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CH 1

This document discusses operations management. It defines operations as the part of a business responsible for producing goods and services. It outlines the major categories of service jobs and notes similarities between manufacturing and services. It discusses key functions like marketing, finance, and operations and how they must interface. It also outlines some challenges in operations management and trends in the field.

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35 views

CH 1

This document discusses operations management. It defines operations as the part of a business responsible for producing goods and services. It outlines the major categories of service jobs and notes similarities between manufacturing and services. It discusses key functions like marketing, finance, and operations and how they must interface. It also outlines some challenges in operations management and trends in the field.

Uploaded by

manar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BA 636

Yarmouk
University
Business Adm.
Jordan – Irbid
2nd Semester 2019-2020
Operations is that part of a business organization
that is responsible for producing goods and/or
services.
Organizational Functions
Manufacturing and service are often different in terms
of what is done but quite similar in
terms of how it is done.
The majority of service jobs fall into these categories:
 Professional services (e.g., financial, health care, legal)
 Mass services (e.g., utilities, Internet, communications)
 Service shops (e.g., tailoring, appliance repair, car wash, auto repair/maintenance)
 Personal care (e.g., beauty salon, spa, barbershop)
 Government (e.g., Medicare, mail, social services, police, fire)
 Education (e.g., schools, universities)
 Food service (e.g., catering)
 Services within organizations (e.g., payroll, accounting, maintenance, IT, HR, janitorial)
 Retailing and wholesaling
 Shipping and delivery (e.g., truck, railroad, boat, air)
 Residential services (e.g., lawn care, painting, general repair, remodeling, interior design)
 Transportation (e.g., mass transit, taxi, airlines, ambulance)
 Travel and hospitality (e.g., travel bureaus, hotels, resorts)
 Miscellaneous services (e.g., copy service, temporary help)
Similarities
• This is because every aspect of business affects or is affected by operations.
• Operations and sales are the two-line functions in a business organization
• Among the service jobs that are closely related to operations are
• financial services
• Marketing Services
• Accounting Services
• Information Technology Services

Through learning about operations and supply chains, you will have a
much better understanding of the world you live in, the global
dependencies of companies and nations, some of the reasons that
companies succeed or fail, and the importance of working with others
Operations – Finance – Marketing
 Finance and operations management personnel cooperate by exchanging
information and expertise in such activities as the following:

1. Budgeting. Budgets must be periodically prepared to plan financial


requirements. Budgets must sometimes be adjusted, and performance
relative to a budget must be evaluated.

2. Economic analysis of investment proposals. Evaluation of alternative


investments in plant and equipment requires inputs from both operations
and finance people.

3. Provision of funds. The necessary funding of operations and the amount and
timing of funding can be important and even critical when funds are tight.
Careful planning can help avoid cash-flow problems.
Thus, marketing, operations, and finance must interface on product
and process design, forecasting, setting realistic schedules, quality
and quantity decisions, and keeping each other informed on the
other’s strengths and weaknesses.

Manufacturability
lead time
Collaboration
Exchange Of information
Other
Cooperative Decision Making
Product design
Reasons
Supply Chain Management
Sustainability and social responsibility
Operations mgmt. and Supportive Areas
Operations Manager If you are thinking of a career in operations
management, you can benefit by joining
Production Analyst one or more of the professional societies.
Production manager  APICS, Association for Operations
Management
Inventory manager
 American Society for Quality (ASQ)
Quality manager/analyst  Institute for Supply Management (ISM)
Production Supervisor  Institute for Operations Research and the
Supply Chain Manager Management Sciences (INFORMS)
 The Production and Operations Management
Social Media Product Manager Society (POMS)
 Process One or more actions that transform inputs into outputs.

Upper-management processes. These govern the operation of the entire


organization.
 Examples include organizational governance and organizational strategy.

Operational processes. These are the core processes that make up the value
stream.
 Examples include purchasing, production and/or service, marketing, and sales.

