Lecture_01

1
Introduction to
Operations
Management
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All

Operations Management
▪ Operations Management is:
The management of systems or processes
that create goods and/or provide services
▪ Operations Management affects:

▪ Companies’ ability to compete
▪ Nation’s ability to compete internationally
▪ OM is a Management Function
▪ Plans, organizes, coordinates and controls
1-2
The Organization
The Three Basic Functions
1-3
Business Operations Overlap
Operations
Marketing Finance
1-4
Operations Interfaces
Industria
Engineerin
l
g
Maintenanc
Distributio e
n
Purchasin Public
g Operation Relation
s s
Lega
l
Personne
l
Accountin MI
g S
1-5
Transformation Process
The operations function involves the conversion of

inputs into outputs
1-6
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. (For instance: Dominous)
▪ Product packages can make a company
more competitive.
1-7
Manufacturing vs. Service
Organization
▪ Manufacturing Organizations primarily
produce a tangible product and typically have
low customer contact.
▪ Service Organizations primarily produce an
intangible product, such as ideas,
assistance, or information, and typically have
high customer contact.
General Motors’ greatest return on capital does not come from
selling cars but rather from post-sales parts and service
There is much overlap between them
1-8
Manufacturing vs. Service
Organization
1-9
Goods-service Continuum
Goods Service
Surgery, teaching
Song writing, software development
Computer repair, restaurant meal
Automobile Repair, fast food
Home remodeling, retail sales
Automobile assembly, steel making
1-10
Historical Evolution of Operations
Management
Operations management did not emerge as a formal field of
study until the late 1950s and early 1960s
▪ 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
▪ Influence of Chinese manufacturers
1-11
Modern OM Environment
▪ Lean Concept: JIT, TQM, SCM
▪ Enterprise Resource Planning (ERP)
▪ Customer Relationship Management (CRM)
▪ Cross-functional Decision Making
1-12
Home Task 1
⮚ Take a particular food product and show

its transformation process (input-
process-output)
⮚ Draw the input-output model for Hospital

service
⮚ Key differences between manufacturing

and service industry
1-13
Food Processor
Input Processin Output

s g s
Raw Vegetables Cleaning Canned
Metal Sheets Making cans vegetables
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment
1-14
Hospital Process
Input Processin Output

s g s
Doctors, Examination Healthy
Hospital
nurses Surgery patients
Medical Supplies Monitoring
Equipment Medication
Laboratories Therapy
1-15
Key Differences
Manufacturing Vs. Service
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
1-16
Key Differences
Manufacturing Vs. Service
6. Production and delivery
7. Quality assurance
8. Amount of inventory
9. Evaluation of work
10. Ability to patent design
1-17
Scope of Operations Management
▪ Operations Management includes:
▪ Forecasting
▪ Capacity planning
▪ Scheduling
▪ Managing inventories
▪ Assuring quality
▪ Motivating employees
▪ Deciding where to locate facilities
▪ Supply chain management
▪ And more . . .
1-18
Types of Operations
Operation Example
s Producing
Goods s
Farming, mining, construction,
manufacturing, power generation
Storage/Transportation Warehousing, trucking, mail
service, moving, taxis,
hotels, airlines
buses,
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
1-19
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
1-20
Learning Objectives
▪ Define the term operations management
▪ Identify the three major functional areas of
organizations and describe how they
interrelate
▪ Compare and contrast service and
manufacturing operations
▪ Differentiate between design and operation
of production systems
▪ Describe the key aspects of operations
management decision making
1-21

Lecture_01

Uploaded by

Copyright:

Available Formats

Lecture_01

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lecture_01

Uploaded by

Copyright:

Available Formats

1

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All

▪ Operations Management affects:

The Three Basic Functions

The operations function involves the conversion of

Song writing, software development

Computer repair, restaurant meal

Automobile Repair, fast food

Home remodeling, retail sales

Automobile assembly, steel making

⮚ Take a particular food product and show

⮚ Draw the input-output model for Hospital

⮚ Key differences between manufacturing

Input Processin Output

Input Processin Output

You might also like