Lecture 1: Introduction To Operations Management PDF

LECTURE 1 INTRODUCTION TO OPERATIONS MANAGEMENT INTRODUCTION, PRODUCTION OF GOODS VERSUS PROVIDING SERVICES WHY LEARN OPERATIONS ABOUT OPERATIONS MANAGEMENT is responsible for producing th...

LECTURE 1 INTRODUCTION TO OPERATIONS MANAGEMENT INTRODUCTION, PRODUCTION OF GOODS VERSUS PROVIDING SERVICES WHY LEARN OPERATIONS ABOUT OPERATIONS MANAGEMENT is responsible for producing the goods or Learning Outcomes: providing the services offered by the 1. Interpret the meaning of Operations organization Management and Supply Chain 2. Compare the similarities and differences MARKETING between production and service Is responsible for assessing consumer operations wants and needs, and selling and 3. Explain the importance of learning promoting the organization’s goods or operations management. services OPERATIONS OPERATIONS Operations is that part of a business organization that is responsible for OPERATIONS MANAGEMENT producing goods and/or services is the management of systems or processes that create goods and/or provide services GOODS Goods are physical items that include raw SUPPLY CHAIN materials, parts, subassemblies such as is the sequence of organizations—their motherboards that go into computers, and facilities, functions, and activities—that final products such as cell phones and are involved in producing and delivering a automobiles product or service SERVICES FACILITIES: Services are activities that provide some Warehouses combination of time, location, form, or Factories & processing centers psychological value. Offices, distribution centers, and retail outlets THREE BASIC FUNCTIONS OF BUSINESS ORGANIZATION FUNCTIONS: Purchasing Inventory management, quality assurance Scheduling, distribution, customer service SIMPLE PRODUCT SUPPLY CHAIN FINANCE is responsible for securing financial resources at favorable prices and allocating those resources throughout the SUPPLY CHAIN organization, as well as budgeting, EXTERNAL PARTS analyzing investment proposals, and Equipment providing funds for operations Supplies Provide raw materials INTERNAL PARTS 2. You will have a much better understanding Performing work on products of the world you live in Supplying operations with parts and 3. Learn some of the reasons why companies materials succeed or fail, Performing services 4. Understands the global dependencies of companies and nations EXAMPLE OF A SUPPLY CHAIN 5. Learn the importance of working with others. LECTURE 2 CAREER OPPORTUNITIES People who work in the operations field should have a skill that includes: LO 2: IDENTIFY DIFFERENCES BETWEEN PRODUCTION AND SERVICE OPERATIONS PEOPLE SKILLS To have strong people skills means to be PRODUCTION OF GOODS able to communicate clearly, effectively Production of goods results in a and positively with those around you. tangible output Those who have strong people skills anything that we can see or touch know how to keep their calm and always Example: show respect. automobile, eyeglasses, a golf ball, a refrigerator ✓ political awareness ✓ Mentoring ability PROVIDING SERVICES ✓ Collaboration, negotiation, and Implies an act communication skills Example: A physician’s examination, TV KNOWLEDGE SKILLS and auto repair Knowledge is theoretical. It's an Professional services financial, intellectual understanding of information, health care, legal). knowing the right answers. Skills are Personal care (e.g., beauty salon, practical. They are the actions people take spa, barbershop). to put their knowledge into practice LO 3: EXPLAIN THE IMPORTANCE OF ✓ credibility and good decision making LEARNING ABOUT OPERATION ✓ product and/or service knowledge MANAGEMENT. ✓ financial and accounting skills ✓ project management skills Why Learn About Operations Management? 1. Because every aspect of business affects or is affected by operations CAREER OPPORTUNITIES is a structured approach to improving the 1. Operations Manager processes organizations use to get work 2. Production Analyst done, serve their customers and generate 3. Production Manager business value 4. Office Manager activities include process design, process 5. Store Manager execution, and process monitoring 6. Service Manager PROCESS DESIGN SAMPLE JOB DESCRIPTIONS process of creating and improving systems that convert inputs into outputs. involves understanding how work is done within an organization and then designing and implementing ways to improve it. PROCESS EXECUTION when the target process is executed, or realized, becoming the actual process. PROCESS MONITORING compares the performances of systems, LECTURE 3 equipment, and software and how they integrate and work within a whole PROCESS MANAGEMENT process PROCESS TWO BASIC ASPECT OF BP consists of one or more actions that transform inputs into outputs Managing a Process to Meet Demand output matches demand BUSINESSES ARE COMPOSED OF Process Variation MANY INTERRELATED PROCESSES FOUR BASIC SOURCES OF VARIATION UPPER-MANAGEMENT PROCESSES organizational governance and 1. The variety of goods or services organizational strategy being offered OPERATIONAL PROCESSES 2. Structural variation in demand purchasing, production and/or service, include trends and seasonal marketing, and sales variations SUPPORTING PROCESSES 3. Random variation accounting, natural variability human resources, and IT (information technology) 4. Assignable variation caused by defective inputs, BUSINESS PROCESS incorrect work methods, out-of- ❖ Business processes, large and small, are adjustment equipment composed of a series of supplier– customer relationships BUSINESS PROCESS MANAGEMENT (BPM) LECTURE 4 Offices, distribution centers, and retail outlets SCOPE OF OPERATIONS MANAGEMENT FUNCTIONS: Purchasing Management people are involved in: Inventory management, quality assurance Scheduling, distribution, customer service Product And Service Design Process Selection PRIMARY FUNCTION OF OPERATIONS Selection And Management of MANAGER IS TO: Technology guide the system by decision making, certain decisions affect the design of the Design Of Work Systems system, and others affect the operation of Location Planning the system Facilities Planning has the ultimate responsibility for the Quality Improvement of Products creation of goods or provision of services and Services SYSTEM DESIGN involves decisions that relate to system The operations function includes capacity, the geographic location of many interrelated activities, such as: facilities, arrangement of departments and 1. Forecasting placement of equipment within physical structures, product and service planning, 2. Capacity Planning and acquisition of equipment. 