Welcome MGT329

1. Welcome MGT329

2. Operations Management:MGT329 Professor: Jeff Street Office: BA 434 Phone: X4184 Cell: (770) 654-2056 e-mail: strejeff@isu.edu

3. Course Books Operations and Supply Management, 12th Edition, by F. Robert Jacobs, Richard B. Chase, and Nicholas J. Aquilano. The Goal, by Eliyahu M. Goldratt and Jeff Cox

4. Grading The grade received in the course will be based on: Participation/Homework (25%) Exam I (25%) Exam II (25%) Final Exam (25%)

5. Operations Decision Making

6. Some questions to be addressed in this course include: How does the customer fit into operations strategy? How is globalization affecting business and operations strategies? What effect are new technologies having on the utilization of an organization�s resources?

7. Some questions to be addressed in this course include: How has the concept of quality management changed, and how does it affect operations? Why is continuous improvement in the operations management function necessary for an organization to remain competitive?

8. Why Study Operations Management?

9. Development of OM as a Field

10. Current Issues Speeding up the time it takes to get new products and services into production. Developing flexible production systems to enable mass customization of products and services. Managing global production/supply networks. Developing and integrating new production technologies into existing production systems.

11. Current Issues Achieving high quality quickly and keeping it up in the face of restructuring. Managing a diverse workforce. Conforming to environmental constraints, ethical standards, and government regulations.

12. Overview:Introduction to Operations Management What is Operations Management Why Study Operations Management? Operations Decision Making Managing Transformations Service or Good? Closed vs. Open System Perspectives Development of OM as a Field Current Issues

13. What is Operations Management? Operations is a functional area of business devoted to the management of an organization's resources to create products or services. The set of resources includes an organization's know-how, facilities, work-force, materials, and equipment. Operations Management issues permeate all levels of an organization's decision making from the long-term strategic to the tactical to the day to day operations.

14. Operations management is concerned with the design, operation, and improvement of the production system that creates the firm�s primary products and services. [Even Mocha Madness, Kinkos, and Portneuf Medical Center are production systems]

15. Do you have an example of experience in operations?

16. Managing Transformations�The Production System� People Plants Parts Processes Planning and Control

17. Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications

18. Competitive Priorities Quality (including Service) Delivery (speed, place) Flexibility (customized) Cost or Price

19. Core services are basic things that customers want from products (or services) they purchase.

20. Core Services Performance Objectives(Competitive Priorities)

21. Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way.

22. Value-Added Service Categories

23. Value-Added Factory Services Information - provide critical data to market Problem Solving � troubleshooting ability Sales Support � demonstrate the offering Field Support � replace/replenish stock, spares

24. Service or Good? �If you drop it on your foot, it won�t hurt you.� (Good or service?) �Services never include goods and goods never include services.� (True or false?)

25. In closing, let�s consider McDonald�s Fast-Food Restaurant Service or Manufacturing? The company certainly manufactures tangible products Why would we consider McDonald�s a service business?

26. McDonalds Transformation? Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications

27. Front and Back Office

29. Operations and Supply Strategy Chapter 2

30. Operations Decision Making

31. Operations Strategy and Competitiveness - Overview Operations Strategy A Framework for Operations Strategy in Manufacturing Operations Strategy in Services Meeting the Competitive Challenge Productivity Measurement

32. Operations Strategy

33. Strategy Process

35. Hierarchy of Strategy Process

36. Operations Strategy --Formulation Company Achieve unified purpose via information; team involvement in planning and implementing change.

37. Operations Strategy --Formulation Customers Get to know; team up with next and final customer. Continual, rapid improvement in lead time, quality, cost, flexibility and variability.

38. Operations Strategy --Formulation Competitors Get to know the competition and world-class leaders.

39. Operations Priorities Cost Quality Delivery Speed Flexibility Service Delivery Reliability (from globalization) Coping with Changes in Demand (from Web) Flexibility and New Product Introduction Speed

40. A Framework for Operations Strategy

42. competitive priorities

43. Dealing with Trade-offs

44. �World-Class� Manufacturing or Service World-class operations no longer view cost, quality, speed of delivery, and even flexibility as tradeoffs. They have become order qualifiers.

45. Distinctive competency �A strength that sets a business apart from its competition� McDonald�s Disney World or Disney Land Southwest or Frontier Airlines Intel Corporation UPS

46. Strategy Begins with Priorities Consider the case of a personal computer manufacturer. 1. How would we segment the market according to product group? Personal use Small business Large Corporations 2. How would we identify product requirements, demand patterns, and profit margins for each group?

47. How do we identify order winner and order qualifiers for each group? quality cost delivery flexibility service

48. How do we convert order winners into specific performance requirements?

49. Service can be an �order winner�

50. Again, What is Operations Management? Operations (Management) is the functional area of business devoted to the management of an organization's resources to create products or services.

51. What is Productivity? A measure of the effective use of resources, usually expressed as the ratio of output to input. Output Productivity = Input

52. What factors affect the productivity of a business? work methods capital quality training technology management

53. Total measure Productivity = Outputs Inputs or = Goods and services produced (value of) All resources used (value of) [Productivity versus Throughput]

57. Example

58. 10,000 units/500hrs = 20 units/hour  (10,000 unit*$10/unit) (500hrs*$9/hr) What do these calculations tell us? More importantly -- What don�t they tell us? Example--Labor Productivity

59. Applying Productivity Figures You�ve just told your boss that the plant labor productivity is better than that of a plant in a related business.What does this really mean?

60. Productivity measures need to be tracked over time need to include all possible inputs are difficult to compare between companies or industries do not (directly) include measures of timeliness or quality [th********] [sc*** and re****]

61. What methods can be used to improve productivity? develop productivity measures measurement is necessary to control the operation look at overall productivity develop methods for achieving productivity improvements establish reasonable goals for improvement measure and communicate improvements to both customers and employees

62. Solution for Problem #1

63. Solution to Problem #2

64. Solution to Problem #2