply chain: the global network of organizations and activities involved in
(1) designing a set of goods and services and their related processes
(2) transforming inputs into goods and services
(3) consuming goods and services
(4) disposing of these goods and services
Supply chain management: the design and execution of relationship and flows that connect the parties and processes across supply chain

11. Supply Chain Network Example
Resources and Technology Supply Chain
Financial
Underwriters
Screen Writers
Talent Agencies
Casting Company
Film Maker /
Producer
Director
Raw Materials Suppliers
Chemical Dye Manufacturer
Wood Pulp Supplier
Cellulose Acetate Manufacturer
Film Manufacturer
Stock Film Wholesaler
DVD
Sales/Rentals
Theaters
Distributors
Production
Company
Product Supply Chain
Tier 4
Tier 3
Tier 2
Tier 1
Echelon 1
Echelon 2
Upstream Product Supply Chain
Downstream Product Supply Chain
Costume Supplier
Props Supplier
Equipment Supplier
1–11

12. Characteristics of Goods and Services
Tangible
Can be inventoried
Little customer contact
Long lead time
Often capital-intensive
Quality easily assured
Material is transformed
Intangible
Cannot be inventoried
Extensive customer contact
Short lead time
Often labor intensive
Quality harder to assess
Information or customer is transformed

13. Value-Added & Product Packages
Value-added is the difference between the cost of inputs and the value or price of outputs.
Product packages are a combination of goods and services.
Product packages can make a company more competitive.

15. Decline in Manufacturing Jobs
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

16. Functional activities that connect Operations managers
Customer Management: interfaces with customers and order processing and fulfillment
Supply Management: processes to identify, acquire and administer inputs
Logistics Management: movement of materials and information within, into and out of the firm

17. Historical events in OM

18. Historical events in OM
Industrial revolution (Before 1800):
Steam engine: James Watt
Division of labor: Adam Smith
Interchangeable parts: Eli Whitney
Technical capitalist ( ):
Improved manufacturing technology
Emerging transportation network

19. Historical events in OM
mass production ( ):
Emergence of local factory
Introduction of steam and electrical power
Scientific management( ):
More scientific management
Moving assembly (Henry Ford)

20. Historical events in OM
Human relations and Demand growth ( ):
Hawthorne studies (Elton Mayo)
Motivation theories (Abraham Maslow and Douglas
Mcgregor)
Introduction of computer usage and quantitative
methods
Increased automation

21. Historical events in OM
Global competition ( ):
Just in time system
Early outsourcing
World class manufacturing ( ):
Increased computerization and information system
Global sourcing and need for supply chain coordination
E-commerce (2000-present):
Internet revolution

22. CWU College of Business Supply Chain Management specialization
SCM 310 Supply chain management
SCM 425 Procurement and supply management
SCM 435 Advanced topics in operations and supply chain management
SCM 475 Global supply chain management
SCM 480 Supply chain strategy

23. CWU College of Business Supply Chain Management certificate
SCM 310 Supply chain management
SCM 425 Procurement and supply management
SCM 435 Advanced topics in operations and supply chain management
SCM 475 Global supply chain management

24. CWU College of Business Supply Chain Management certificate (Choose one from )
ACCT 305 Cost accounting
Bus 490 Cooperative education
MGT 384 Intro. to international business
MGT 484 international management
SCM 324 Quality and continuous improvement

25. Chapter 1 homework problems
Do problems 2, 3(a), 4(c), 7 on page 21 and 22.