Industrial Systems Engineering Department

ENIN 814: Operations Management

(Fall 2024 )

Introduction and Course Overview

Dr. Sharfuddin Ahmed Khan

[email protected]
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Today’s Agenda

• Welcome Note
• Approach to Course
• Course Description, Course Content, and Text Book
• Student Evaluation Plan
• Course Rules
• How to get Good Grades in this Course (Smart Learning)

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Course Description, Course Content, and Text Book
Course Description:

This course introduces engineering managers to operations management.

Topics of the course include process design and facility layout, product and
service design, management of quality, strategic capacity planning, material
requirement planning and enterprise resource planning, lean production and
JIT, project management, supply chain management, inventory management,
job and staff scheduling.

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Course Content
Text Book
Topic # Topics
Reference
1 Introduction to Operation Management Chapter 1
2 Product and Service Design Chapter 4
3 Strategic Capacity Planning Chapter 5
4 Process design and facility layout Chapter 6
5 Management of Quality Chapter 9
6 Inventory management Chapter 11
7 Material Requirement Planning and Enterprise Resource Planning Chapter 13
8 Lean Production and Just in Time Chapter 14
9 Project Management Chapter 17
10 Outsourcing and Off-shoring -

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Text Book and Reference Material
Textbook
• William J. Stevenson, Mehran Hojati, James Cao, Hyden Mottaghi, and Behrouz Bakhtiari (2023).
Operations Management. 8th Canadian Edition. McGraw Hill.

Recommended Readings:
• Material from any relevant book and/or journal articles related to Operations Management.
• Supplementary notes will also be provided and used. Notes will generally be available on UR Courses.

Other Resources:
• In some lecture, MS Excel will be used to solve some problems.

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Student Evaluation Plan
Assignment/Activity Due Date Comments
Quizzes Will be announced later Individual
Case Study Will be announced later Group of 3-4 students
Midterm October 23, 2024 Individual
Term Paper Will be announced later Group of 3-4 students
Final Exam December 18, 2024 Individual

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Students’ Assessment
Assessment Tool(s) Weight (%)
*Quizzes 15
**Case Study 10
**Midterm 25
**Term Paper 20
***Final Exam 30
Total 100

* There will be NO MAKE-UP for quizzes.

** You have to write the midterm exam, submit term paper and case study to pass the course.
*** You have to pass the final exams to pass the course.

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Teaching Approach / Instructional Methods:
A Word of Advice
• Be on time to class and to clarify the concept and topic, ask as many questions as you can.
• Never ever think that your question is “dumb”, “basic”, “does not make sense”, etc. and I
will be annoyed. Always remember, “The more you ask, the more you learn”.

My Way of Teaching this Course

• I will first give an explanation of the topic in hand using examples, power point slides, case
study, and class discussion and then solve problems.
• I always prefer and encourage students to participate in class by asking questions and give
their opinion, therefore please participate in class discussions.
• I am always available for my students and you can visit my office during office hours and /
or anytime by appointment.

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Academic Misconduct and Use of Generative AI
Academic Integrity
• See UofR Calender Policy 5.14.2.1 and 5.14.2.2

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Use of Generative AI
Generative AI tools, such as ChatGPT, have become powerful resources for enhancing learning and
creativity. In this course, students are encouraged to use these tools responsibly to complement their
studies. AI can assist in brainstorming, summarizing concepts, generating ideas, and providing
alternative perspectives on complex topics. However, it is important to note the following guidelines:

• Ethical Use: AI tools should be used to support your learning, not to replace your own effort. All
assignments must reflect your own understanding, critical thinking, and originality.
• Academic Integrity: Plagiarism or submission of AI-generated work as your own is a violation of
academic integrity. Always properly acknowledge and attribute the use of AI tools where applicable.
• Critical Thinking: While AI can provide useful insights, it is essential to critically evaluate and verify
the information it produces. AI may not always provide accurate or up-to-date information, so use it
as a supplementary resource, not a primary source of knowledge.
• Skill Development: The primary goal of this course is to develop your analytical, creative, and
critical thinking skills. While AI can assist, personal engagement with the material is key to achieving
deeper learning.
By adhering to these principles, students can use AI as a beneficial tool in their academic journey while
maintaining the integrity and purpose of their education. 10
Smart Learning Trends
Educators Tell Us We Learn & Understand

