1. Honghui (Henry) Deng Ph.D of BA, Red McCombs School of Business, The University of Texas at Austin Assistant Professor, Business School, The University of Nevada, Las Vegas OPERATIONS MANAGEMENT

2. Educational Background Ph.D., Red McCombs School of Business, University of Texas at Austin, 2002 --MSIS, OR/OM, Finance --Co-Supervised by Dr.s William W. Cooper & Patrick Brockett Visiting Scholar, Red McCombs School of Business, UT- Austin, 1997-1999 --Marketing Department BBA, College of Business Administration, Chongqing University, China, 1994 --Marketing & Finance B.E, Chongqing University, 1990 --Electronic and Computer Engineering

3. Working Experience Academic Experience: Assistant Professor, School of Business, the University of Nevada, Las Vegas Research Associate, Center of Risk Management & Insurance, School of Business, University of Texas at Austin Instructor, MSSTC Program, The Innovation Creativity Capital Institute (IC2), Visiting Professor, Marketing Dept., School of Business, UT Austin Project Official, The Ministry of Education of China, Beijing, China Lecturer, College of Electronic Information Engineering, Chongqing University, China Industrial Experience: Strategy Consultant ， Rapp Collins Inc. of Omnicom Group Ass. of Director & Consultant ， IC2 and Texas Tech. Incubator Co-Founder & CEO, HHD Consulting LLC. Membership: The Institute of Operations Research and the Management Sciences (INFORMS) Association of Risk Management & Insurance Association for Information Systems (AIS)

4. Current Research – Operations Research/Management – IT Strategy & Organization – Knowledge Management – Management Science – Risk Management and Insurance – Decision Science – Data Communication & Networks

5. Teaching Experience * Supply Chain Management & Operation Strategy * Management Information Systems * Commercialization Strategy * Risk Management * Statistics I * Applied Information Technology * Data Communications & Networks

6.  Operation Research/Management landscape  Introduction of Operations Management  Overview of syllabus and course objectives  Student information sheet  Introduction of Forecasting  Group Assignment Today’s Schedule

7. Historical Evolution of Operations Management  Industrial revolution (1770’s)  Scientific management (1911)  Mass production  Interchangeable parts  Division of labor  Human relations movement (1920-60)  Decision models (1915, 1960-70’s)  Influence of Japanese manufacturers

9. Supply Sources: plants vendors ports Regional Warehouses: stocking points Field Warehouses: stocking points Customers, demand centers sinks Production/ purchase costs Inventory & warehousing costs Transportation costs Inventory & warehousing costs Transportation costs

10. Typical Supply Chain for a Manufacturer Typical Supply Chain for a Manufacturer Supplier Storage } Mfg.StorageDist.RetailerCustomer

11. Supplier } StorageService Customer Typical Supply Chain for a Service Typical Supply Chain for a Service

12. In the first half of the twentieth century industry replaced agriculture, in the second half of the twentieth century –“service” has replaced “manufacturing” -and right now, the knowledge industry is beginning to replace the others. −−George Kotzmetzk

13. 1-13 George Kotzmetzk

14. What is Knowledge? A collection of data is not information. A collection of information is not knowledge. A collection of knowledge is not wisdom. A collection of wisdom is not truth.

15. 1-15 CHAPTER 1 Introduction to Operations Management

16. 1-16 Operations Management The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing Figure 1.1

17. 1-17 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 Figure 1.2

18. 1-18 Steel production Automobile fabrication Home remodeling Retail sales Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing High percentage goods Low percentage service Goods-service Continuum Low percentage goods High percentage service Figure 1.3

19. 1-19 Food Processor InputsProcessing Outputs Raw VegetablesCleaning Canned vegetables Metal SheetsMaking cans WaterCutting EnergyCooking LaborPacking BuildingLabeling Equipment Table 1.2

20. 1-20 Hospital Process InputsProcessingOutputs Doctors, nursesExaminationHealthy patients HospitalSurgery Medical SuppliesMonitoring EquipmentMedication LaboratoriesTherapy Table 1.2

