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Lecture on Operations Management

Lecture on Operations Management. www.AssignmentPoint.com. Learning Objectives. Meaning of Operations Management Meaning of Process Differences and Similarities of Manufacturing and Services Trends in Operations Management Operations Management across the Organization.

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Lecture on Operations Management

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  1. Lecture on Operations Management www.AssignmentPoint.com www.assignmentpoint.com

  2. Learning Objectives • Meaning of Operations Management • Meaning of Process • Differences and Similarities of Manufacturing and Services • Trends in Operations Management • Operations Management across the Organization www.assignmentpoint.com

  3. Operations Management • Operation include activities directly related to producing goods and services. • Operation is a function or system that transforms inputs into outputs of greater value. • Management involves planning, organizing, staffing, directing and improving people to achieve the goal. www.assignmentpoint.com

  4. Operations Management • Operations Management can be defined as planning, organizing, staffing, controlling and directing the production system and also designing operating and improvement of the production systems. • Operations Management deals with processes that produces goods and services that people use every day. www.assignmentpoint.com

  5. Operations Management • Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is the management of resources, the distribution of goods and services to customers, and the analysis of queue systems. www.assignmentpoint.com

  6. Operations Management • Operations Management is the management of systems or processes that create goods or/and provide services. • Operations Management is the business function responsible for planning, coordinating, and controlling the resources needed to produce a company’s products and services. www.assignmentpoint.com

  7. Operations Management • Operations Management refers to the direction and control of the process that transform inputs into products and services. • Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services. www.assignmentpoint.com

  8. Systematic Approach to Org. Processes Operations Business Education Career Opportunities Management Cross-Functional Applications Why Study Operations Management? www.assignmentpoint.com

  9. Reasons for Studying Operations Management • A business education is incomplete without an understanding of modern approaches to managing operations. Every organization produces some product or service so students must be exposed to modern approaches for doing this effectively. • Operations management provides a systematic way of looking at organizational process. Operations management uses analytical thinking to deal with real-world problems. It sharpness our understanding of the world around us. www.assignmentpoint.com

  10. Reasons for Studying Operations Management • Operations management presents interesting career opportunities. These can be in direct supervision of operations or in staff position in operations management specialties such as supply chain management and quality assurance. • The concepts and tools of operations management are widely used in managing other functions of a business. All managers have to plan work, control quality, and ensure productivity of individuals under their supervision. www.assignmentpoint.com

  11. How is operations relevant to my major? Accounting Information Technology Management “As an auditor you must understand the fundamentals of operations management.” “IT is a tool, and there’s no better place to apply it than in operations.” “We use so many things you learn in an operations class—scheduling, lean production, theory of constraints, and tons of quality tools.” www.assignmentpoint.com

  12. How is operations relevant to my major? Economics Marketing Finance “It’s all about processes. I live by flowcharts and Pareto analysis.” “How can you do a good job marketing a product if you’re unsure of its quality or delivery status?” “Most of our capital budgeting requests are from operations, and most of our cost savings, too.” www.assignmentpoint.com

  13. OM Across the Organization • Most businesses are supported by the functions of operations, marketing, and finance • The major functional areas must interact to achieve the organization goals • Marketing is not fully capable of meeting customer needs if they do not understand what operations can produce • Human resources must understand job requirements and worker skills www.assignmentpoint.com

  14. OM Across the Organization • Finance cannot judge the need for capital investments if they do not understand operations concepts and needs. • Information systems enables the information flow throughout the organization. • Accounting needs to consider inventory management, capacity information, and labor standards. www.assignmentpoint.com

  15. Marketplace Corporate Strategy Finance Strategy Operations Strategy Marketing Strategy Operations Management People Plants Parts Processes Materials & Products & Customers Services Planning and Control Input Output Production System Operations Decision Making www.assignmentpoint.com

