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Operations Management (OM) is defined as the design, operation, and improvement of the systems that create (transform inputs into outputs) Each part of the organization, not just operations, must design and operate processes and deal with quality, technology and staffing issues. OM is a process-based approach to management.

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Richard Javier
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45 views18 pages

Chard

Operations Management (OM) is defined as the design, operation, and improvement of the systems that create (transform inputs into outputs) Each part of the organization, not just operations, must design and operate processes and deal with quality, technology and staffing issues. OM is a process-based approach to management.

Uploaded by

Richard Javier
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Key Topics

Define Operations Management

Give examples (Inputs Processes Outputs)


Service operations vs. goods production Current Challenges in Operations Management Quality attributes for services and products Total quality management tools What is supply chain management

The Big Picture!


Marketing
Facility Design Process Choice Demand Forecasting Product Management Capacity Advertising Distribution Quality Market Research Business Strategy Sales Management

Operations Management

JIT Leadership

Customer Satisfaction
Risk Management

Planning & Control


Technology Management Inventory Management

Finance
Investment Analysis Cash Flow Valuation

Motivation Product Design Group Dynamics/Teams Product Pricing

Systems

Networking Telecommunications

Organizational Effectiveness

Information Systems

Product Costing

Budgeting

Organizational Behavior

Accounting

Operations Management
Production: creation of goods and services Operations management (OM) is defined as the design,

operation, and improvement of the systems that create (transform inputs into outputs) and deliver the firms primary products and services
Each part of the organization, not just operations, must

design and operate processes and deal with quality, technology and staffing issues

Processes and Operations


Internal and external customers

Inputs
Workers Managers Equipment Facilities Materials Services Land Energy

Processes and operations


1

3
5

Outputs
Services Goods

Information on performance

Small Group Activity


Identify the inputs, processes, and outputs

for:

Saint Michaels College Fletcher Allen Hospital Ben and Jerrys Ice Cream

Growth in the Goods and Services Sectors

100

Millions of Workers

Services
80 $4,000

Services (Billions)

60 40

$3,000 $2,000

Goods Production
20 $1,000 1986

Goods Production
1992 1996 1998 1998 2000 1984 1988 1990 1994 2000

1992

1984

1986

1988

1990

1994

1996

Options for Increasing Contribution


Marketing Option Current Sales $100,000 Sales Revenue : +50% $150,000 -120,000 30,000 -6,000 24,000 -6,000 18,000 Finance & Accounting Option Finance Costs: -50% $100,000 -80,000 20,000 -3,000 17,000 -4,250 12,750 OM Option Production Costs: -20% $100,000 -64,000 36,000 -6,000 30,000 -7,500 22,500

Cost of Goods Sold -80,000 Gross Margin Finance Costs Net Margin Taxes @ 25% Contribution 20,000 -6,000 14,000 -3,500 10,500

Significant Events in Operations Management

Continuum of Characteristics
More like a manufacturing organization More like a service organization

Physical, durable product Output that can be inventoried Low customer contact Long response time Regional, national, or international markets Large facilities Capital intensive Quality easily measured

Intangible, perishable product Output that cannot be inventoried High customer contact Short response time Local markets Small facilities Labor intensive Quality not easily measured

New Challenges in OM
From
Local or national focus Batch shipments Low bid purchasing Lengthy product

To
Global focus Just-in-time Supply chain partnering Rapid product

development
Standard products Job specialization

development, alliances
Mass customization Empowered employees,

teams

Competitive Priorities
Cost Quality
Time

Flexibility

1. 2. 3. 4. 5. 6. 7. 8.

Low-cost operations High-performance design Consistent quality Fast, Reliable delivery On-time delivery New development speed Customization Volume flexibility

Operating system capabilities and strengths required to serve customers and outperform competitors

Southwest Airlines Low Cost Competitive Advantage

Small Group Activity


What makes a quality good?

What makes a quality service?

Dimensions of Quality for Goods


Operation Reliability & durability Conformance Serviceability Appearance Perceived quality

Quality

Service Quality Attributes


Reliability Tangibles Understanding Security
1995 Corel Corp.

Responsiveness Competence Access Courtesy

Credibility

Communication

Seven Tools for TQM

Supply-Chain Management
Supply Chain Management is primarily concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed in the right quantities, to the right locations and at the right time, and so as to minimize total system cost subject to satisfying service requirements. SCM, is a strategic weapon that seeks to synchronize a firms functions and those of its suppliers to match the flow of materials, services, and information with customer demand

Integrated Supply Chain


Phase 1: Independent supply-chain entities
Suppliers Purchasing Production Distribution Customers

Phase 2: Internal integration

Suppliers

Purchasing Production Distribution

Customers

Internal supply chain Materials management department

Phase 3: Supply-chain integration

Suppliers

Internal supply chain

Customers

Integrated supply chain

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