21. 1-21 Manufacturing or Service? Tangible Act

22. 1-22 Production of Goods vs. Delivery of Services  Production of goods – tangible output  Delivery of services – an act  Service job categories  Government  Wholesale/retail  Financial services  Healthcare  Personal services  Business services  Education

23. 1-23 Key Differences 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 6. Production and delivery 7. Quality assurance 8. Amount of inventory

24. 1-24 Manufacturing vs Service CharacteristicManufacturingService Output Customer contact Uniformity of input Labor content Uniformity of output Measurement of productivity Opportunity to correct Tangible Low High Low High Easy High Intangible High Low High Low Difficult Low quality problems High

25. 1-25  Operations Management includes:  Forecasting  Capacity planning  Scheduling  Managing inventories  Assuring quality  Motivating employees  Deciding where to locate facilities  And more... Scope of Operations Management

26. 1-26  The operations function  Consists of all activities directly related to producing goods or providing services

27. 1-27 Types of Operations Table 1.4 OperationsExamples Goods ProducingFarming, mining, construction, manufacturing, power generation Storage/TransportationWarehousing, trucking, mail service, moving, taxis, buses, hotels, airlines ExchangeRetailing, wholesaling, banking, renting, leasing, library, loans EntertainmentFilms, radio and television, concerts, recording CommunicationNewspapers, radio and television newscasts, telephone, satellites

28. 1-28 Figure 1.4

29. 1-29 Responsibilities of Operations Management Products & services Planning – Capacity – Location – – Make or buy – Layout – Projects – Scheduling Controlling/Improving – Inventory – Quality Organizing – Degree of centralization – Process selection Staffing – Hiring/laying off – Use of Overtime Directing – Incentive plans – Issuance of work orders – Job assignments – Costs – Productivity Table 1.6

30. 1-30 Key Decisions of Operations Managers  What What resources/what amounts  When Needed/scheduled/ordered  Where Work to be done  How Designed  Who To do the work

31. 1-31 Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment

32. 1-32 Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance

33. 1-33 Decision Making  Models  Quantitative approaches  Analysis of trade-offs  Systems approach

34. 1-34 Models A model is an abstraction of reality. – Physical – Schematic – Mathematical What are the pros and cons of models? Tradeoffs

35. 1-35 Models Are Beneficial  Easy to use, less expensive  Require users to organize  Systematic approach to problem solving  Increase understanding of the problem  Enable “what if” questions  Specific objectives  Consistent tool  Power of mathematics  Standardized format

36. 1-36 Quantitative Approaches Linear programming Queuing Techniques Inventory models Project models Statistical models

37. 1-37 Systems Approach “The whole is greater than the sum of the parts.” Suboptimization

38. 1-38 Pareto Phenomenon A few factors account for a high percentage of the occurrence of some event(s). 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?

39. 1-39 Business Operations Overlap Operations Finance Figure 1.5 Marketing

40. 1-40 Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal

41. 1-41 Trends in Business  Major trends  The Internet, e-commerce, e-business  Management technology  Globalization  Management of supply chains  Agility

42. 1-42 Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product Supply Chain Figure 1.7 Supply Chain: A sequence of activities And organizations involved in producing And delivering a good or service

43. 1-43 Stage of Production Value Added Value of Product Farmer produces and harvests wheat$0.15 Wheat transported to mill$0.08$0.23 Mill produces flour$0.15$0.38 Flour transported to baker$0.08$0.46 Baker produces bread$0.54$1.00 Bread transported to grocery store$0.08$1.08 Grocery store displays and sells bread$0.21$1.29 Total Value-Added$1.29 A Supply Chain for Bread

44. 1-44 Other Important Trends  Ethical behavior  Operations strategy  Working with fewer resources  Cost control and productivity  Quality and process improvement  Increased regulation and product liability  Lean production

45. 1-45 Value/Dimensions VD2 Performance=speed x quality x flexibility

46. 1-46Value/Definition VD1 Trek bike example