  16. OM Responsibilities • Line management Responsibilities • Management Decisions can be divided into three broad areas: 1. Strategic (long-term) decisions 2. Tactical (intermediate-term) decisions 3. Operational planning and control (short-term) decisions. www.assignmentpoint.com

  17. Quality Costs Productivity – – – Responsibilities of Operations Management Planning Organizing Capacity Degree of centralization – – Location Process selection – – Products & services Staffing – Make or buy – Hiring/laying off – Layout – Use of Overtime – Projects – Directing Scheduling – Incentive plans – Controlling/Improving Issuance of work orders – Inventory – Job assignments – www.assignmentpoint.com

  18. Key Decisions of Operations Managers • What What resources/what amounts • When Needed/scheduled/ordered • Where Work to be done • How Designed • Who To do the work www.assignmentpoint.com

  19. Operations as a Transformation Process • INPUT • Material • Machines • Labor • Management • Capital • OUTPUT • Goods • Services TRANSFORMATION PROCESS Feedback & Requirements • 1-19 www.assignmentpoint.com

  20. Types of Transformation • Physical--manufacturing • Locational--transportation • Exchange--retailing • Storage--warehousing • Physiological--health care • Informational--telecommunications www.assignmentpoint.com

  21. Five P’s of Transformation Process • People • Plants • Parts • Process • Planning and Controlling www.assignmentpoint.com

  22. Input – Transformation – Output Relationships for Typical Systems

  23. Input – Transformation – Output Relationships for Typical Systems

  24. Functions • Accounting • Distribution • Engineering • Operations • Finance • Human resources • Marketing Types of Organizations Bank Construction Government Health care Manufacturing Retailing Transportation Wholesaling • ----------------- • ----------------- • ----------------- • ----------------- • ----------------- • ----------------- • ----------------- • ----------------- Operations Management as a Function Figure 1.4 www.assignmentpoint.com

  25. Operations as technical core Operations Marketing Finance and accounting Human resources Outside suppliers • 1-25 www.assignmentpoint.com

  26. Business Information Flow www.assignmentpoint.com

  27. Types of OM Decisions • Part 1 : Strategic Choices:Operations managers help to determine the company’s global strategies and competitive priorities and how best to design process that fit with its competitive priorities. • Part 2 : Process:Process are fundamental to all activities that produce goods or services. Operations managers make process decisions about the types of work to be done in house, the amount of automation to use, and methods of improving existing systems. www.assignmentpoint.com

  28. Types of OM Decisions • Part 3 : Quality :Quality issues underlie all process and work activity. Operations managers help establish quality objectives and seek ways to improve the quality of the firm’s products and services. • Part 4 : Capacity, Location, Layout:The types of decisions in this category often require long-term commitments. Operation managers help determine the system’scapacity (Capacity); the location of news facilities including global operations (Location); and the organization of departments and a facility’s physical layout (Layout) www.assignmentpoint.com

  29. Types of OM Decisions • Part 5: Operating Decision: Operations manager help to coordinate the various parts of the internal and external supply chain (Supply-Chain Management), forecast demand (Forecasting), manage inventory (Inventory Management), and control output and staffing levels over time (Aggregate Planning). www.assignmentpoint.com

  30. Scientific Computers TQM & Quality Management (MRP) Certification Moving Assembly JIT/TQC & Business Process Line Automation Reengineering Hawthorne Manufacturing Electronic Studies Strategy Enterprise Operations Service Quality Global Supply Research and Productivity Chain Mgmt. Historical Underpinnings OM's Emergence as a Field Development of OM as a Field www.assignmentpoint.com

  31. Historical Events in Operations Management www.assignmentpoint.com

  32. Historical Events in Operations Management (cont.) www.assignmentpoint.com

  33. Historical Events in Operations Management (cont.) www.assignmentpoint.com

  34. Historical Events in Operations Management (cont.) www.assignmentpoint.com

  35. Services Intangible, perishable product Service cannot be inventoried High customer contact Short response time Labor intensive Manufacturing Physical, durable product Product can be inventoried Low customer contact Longer response time Capital intensive Differences between Manufacturing and Service Organizations www.assignmentpoint.com

