1. Rev. 09/30/04SJSU Bus 140 - David Bentley1 Chapter 1 - Overview Operations Management Definition, Functions, Evolution

2. Rev. 01/22/02SJSU Bus 140 - David Bentley2 Definition: “Operations” Conversion of Inputs into Outputs Transformation of Resources into Products ChangingLabor, capital, material, etc. into Goods and services

3. Rev. 01/23/06SJSU Bus 140 - David Bentley3 Resources (Inputs) ___________ ____________

4. Rev. 01/22/02SJSU Bus 140 - David Bentley4 Definition: “Management” Activities involved in: Planning Organizing Leading Controlling Other terms: staffing, directing, etc. Directed to achieving organization goals

5. Rev. 09/06/01SJSU Bus 140 - David Bentley5 Definition: “Operations Management” “The value-added activities of planning, organizing, leading, and controlling involved in converting resources into goods and/or services.”

6. 01/23/02SJSU Bus 140 - David Bentley6 Organizational Scope of OM Applies to all organizations Manufacturing Service (banks, insurance, health care) Wholesale & retail Schools Religious institutions and charities Political parties, trade groups, unions Etc., etc., etc.

7. Rev. 09/06/01SJSU Bus 140 - David Bentley7 Primary Business Functions

8. Rev. 09/06/01SJSU Bus 140 - David Bentley8 OM Topics Competitiveness, strategy, productivity Quality management Types of operations (project, job, batch, repetitive, continuous flow) Forecasting and aggregate demand Supply chain management (including purchasing, inventory control, MRP, JIT) Project management Product and service design, capacity planning Process design, facility location and layout

9. Rev. 01/23/06SJSU Bus 140 - David Bentley9 Why Study OM? ________________________________ ________________________________ ________________________________

10. Rev. 09/05/02SJSU Bus 140 - David Bentley10 Evolution of OM – pre-1900 Ancient – government, military, religious Pyramids, Great Wall, some trade Most business small, local, family Renaissance: exploration, trade, banking, manufacturing – 1400-1700 Division of labor, interchangeable parts, and the steam engine – 1700’s Transportation: RR, steel and steamships – 1800’s

11. Rev. 01/26/05SJSU Bus 140 - David Bentley11 Evolution of OM – 1900’s Scientific management (1900-1920) Frederick W. Taylor (1856-1915) Industrial engineer “Father of Scientific Management” Published The Principles of Scientific Management in 1911 (+ Henry Gantt and Harrison Emerson ) Time and motion study: Frank & Lillian Gilbreth Assembly line and standardization: Henry Ford Inventory management model: F.W. Harris

12. Rev. 01/26/05SJSU Bus 140 - David Bentley12 Evolution of OM – 1900’s Quality: SPC: Walter Shewhart, Acceptance Sampling: H.G. Romig & H.F. Dodge Motivation: Hawthorne studies: Elton Mayo Hierarchy of needs: Abraham Maslow, Frederick Hertzberg Theory X and Theory Y: Douglas McGregor Theory Z: William Ouchi Operations research: various

13. Rev. 09/06/01SJSU Bus 140 - David Bentley13 Evolution of OM – WW II Focus on output Post-war conditions of various countries U.S. – capacity + consumer demand + money; women in the workplace; GI bill Changes in emphasis: Production > Mktg > Cost management > Mergers & Acquisition Compare to Europe and Japan

14. Rev. 02/04/04SJSU Bus 140 - David Bentley14 Evolution of OM – 1970+ Effects of Oil Embargo 1 and 2 Role of Quality Understanding of “Lean Operations” (JIT) Recent trends See next slide

15. Rev. 02/04/04SJSU Bus 140 - David Bentley15 Recent Trends Global markets TQM Worker involvement Technology Reengineering Lean operations (JIT) Elimination of waste Customer satisfaction Shortening of time spans MRP, Closed Loop MRP, MRP II, ERP Extensive outsourcing Supply Chain Mgmt E-commerce: B2C, B2B Internet brokering and application hosting Cost containment Business relocation Downsizing