• 10% of what we hear

• 15% of what we see

• 20% of what we both see & hear

• 40% of what we discuss with others

• 80% of what we experience directly or practice

• 90% of what we attempt to teach others

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Any Questions Before We Move On ? ? ?

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Topic # 1: Introduction to Operation Management

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 Chapter 1

Introduction to
Operations
Management
 Learning Objectives
• Define the term operations management
• Identify the three major functional areas of organizations and describe how
they interact.
• Describe the scope of operations management, including differentiating
between design and planning/control decisions.
• Compare production of goods and services.
• Discuss the operations manager’s job.
• Describe key aspects of operations management decision making.
• Briefly describe the historical evolution of OM
• Identify major trends that affect operations management.

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Learning Objectives
Service Operations Examples

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 Chapter Outline
• What is operations management (OM)?
• Three basic functions within organizations
• The scope of operations management
• Differentiating goods and services
• Operations manager’s job
• Operations managers and decision making
• The historical evolution of operations management
• Major trends

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 What is Operations Management?
OM is the management of processes that create goods
and/or provide services.

• Companies use OM to improve:

– Efficiency (operating to minimize cost and time)
– Effectiveness (achieving intended goals: quality & timeliness)

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 What is Operations Management?
Detail the following OM activities for each company

OM Activities Airline company Bicycle factory (goods)

(services)
Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating employees
Where to locate facilities

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 Why Study Operations Management?
Opportunity!
• A large percentage of a company’s expenses occur in
OM area (more efficient operations = more profits).
• A large number of all jobs are in OM area (purchasing,
quality, planning, scheduling, inventory, etc.).
• Activities in all other areas( finance, human resources,
marketing, ) are interrelated with OM activities.
• Operations innovations lead to marketplace and strategic
benefits (Toyota Production System, Dells’ direct
shipping of personal computers).

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 Careers and Professional Certifications in OM
• Supply Chain Management Association (SCMA)

• Canadian Institute of Traffic and Transportation (CITT)

• Canadian Supply Chain Sector Council (CSCSC)

• American Production and Inventory Control Society (APICS), now known as

the Association for Supply Chain Management

• American Society for Quality (ASQ)

• Project Management Institute (PMI)

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 Functions Within Organizations
• A typical organization (manufacturing or service) has three basic functions.

• Operations: creates goods and services.

• Finance: provide funds and the economic analysis of investment proposals.

• Marketing: assess customer wants and needs and communicate them to others.

Figure 1-1 The three basic functions of an organization and flows between them.

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 Three Basic Functions Interact
• The functions must interact to achieve the goals and objectives of the
organization.
• Each functional area makes an important contribution to organizational success.

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 Three Basic Functions : Airline
This shows how the operations function relates to an airline company.
Note: this is an example of how operations applies to a service based business.

Airline Company

Finance/
Marketing
Operations Accounting

Flight Ground Facility

Catering
Operations Support Maintenance

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 Operations Function

Figure 1-2 The operations function involves the conversion of inputs into outputs.
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 Types of Operations
Operations Examples
Goods Producing Farming, mining, construction
,
manufacturing, power generation
Services
Warehousing, trucking, mail
Storage/Transportation
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
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Transformation Process at a Food Processor

Table 1-2
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 Transformation Process at a Hospital

Table 1-2

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The Goods-Service Continuum

Figure 1-3

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 Operations Interfaces
Operations
interfaces with
a number of
supporting
functions.

