Chap001 - Introduction to Operations Management.ppt
- 1. 1-1 Introduction to Operations Management CHAPTER 1 Introduction to Operations Management
- 2. 1-2 Introduction to Operations Management Operations Management The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing Figure 1.1
- 3. 1-3 Introduction to Operations Management 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 Feedback Feedback Value added Figure 1.2
- 4. 1-4 Introduction to Operations Management 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
- 5. 1-5 Introduction to Operations Management Manufacturing or Service? Tangible Act
- 6. 1-6 Introduction to Operations Management 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
- 7. 1-7 Introduction to Operations Management 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
- 8. 1-8 Introduction to Operations Management Manufacturing vs Service Characteristic Manufacturing Service 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
- 9. 1-9 Introduction to Operations Management Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . . . Scope of Operations Management
- 10. 1-10 Introduction to Operations Management The operations function Consists of all activities directly related to producing goods or providing services
- 11. 1-11 Introduction to Operations Management Types of Operations Table 1.4 Operations Examples Goods Producing Farming, mining, construction, manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites
- 12. 1-12 Introduction to Operations Management U.S. Manufacturing vs. Service Employment 0 20 40 60 80 100 45 50 55 60 65 70 75 80 85 90 95 00 Year Percent Year Mfg. Service 45 79 21 50 72 28 55 72 28 60 68 32 65 64 36 70 64 36 75 58 42 80 44 46 85 43 57 90 35 65 95 32 68 00 30 70 Figure 1.4
- 13. 1-13 Introduction to Operations Management 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
- 14. 1-14 Introduction to Operations Management 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
- 15. 1-15 Introduction to Operations Management Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment
- 16. 1-16 Introduction to Operations Management Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance
- 17. 1-17 Introduction to Operations Management Decision Making Models Quantitative approaches Analysis of trade-offs Systems approach
- 18. 1-18 Introduction to Operations Management Models A model is an abstraction of reality. – Physical – Schematic – Mathematical What are the pros and cons of models? Tradeoffs
- 19. 1-19 Introduction to Operations Management 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
- 20. 1-20 Introduction to Operations Management Quantitative Approaches • Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models
- 21. 1-21 Introduction to Operations Management Systems Approach “The whole is greater than the sum of the parts.” Suboptimization
- 22. 1-22 Introduction to Operations Management 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?
- 23. 1-23 Introduction to Operations Management Business Operations Overlap Operations Finance Figure 1.5 Marketing
- 24. 1-24 Introduction to Operations Management Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal
- 25. 1-25 Introduction to Operations Management 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 Table 1.7
- 26. 1-26 Introduction to Operations Management Trends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Agility
- 27. 1-27 Introduction to Operations Management 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
- 28. 1-28 Introduction to Operations Management Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $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
- 29. 1-29 Introduction to Operations Management 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