Group 1 Unit 1_ Introduction to Operations Management PDF

BSA 41 – Group 1: Bautista, Jerico Jimenez, Seanne Jersey Lopez, Vicire Clement Sarsoza, Joshua Caleb Tria, Angel Mary  Unit 1: Introduction to Operations Management Definition and Scope of Operation Management Operations Management is the administra...

BSA 41 – Group 1: Bautista, Jerico Jimenez, Seanne Jersey Lopez, Vicire Clement Sarsoza, Joshua Caleb Tria, Angel Mary  Unit 1: Introduction to Operations Management Definition and Scope of Operation Management Operations Management is the administration and oversight of business practices aimed at ensuring the highest efficiency and effectiveness in the production and delivery of goods and services. 1. Product Design and Development: Involves developing new products or improving existing ones to meet customer needs and market demands. 2. Process Design and Optimization: Refers to designing the processes and workflows that transform raw materials into finished products. 3. Supply Chain Management: Includes the coordination and management of the flow of goods, services, and information from suppliers to customers. 4. Quality Management: Focuses on maintaining and improving the quality of products and services. 5. Capacity Planning: Involves determining the production capacity needed to meet changing demands. 6. Inventory Management: Involves managing inventory levels to balance the costs of holding inventory with the need to meet customer demand. 7. Project Management: Deals with planning, executing, and closing projects. 8. Forecasting and Demand Planning: Predicting future customer demand to align production and inventory levels. 9. Facility Layout and Location: Involves planning the physical layout of facilities to optimize production flow and choosing locations that minimize costs and maximize market access. 10. Human Resources Management: Managing the workforce effectively, including scheduling, training, and ensuring employee productivity and satisfaction. 11. Maintenance and Reliability Management: Ensuring that equipment and facilities are maintained properly to minimize downtime and disruptions in production.  Historical Development of Operations Management Ancient Times – although “operations management” existed years after this era, they laid the foundation for the principles and techniques that have evolved over centuries. Pre-industrial Revolution 1.Craft Production – craftsmen or highly skilled workers directed apprentices in performing hand work on products with the use of simple, flexible tools to produce small quantities of customised goods. Industrial Revolution – was the transition from creating goods by hand to using machines (17th to Early 19th Century). Steam engines play a vital role in improving the transportation of goods and raw materials as well as providing a source of power to operate machines in factories. Ample of supplies coal and iron are used in generating power to those machines. 2. Division of Labor by Adam Smith – which broke production of goods into small, specialised tasks that were assigned to workers on production lines. 3. Factory System(mid 1800’s) – refers to the development of centralised factories or mills that produce goods on a mass scale. Inventors developed machines and techniques that helped the industry, especially the textile industry. Scientific Management (Late 19th to Early 20th Century) 4. Frederick Winslow Taylor is the father of scientific management, theory of management that analyses and synthesises workflows. He introduced these principles to improve work methods by planning, selecting, providing tools, training workers, and providing incentives for good performance. 5. Henry Ford – he employed scientific management in his car factory production line that led to mass production and lowered costs. His revolutionary innovation is a vehicle called Model T. (1908 Model T) These are things he implemented in the factory: - Mass production – system of production in which large volumes of standardised goods are produced by low-skilled or semi-skilled workers using highly specialised, and often costly, equipment - Interchangeable parts – parts of a product made to such precision that they do not have to be custom fitted. Introduced by Eli Whitney and Ford uses it for his production line. - Division of Labor – the breaking up of the production process into small tasks, so that each worker performs a small portion of the overall job. Human Relations Movement (early 20th Century) – a theory emphasised on the importance of the human element such as employee morale and motivation in the workplace. In short, it is the application of behavioural sciences to management theories. World War II and Post-War Era 6. Operations Research (OR) Operations research, born out of the military’s need for logistics and optimization during World War II, became a key component of operations management. OR uses mathematical models to solve complex decision-making problems. 7. Total Quality Management (TQM) Post-war Japan introduced Total Quality Management, emphasizing quality control and continuous improvement. Figures like W. Edwards Deming and Joseph M. Juran played a pivotal role in its development. Late 20th Century 8. Lean Manufacturing The concept of Lean Manufacturing, derived from the Toyota Production System (TPS), emerged in the late 20th century. It focuses on minimizing waste, optimizing processes, and improving efficiency. 9. Computerization and Technology The widespread adoption of computers and information technology revolutionized operations management. It led to automation, improved data analysis, and enhanced supply chain management. 21st Century 10. Supply Chain Management (SCM) Supply chain management gained prominence in the 21st century, emphasizing the end-to-end management of the flow of goods, information, and finances across the entire supply chain. 11. Sustainability and Environmental Concerns The 21st century saw a growing emphasis on sustainable operations management, addressing environmental and social responsibilities, as well as resource optimization. Future Trends 12. Industry 4.0 Industry 4.0, characterized by the integration of digital technologies, artificial intelligence, and the Internet of Things (IoT), is shaping the future of operations management. It promises increased automation, connectivity, and data-driven decision-making.  Strategic Role of Operations in Organizations 1. Cost Leadership This involves aiming to have the lowest costs or to be the most price-competitive in the market. It focuses on high volume of output as cheaply as possible, and suits mass production. One aspect of cost leadership arises from a business creating economies of scale. 2. Goods/Service Differentiation This focuses on more costly operations due to design, innovations and features that make the good or service different. Product differentiation distinguishes products in some way from its competitors. 3. Technology is the design, construction and/or application of innovative devices, methods and machinery upon operations processes. It plays an important role in operations management from administration, through to all operations processes. 4. Quality Expectation are a specific reference to how well designed, made and functional goods are, and the degree of competence with which services are organised and delivered. Managing quality expectations in both the manufacturing of products and the delivery of services is an essential role and goal of operations management. 5. Cost-based Competition is derived from determining break even point and then applying strategies to create cost advantages over competitors. In highly competitive markets, it can shape the operations function in competing businesses.  Competitive Advantages through Operations 1. Cost Leadership Operational Efficiency Economies of Scale Supplier Relationship 2. Quality and Reliability Quality Control Consistent Delivery Product Differentiation 3. Flexibility and Responsiveness Agile Manufacturing Customizability 4. Innovation Technology Integration Product Innovation 5. Sustainability Eco-Friendly Practices Regulatory Compliance References: https://www.nps.gov/teachers/classrooms/craftproduction.htm#:~:text=Backgr ound,and%20other%20goods%20by%20hand. https://www.econlib.org/library/Topics/College/divisionoflaborspecialization.ht ml#:~:text=Smith%20conceived%20of%20the%20process,in%20a%20smaller% 20slice%20of https://themba.institute/management-of-machines-and-materials/historical-dev elopment-of-operations-management/ https://ivypanda.com/essays/operations-management-9/ https://www.britannica.com/science/Taylorism https://www.historycrunch.com/cottage-industry-vs-factory-system.html#/ https://www.slideshare.net/slideshow/3history-of-operation-management/1874 0473#9 https://nicoletcollege.pressbooks.pub/operationalmanagement/chapter/human -relations-movement/