Chapter 1: Learning Objectives
You should be able to:
Define the term operations management
Identify the three major functional areas of organizations and describe how they interrelate
Identify similarities and differences between production and service operations
Describe the operations function and the nature of the operations manager’s job
Summarize the two major aspects of process management
Explain the key aspects of operations management decision making
Briefly describe the historical evolution of operations management
Characterize current trends in business that impact operations management
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Introduction to Operations ManagementMcGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.You should be able to:Define the term operations managementIdentify the three major functional areas of organizations and describe how they interrelateIdentify similarities and differences between production and service operationsDescribe the operations function and the nature of the operations manager’s jobSummarize the two major aspects of process managementExplain the key aspects of operations management decision makingBriefly describe the historical evolution of operations managementCharacterize current trends in business that impact operations management1-*Student SlidesWhat is operations?The part of a business organization that is responsible for producing goods or servicesHow can we define operations management?The management of systems or processes that create goods and/or provide services1-*Student SlidesGoods are physical items that include raw materials, parts, subassemblies, and final products.AutomobileComputerOvenShampooServices are activities that provide some combination of time, location, form or psychological value.Air travelEducationHaircutLegal counsel1-*Student SlidesSuppliers’suppliersDirectsuppliersProducerDistributorFinalCustomersSupply Chain – a sequence of activities and organizations involved in producing and delivering a good or serviceStudent Slides1-*InputsLandLaborCapitalInformationOutputsGoodsServicesTransformation/ConversionProcessControlMeasurementand FeedbackMeasurementand FeedbackMeasurementand FeedbackValue-AddedFeedback = measurements taken at various points in the transformation processControl = The comparison of feedback against previously established standards to determine if corrective action is needed.Student Slides1-*Degree of customer contactUniformity of inputLabor content of jobsUniformity of outputMeasurement of productivityProduction and deliveryQuality assuranceAmount of inventoryEvaluation of workAbility to patent designStudent Slides1-*The operations function includes many interrelated activities such as:ForecastingCapacity planningFacilities and layoutSchedulingManaging inventoriesAssuring qualityMotivating employeesDeciding where to locate facilitiesAnd more . . .The scope of operations management ranges across the organization.1-*Student SlidesThe Operations Function consists of all activities directly related to producing goods or providing services.A primary function of the operations manager is to guide the system by decision making.System Design DecisionsSystem Operation DecisionsStudent Slides1-*Every aspect of business affects or is affected by operationsMany service jobs are closely related to operationsFinancial servicesMarketing servicesAccounting servicesInformation servicesThere is a significant amount of interaction and collaboration amongst the functional areasIt provides an excellent vehicle for understanding the world in which we liveStudent Slides1-*Operations managerSupply chain managerProduction analystSchedule coordinatorProduction managerIndustrial engineerPurchasing managerInventory managerQuality managerStudent Slides1-*Most operations decisions involve many alternatives that can have quite different impacts on costs or profitsTypical operations decisions include:What: What resources are needed, and in what amounts?When: When will each resource be needed? When should the work be scheduled? When should materials and other supplies be ordered?Where: Where will the work be done?How: How will he product or service be designed? How will the work be done? How will resources be allocated?Who: Who will do the work?1-*Student SlidesIndustrial RevolutionScientific ManagementHuman Relations MovementDecision Models and Management ScienceInfluence of Japanese ManufacturersStudent Slides1-*Economic conditionsInnovatingQuality problemsRisk managementCompeting in a global economy1-*Student SlidesIn the past, organizations did little to manage the supply chain beyond their own operations and immediate suppliers which led to numerous problems:Oscillating inventory levelsInventory stockoutsLate deliveriesQuality problemsStudent Slides1-*