Supporting processes. These support the core processes. Examples include


accounting,
 human resources, and IT (information technology).
Business process management (BPM) activities include:
process design,
process execution, and
process monitoring.

Two basic aspects are


Managing Processes to Meet Demand and
Dealing With Process Variability
1. The variety of goods or services being offered. The greater the variety of
goods and services, the greater the variation in production or service
requirements.
2. Structural variation in demand. These variations, which include trends and
seasonal variations, are generally predictable. They are particularly important
for capacity planning.
3. Random variation. This natural variability is present to some extent in all
processes, as well as in demand for services and products, and it cannot
generally be influenced by managers.
4. Assignable variation. These variations are caused by defective inputs,
incorrect work methods, out-of-adjustment equipment, and so on. This type of
variation can be reduced or eliminated by analysis and corrective action.
Forecasting
Capacity planning
Locating facilities
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating and training employees
A number of other areas are part of, or support, the
operations function
 Purchasing has responsibility for procurement of materials,
supplies, and equipment.
 Industrial engineering is often concerned with scheduling,
performance standards, work methods, quality control, and
material handling.
 Distribution involves the shipping of goods to warehouses,
retail outlets, or final customers.
 Maintenance is responsible for general upkeep and repair of
equipment, buildings and grounds, heating and air-
conditioning; removing toxic wastes; parking; and perhaps
security.
E.g. Bicycle manufacturing Vs. Airline Service
In Both Cases A primary function of an
operations manager is to guide the system
by decision making.
Certain decisions affect
System Designing the System (System
Design)
Operating the System
Operations management professionals make key decisions that affect
the entire organization. These include the following:
 What: What resources will be needed, and in what amounts?
 When: When will each resource be needed? When should the work
be scheduled? When should materials and other supplies be
ordered? When is corrective action needed?
 Where: Where will the work be done?
 How: How will the product or service be designed? How will the work
be done (organization, methods, equipment)? How will resources be
allocated?
 Who: Who will do the work?
Models are often a key tool used by all decision makers.
Types Beneficial for
1.Physical 1.Efficient, less expensive
2.Schematic 2.Organize and quantify info
3.Mathematical 3.Better Understanding,
communicating, solving
4.If-then analysis
Decision Making Issues tools, Approaches

Quantitative Approaches
Performance Metrics
Analysis of Trade-Offs
Degree of
Customization
A Systems Approach
Establishing Priorities
The Industrial Revolution

Scientific Management

The Human Relations Movement

Decision Models and Management Science

The Influence of Japanese Manufacturers


Product and service technology refers to the
discovery and development of new products
and services.

Process technology
Information technology (IT)
Management Of Technology
Globalization And The Need For Global Supply Chains
Operations Strategy
Working with fewer resources & Revenue management
Process analysis and improvement
 Six Sigma
 total quality management (TQM)
 Process improvement
 Agility
 Lean production/Lean systems and JIT
Economic Conditions
Environmental
Innovating
Quality Problems
Concerns
Risk management Ethical Conduct
Cyber – Security The need to
Global Competition Manage Supply
Chain
FIVE PRINCIPLES for thinking ETHICALLY:

• The Utilitarian Principle: The good done by an


action or inaction should outweigh any harm it
causes or might cause. Drunk People
• The Rights Principle: Actions should respect and
protect the moral rights of others. Women,
Refugees..
• The Fairness Principle: Equals should be held to,
or evaluated by, the same standards. equal pay for
equal work.
• The Common Good Principle:
Actions should contribute to the common good of
the
community. noise abatement/cut.
• The Virtue Principle: Actions should be consistent
with certain ideal virtues. honesty, compassion,
ethical leadership: Ford, Intel, eBay, L’Oreal and UPS generosity,
1.The need to improve operations.
2.Increasing levels of outsourcing
3.Increasing transportation costs
4.Competitive pressures
5.Increasing globalization
6.Increasing importance of e-
business
7.The complexity of supply chains
8.The need to manage inventories
Elements of Supply Chain Management

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