Figure 1-4

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The Scope of Operations Management

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 The Scope of Operations Management
Decision area Basic question Chapter

Forecasting What will the demand be? 3

Product/ service design What customers want? How to improve products/services? 4
Capacity How much capacity will be needed? 5
Process What processes should be used? 6
Layout What is the best arrangement for the departments? 6
Work/Job Design How to improve work methods? 7
Quality How to define quality? How to improve it? 9
Supply Chain Management Which supplier to choose? 11
Inventory Management How much to order? 12
Aggregate planning How much capacity will be needed over the medium term? 13
JIT systems How to coordinate production and purchasing? 15

Scheduling How to schedule jobs, staff? 16

Table 1-3 Which decision is design type and which is planning/control type?
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 Goods vs. Services
Differences Goods Services
(Produce a car) (Teach a class)

Output Tangible Intangible

Customer contact Low High
Uniformity of input High Low
Labour content Low High
Uniformity of output High Low
Measurement of Easy Difficult
productivity
Quality assurance Easy Difficult

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 Goods or Service?

Tangible Act

Most systems are a blend of both good & service.

Service sector accounts for > 79% of jobs in Canada.

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 Goods vs. Services in Canada
Percentage of total labour force by industry.

Figure 1-5

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 The Operations Manager’s Job
The operations manager must coordinate the use of resources through the management activities of planning,
organizing, directing, and controlling.
Planning Organizing
Capacity Degree of centralization
Location Departments
Mix of products Subcontracting
Production process Suppliers
Layout Staffing
Controlling Directing
Inventory Control Scheduling
Quality control Issuance of work orders
Production pace Job assignments
Motivation Purchasing
Cost control Logistics
Table 1-4
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 The Systems Approach

Figure 1-6
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Operations Managers and Decision Making

Models

Quantitative
Ethics
techniques

Establishing Analysis of trade-

Priorities offs

Systems approach

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 Models
A model is an abstraction of reality. Used to
support the decision process.

Physical

Mathematical Schematic

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 Quantitative Approaches
• Linear programming
• Queuing techniques
• Inventory techniques
• Project techniques
• Statistical techniques

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 Analysis of Trade-Offs

• Decision on amount of inventory to stock

– Increased cost of holding inventory

vs.

• Level of customer service

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 Establishing Priorities
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?

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 Ethical Issues

Financial
statements

Hiring/firing Worker
workers safety

Product
Community
safety

Environment Quality

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The Historical Evolution of OM

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Trends in Business

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 Supply Chain
A sequence of activities and organizations involved in producing and
delivering a good or service.

Figure 1-8

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 Chapter Summary (1)
• Operations management is responsible for planning and coordinating the use of the
organization’s resources to convert inputs into outputs.

• The operations function is one of three primary functions of organizations; the other two are
marketing and finance. The operations function is present in both service- and goods-
producing organizations.

• Operations decisions involve design decisions and planning/control decisions. Design

decisions relate to capacity planning, product design, processes design, layout of facilities, and
selecting locations for facilities. Planning/control decisions relate to quality assurance,
production planning, scheduling and control, inventory management, and project management.

• Service differs from goods production in customer contact and labour content, lack of
inventories, variation in inputs and outputs, and difficulties in productivity measurement and
quality assurance.
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 Chapter Summary (2)
• Operations managers plan, organize, control, and direct the operations of an
organization.

• They use models, quantitative techniques, trade-off analysis, systems approach,

priorities, and ethics in decision making.

• Operations management evolved through craft, mass, and lean production

systems.

• Major trends currently are e-commerce, technology, globalization, supply chains,

and sustainability.

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 Learning Checklist
• Define the term operations management and describe what an operation manager might
do.

• Identify the three major functional areas of organizations and describe how they interact.

• Differentiate between design and operations decisions.

• Compare goods versus services.

• Describe key aspects of the operations managers job and their role and involvement in
decision making.

• Briefly describe the historical evolution of operations management.

• Identify current trends that affect operations management.

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Dr. Sharfuddin Ahmed Khan
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