3. Scheduling 4. Managing inventories SYSTEM OPERATION 5. Assuring quality involves management of 6. Motivating employees personnel, inventory planning and 7. Deciding where to locate facilities control, scheduling, project management, and quality assurance tactical and operational LECTURE 5 decisions MANAGING THE SUPPLY CHAIN TO ACHIEVE SUPPORT TO OPERATIONS SCHEDULE, COST, AND FUNCTION QUALITY GOALS PURCHASING Has responsibility for procurement SUPPLY CHAIN of materials, supplies, and is the sequence of organizations equipment. Close contact with their facilities, functions, and operations is necessary to ensure activities that are involved in correct quantities and timing of producing and delivering a product purchases. The purchasing or service. department is often called on to evaluate vendors for quality, FACILITIES: reliability, service, price, and Warehouses ability to adjust to changing Factories & processing centers demand. Purchasing is also  involved in receiving and What: What resources will be inspecting the purchased goods needed, and in what amounts? When: When will each resource be INDUSTRIAL ENGINEERING needed? When should the work be is often concerned with scheduling, scheduled? When should materials performance standards, work and other supplies be ordered? methods, quality control, and When is corrective action needed? material handling. Where: Where will the work be done? DISTRIBUTION How: How will the product or involves the shipping of goods to service be designed? How will the warehouses, retail outlets, or final work be done (organi- zation, customers. methods, equipment)? How will resources be allocated? MAINTENANCE Who: Who will do the work? is responsible for general upkeep and repair of equipment, buildings GENERAL APPROACHES TO and grounds, heating and air- DECISION MAKING conditioning; removing toxic wastes; parking; and perhaps MODELS security. An abstraction of reality; a simplified representation of something. LECTURE 6 Common statistical models include OPERATIONS MANAGEMENT descriptive statistics such as the AND DECISION MAKING mean, median, mode, range, and standard deviation, as well as OPERATIONS MANAGER random sampling, the normal planner/decision maker distribution, and regression daily concerns include costs equations. (budget), quality, and schedules Examples of models include (time) automobile test tracks and crash exerts considerable influence tests; formulas, graphs and charts; over the degree to which the balance sheets and income goals and objectives of the statements; and financial ratios organization are realized Operations management professionals make a number of key decisions that affect the entire organization. These include the following:  LECTURE 7 PERFORMANCE METRICS OPERATION TODAY All managers use metrics to manage LEARNING OBJECTIVE and control operations. There are Describe current issues in business that many metrics in use, including those impact operations management. related to profits, costs, quality, productivity, flexibility, assets, OPERATIONS TODAY inventories, schedules, and forecast Advances in information technology and global competition have had a major accuracy influence on operations management While the Internet offers great potential for business organizations, the potential as well as the risks must be clearly understood in order to determine if and how to exploit this potential. In many cases, the Internet has altered the way companies compete in the marketplace ELECTRONICBUSINESS/E-BUSINESS/E- COMMERCE involves the use of the Internet to transact business e-business is changing the way business organizations interact with their customers and their suppliers  consumer–business transactions such as buying online or requesting information 3. QUALITY PROBLEMS relates to product design and TECHNOLOGY testing, oversight of suppliers, risk is the application of scientific assessment, and timely response to discoveries to the development and potential problems. improvement of goods and services 4. RISK MANAGEMENT Managing risks starts with PRODUCT AND SERVICE identifying risks, assessing TECHNOLOGY vulnerability and potential damage Refers to the discovery and (liability costs, reputation, demand), development of new products and and taking steps to reduce or share services risks PROCESS TECHNOLOGY 5. COMPETING IN A GLOBAL Refers to methods, procedures, and ECONOMY equipment used to produce goods and Low labor costs in third-world provide services countries have increased pressure to reduce labor INFORMATION TECHNOLOGY (IT) refers to the science and use of 6. ENVIRONMENTAL CONCERNS computers and other electronic Concern about global warming and equipment to store, process, and send pollution has had an increasing information. effect on how businesses operate. Includes electronic data processing, the use of bar codes to identify and SUSTAINABILITY track goods, obtaining point-of-sale using resources in ways that do not information, data transmission, the harm ecological systems that support Internet, e-commerce and e-mail human existence. KEY ISSUES FOR TODAY’S 7. ETHICAL CONDUCT BUSINESS OPERATIONS Ethical behavior is an integral part of good management practice 1. ECONOMICCONDITIONS Ethics is a standard of behavior that Condition of the economy brought guides how one should act in various by COVID 19 Pandemic situations 2. INNOVATING 8. THE NEED TO MANAGE WELL Finding new or improved products THE SUPPLY CHAIN or services are only two of the SUPPLY CHAIN many possibilities that can provide is the sequence of organizations— value to an organization. their facilities, functions, and Innovations can be made in activities—that are involved in processes, the use of the Internet, producing and delivering a product or or the supply chain that reduce service costs, increase productivity expand markets, or improve customer FACILITIES AND FUNCTIONS service. (PREVIOUS LECTURES)