  36. Services Small Facilities Quality not easily measured Local Markets Manufacturing Large facilities Quality easily measured Regional, national or international markets Differences between Manufacturing and Service Organizations www.assignmentpoint.com

  37. The Range From Services to Products www.assignmentpoint.com

  38. Similarities between Services and Manufacturing • All use technology • Both have quality, productivity, & response issues • All must forecast demand • Each will have capacity, layout, and location issues • All have customers, suppliers, scheduling and staffing issues www.assignmentpoint.com

  39. Service - Manufacturing • Manufacturing often provides services • Services often provides tangible goods • Some organizations are a blend of service/ manufacturing/ quasi-manufacturing (QM) organizations • QM characteristics include • Low customer contact & Capital Intensive www.assignmentpoint.com

  40. Trends in OM Several business trends are currently having a great impact on operations management. These are • Growth of the service sector • Productivity Changes • Global Competitiveness • Quality, time and technological change • Environmental, ethical and diversity issues www.assignmentpoint.com

  41. Trends in OM • Service sector growth:The service sector of the economy is significant. Services may be divided into three main groups. These are • Government • Wholesale and retail sales • Other services (transportation, public utilities, communication, health etc) The share of the workforce in service jobs is well above 60 percent in Britain, Canada, France and Japan. www.assignmentpoint.com

  42. Trends in OM • Service sector growing to 50-80% of non-farm jobs- See Global competitiveness • Demands for higher quality • Huge technology changes • Time based competition • Work force diversity www.assignmentpoint.com

  43. Trends in OM • Productivity Changes:Productivity is the value of outputs (goods and services) produced divided by the value of input resources (wages, costs of equipment and the like) used. The value of output can be measured by what the customer pays or simply by the number of units produced or customers served. The value of inputs can be measured by their costs or simply by the number of hours worked. www.assignmentpoint.com

  44. Trends in OM • Global Competitiveness:Strong global competition affects industries everywhere. Most products today are global composites of material and services from throughout the world. Polo Shirt is sewn in Hondurus from cloth cut in the United states. www.assignmentpoint.com

  45. Trends in OM • Competition based on quality, time and technology:Another important trend is that more firms are competing on the basis of time; filling orders earlier than the competitors, introducing new products and services quickly, and reaching the market first. Another increasing important factor in operations management is accelerating technological change. www.assignmentpoint.com

  46. Trends in OM • Ethical, workforce diversity and environmental issues:Business face more ethical quandaries than ever before, intensified by an increasing global presence and global technological change. Environment issues, such as toxic wastes, poisoned drinking water, poverty, air quality and global warming are getting more emphasis. www.assignmentpoint.com

  47. Today’s OM Environment • Customers demand better quality, greater speed, and lower costs • Companies implementing lean systems concepts – a total systems approach to efficient operations • Recognized need to better manage information using ERP and CRM systems • Increased cross-functional decision making www.assignmentpoint.com

  48. Achieving Cross-Functional Coordination • A unified strategy should be developed by management as a starting point, giving each department a vision of what it must do to help fulfill the overall organizational strategy. • The organizational structure and management hierarchy can be redesigned to promote cross-functional coordination. www.assignmentpoint.com

  49. Achieving Cross-Functional Coordination • The goal-setting process and reward systems can encourage cross-functional coordination. • Improvements to information systems also can boost coordination. Information must in part be tailored to the needs of each functional manger. www.assignmentpoint.com

  50. Achieving Cross-Functional Coordination • Informal social systems are another device that can be used to encourage better understanding across functional lines. • Employee selection and promotion also can help foster more cross-functional coordination by encouraging broad perspective and common goals. www.assignmentpoint.com

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