Subject:
Operations Management
Chapter I: Overview of Operations Management and Productivity
Overview and Concepts of Operations Management, Heritage of Operations Management. Operations in Service Sector, Concept of Productivity and Variables and its measurement. Objectives of production / operation management
Production
Creation of goods and services
Operations Management
Operations management
Set of Activities that create value in the form of goods & services through the transformation of
inputs to outputs
Operations Management is:
The management of systems or processess that create goods and /or provide services
Operations Management Affects,
Companies ability to compete Nations ability to compete internationally
Organizations
Three basic functions
Operations
Finance
Marketing
Transformation
Value Added
INPUT
Land Labor Capital Information
OUTPUT
TRANSFORMATION Goods Services
Feedback
Control
Feedback
Feedback
Operations Interfaces
Industrial Engineering
Maintenance
MIS
Distribution
Operations
Public Relations
Purchasing
Personnel
Accounting
Transformations in different forms
Physical -- manufacturing Location- - transportation
Exchange -- retailing
Storage -- warehousing Physiological -- health care Informational -- telecommunications
Operation Functions in a Bank
Commercial Bank
Operations
Teller Scheduling Check Clearing Collection Transaction Processing Facilities design/layout Vault operation Maintenance Security
Finance
Investment Securities Real Estate
Marketing
Loans
Commercial Industrial Financial Personal Mortgage
Accounting
Auditing
Trust Department
Operations Functions in a Airline
Airline
Operations
Ground Support Equipment Maintenance Ground Operations Facility maintenance Catering Flight operations Crew Scheduling Flying Communications Dispatching
Finance/Accounting
Accounting Accounts payable Accounts Receivable General Ledger Finance Cash Control International exchange
Marketing
Traffic Administration
Reservation Schedules Tariffs(pricing) Sales Advertising
Manufacturing
Operations
Facility construction & maintenance Production & Inventory Control Scheduling, material control Quality assurance & control Supply-chain management Manufacturing Tooling, fabrication, assembly design. Product development & design Detailed product specifications Industrial engineering Efficient use of machines, space and personal Process Analysis Development & installation of production tools and equipment
Finance/Accounting
Disbursement/Credits Accounts payable Accounts Receivable General Ledger Fund Management Money Market International exchange Capital requirements Stock issue Bond issue & recall
Marketing
Sales Promotion
Sales Advertising Market Research
Input Process - Output
What do Operations Managers do?
What are operations jobs? and Where?
Heritage of Operations Management
Heritage of Operations Management Contd
Division of labor (Adam Smith 1776 and Charles Babbage 1852) Standardized parts (Whitney 1800)
Scientific Management (Taylor 1881)
Coordinated assembly line (Ford/Sorenson/Avery 1913)
Gantt charts (Gantt 1916)
Motion study (Frank and Lillian Gilbreth 1922) Quality control (Shewhart 1924; Deming 1950) Computer (Atanasoff 1938) CPM/PERT (DuPont 1957) Eli Whitney Frank and Lillian Gillbreth
F. W. Taylor
1995 Corel Corp.
The Heritage of Operations Management Contd
Material requirements planning (Orlicky 1960)
Computer aided design (CAD 1970)
Flexible manufacturing system (FMS 1975) Baldrige Quality Awards (1980)
Computer integrated manufacturing (1990)
Globalization(1992) Internet (1995)
Make them all alike! Edward Deming
1995 Corel Corp.
Henry Ford
Types of Operations
Operations
Goods Producing Storage/Transportation
Examples
Farming, mining, construction, manufacturing, power generation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Retailing, wholesaling, banking, renting, leasing, library, loans Films, radio and television, concerts, recording Newspapers, radio and television newscasts, telephone, satellites
Exchange
Entertainment
Communication
Definitions of Services
Services are deeds, processes, and performances - Valarie A. Zeithaml and Mary Jo Bitner A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between customer and service employees and / or physical resources or goods and / or systems of the service provider, which are provided as solutions to customer problems. - Christian Gronroos
Definition of Service Firms
Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives. - James Fitzsimmons
Characteristics of Services
Intangibility
Heterogeneity
Simultaneous Production and Consumption
Perishability
Differences between Goods & Services
Usually Intangible Produced and consumed simultaneously Unique Customer interaction Inconsistent product definition Knowledge based Dispersed
Differences between Goods & Services
Attribute of Goods (Tangible)
Product can be resold Inventoried Measurable Quality Distinction Production, Selling Transportable Site of facility Easy to automate Revenue from tangible product
Attributes of Services (Intangible)
Reselling is Unusual Most can not be Extremely difficult Selling is part of service Provider Customer contact Difficult Revenue from intangible product
Goods
Automobile
Services
Computer
Installed Carpet Fast food meal Restaurant meal/ Auto repair Hospital care Advertising agency/Investment management
Teaching/Consulting Services
Counseling
100
75
50
25
25
50
75
100
Goods and Services
Automobile Computer Installed carpeting Fast-food meal Restaurant meal/auto repair Hospital care Advertising agency/ investment management Consulting service/ teaching Counseling
100%
|
75
|
50
|
25
|
0
|
25
|
50
|
75
|
100%
|
Percent of Product that is a Good
Percent of Product that is a Service
Emerging Challenges in OM
From
Local or National focus Batch shipments
To
Global Focus Just in Time
Low bid purchasing
Lengthy product development Standard products Job specialization
Supply chain partnering
Rapid product development Mass customization Empowered employees, Teams
Concept of Productivity
Productivity is the ratio of outputs (goods or services) divided by the inputs (resources, such as labor and capital) Operations Managers job is to enhance this ration of outputs to inputs.
Reducing inputs while keeping output constant
OR
Increasing output while keeping inputs constant
Thank You
