Presentation on theme: "1-1 Operations Management Operations Management is: The management of systems or processes that create goods and/or provide services Operations Management."— Presentation transcript:
1 1-1 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
2 1-2 Value-Added Process The operations function involves the conversion of inputs into outputs Inputs Land Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback Value added
3 1-3 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.
4 1-4 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
5 1-5 Key Differences 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity
6 1-6 Key Differences 6. Production and delivery 7. Quality assurance 8.
Amount of inventory 9. Evaluation of work
7 1-7
Goods vs Service CharacteristicGoodsService Customer contactLowHigh Uniformity of inputHighLow Labor contentLowHigh Uniformity of outputHighLow OutputTangibleIntangible Measurement of productivityEasyDifficult Opportunity to correct problemsHighLow InventoryMuchLittle EvaluationEasierDifficult PatentableUsuallyNot usual
8 1-8 Automobile assembly, steel making Home remodeling, retail sales Automobile Repair, fast food Goods-service Continuum Computer repair, restaurant meal Song writing,
software development GoodsService Surgery, teaching
9 1-9 Manufacturing or Service? Tangible Act
10 1-10 Types of Operations 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
11 1-11 Challenges of Managing Services Service
jobs are often less structured than manufacturing jobs Customer contact is higher Worker skill levels are lower Services hire many low-skill, entry-level workers Employee turnover is higher Input variability is higher Service performance can be affected by worker’s personal factors
12 1-12 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
13 1-13 Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment
14 1-14 Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance
15 1-15 Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities Supply chain management And more... Scope of Operations Management
16 1-16 The Organization The Three Basic Functions Organization Finance Operations Marketing
17 1-17 Business
Operations Overlap Operations Finance Marketing
18 1-18 Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal
19 1-19 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
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1-20 Trends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Outsourcing Agility Ethical behavior
21 1-21 Management Technology Technology: The application of scientific discoveries to the development and improvement of goods and services Product and service
technology Process technology Information technology
22 1-22 Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product
Supply Chain Supply Chain: A sequence of activities And organizations involved in producing And delivering a good or service
23 1-23 Other Important Trends Working with fewer resources
Revenue management Process analysis and improvement Increased regulation and product liability Lean production