MKT B370 Operations Management

1. MKT B370 Operations Management Group 2 Tutorial 1 C.S. Lai April 2013 B370 Operations Management

2. Your choice of language: English or Cantonese B370 Operations Management

3. Welcome! – today’s agenda • Introduction to the course 15 mins. • Ground rules, Q&A 15 mins. • Introduction to the subject 60 mins. • Production System • Goods vs. Services • Operation Strategy • TMAs 15 mins. • Q&A, Your Suggestions 15 mins. B370 Operations Management

4. About me… • BSc in Chemistry (CUHK) • MSc in Engineering Business Management (Warwick) • Global API Sourcing - multinational pharmaceutical company • Please don’t call me Lai Sir, call me CS or Mr. Lai • To contact me: • Tel: 9262 2636 (Sun20:00 – 22:00) • Please allow your caller’s ID to be displaced • Please leave a message in case the line is busy. • Please DON’T call during office hours (Mon. – Fri.). • Please DON’T call after 22:00, I should have slept already! • Email: t441653@ouhk.edu.hk B370 Operations Management

5. About your Course Coordinator • Dr. Matthew Yeung • Tel: 2768 6951 • Office: A826 • Email: myeung@ouhk.edu.hk B370 Operations Management

6. My role as tutor… • Help everyone of you to complete this course • Telephone tutoring, face-to-face sessions, TMAs, • OUHK expects me to be a manager (of students’ time), a well informed and sensitive counsellor and an effective administrator and NOT to “transmit knowledge to your students” • “Lecturing for more than one third of the tutorial time should be considered too much” B370 Operations Management

7. Please…. • Speak out • Ask questions • Share your thoughts • Make mistakes…and… • Enjoy! B370 Operations Management

8. One last thing… • Please ensure your phone doesn’t ring during the tutorial • If you need to use your phone, please use the area outside the classroom • Thanks! B370 Operations Management

9. Activity • What is Operations Management? Please find some examples that is within the scope of Operations Management. • Why do you study this course? • How can this course help you in your career? B370 Operations Management

10. What is Operations Management? Operations management (OM)is defined as the design, operation, and improvement of the systemsthat create and deliver the firm’s primary products and services. B370 Operations Management

11. What is OM? Design (unit 1 – Nature and context of OM, Strategy) (unit 2 – Project Management Operation and improvement Unit 3 – Quality Unit 4 – Product design and process selection Unit 5 – Capacity, Location Unit 6 – Job Design Supply Chain Unit 7 – Managing Supply and Demand Unit 8 – Inventory Management Unit 9 – Scheduling Unit 10 - Reengineering B370 Operations Management

12. Systematic Approach to Org. Processes Operations Business Education Career Opportunities Management Cross-Functional Applications Why Study Operations Management? B370 Operations Management

13. What is a Production System?Defined Aproduction systemis defined as a user of resources to transforminputs into some desired outputs. B370 Operations Management

14. Transformations • Physical--manufacturing • Locational--transportation • Exchange--retailing • Storage--warehousing • Physiological--health care • Informational--telecommunications B370 Operations Management

15. Activity • Primary Inputs • Resources • Primary Transformation Functions • Typical Desired Output • Please use the following examples, describe the Input-Transformation-Output Relationship: • McDonald (A service + manufacturing organization) • OUHK (A service organization) B370 Operations Management

16. What is a Service and What is a Goods? – Please discuss “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?) B370 Operations Management

17. Characteristics of Services • Customer participation • Simultaneous production and consumption • Time-perishable capacity • Site dictated by location of customers • Labour intensiveness • Intangibility • Difficulty in measuring output B370 Operations Management

18. Core services are basic things that customers want from products they purchase. Core Services Definition B370 Operations Management

19. Quality Operations Flexibility Speed Management Price (or cost Reduction) Core Services Performance Objectives B370 Operations Management

20. Value-Added ServicesDefined Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way. B370 Operations Management

21. Problem Solving Operations Information Sales Support Management Field Support Value-Added Service Categories B370 Operations Management

22. Examples – Core Service vs. Value Added Service • What would you expect if you: • Purchase a new ballpen? • Purchase a new TV? • Going to a fast-food restaurant? • Going to a fancy restaurant? B370 Operations Management

23. Historical Development of OM • Principles of Scientific Management. (1910s) • MRPII (1970s) • JIT and TQC. (1980s) • Manufacturing Strategy Paradigm. (1980s) • Service Quality and Productivity. (1970s) B370 Operations Management

24. Historical Development of OM (cont’d) • Total Quality Management and Quality Certification. • Business Process Reengineering. (1990s) • Supply Chain Management. (1990s) • Electronic Commerce. (2000s) B370 Operations Management

25. Operations Strategy Strategy Process Example Customer Needs More Product Corporate Strategy Increase Org. Size Operations Strategy Increase Production Capacity Decisions on Processes and Infrastructure Build New Factory B370 Operations Management

26. Competitive Dimensions • Cost • Product Quality and Reliability • Delivery Speed • Delivery Reliability • Coping with Changes in Demand • Flexibility and New Product Introduction Speed • Other Product-Specific Criteria B370 Operations Management

27. Cost Flexibility Delivery Quality Dealing with Trade-offs For example, if we reduce costs by reducing product quality inspections, we might reduce product quality. For example, if we improve customer service problem solving by cross-training personnel to deal with a wider-range of problems, they may become less efficient at dealing with commonly occurring problems. B370 Operations Management

28. Order Qualifiers and Winners • Order qualifiers? • They are the basic criteria that permit the firms products to be considered as candidates for purchase by customers. • Order winners? • They are the criteria that differentiates the products and services of one firm from another. B370 Operations Management

29. Service Breakthroughs • A brand name car can be an “order qualifier” • Repair services can be “order winners” • Examples: Warranty, Roadside Assistance, Leases, etc. B370 Operations Management

30. Imagine you run an airline in HK or elsewhere. Identify your order winners and qualifiers B370 Operations Management

31. Customer Needs New : Old product : product Competitive dimensions & reqs. Quality, Dependability, Speed, Flexibility, and Price Enterprise capabilities Operations & Supplier capabilities Technology Systems People R&D CIM JIT TQM Distribution Support Platforms Financial management Human resource management Information management Operations Strategy Framework B370 Operations Management

32. Steps in Developing a Manufacturing Strategy • 1. Segment the market according to the product group. • 2. Identify product requirements, demand patterns, and profit margins of each group. • 3. Determine order qualifiers and winners for each group. • 4. Convert order winners into specific performance requirements. B370 Operations Management

33. What is Productivity?Defined Productivity is a common measure on how well resources are being used. In the broadest sense, it can be defined as the following ratio: Outputs Inputs B370 Operations Management

34. Total Measure Productivity Total Measure Productivity = Outputs Inputs or = Goods and services produced All resources used B370 Operations Management

35. Partial Measure Productivity • Partial measures of productivity = • Output or Output or Output or Output Labor Capital Materials Energy B370 Operations Management

36. Multifactor Measure Productivity • Multifactor measures of productivity = • Output . Labor + Capital + Energy or • Output . Labor + Capital + Materials B370 Operations Management

37. Example of Productivity Measurement • You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms. • Which productivity measure should be used? • Answer: Could be classified as a Total Measure or Partial Measure. • Is productivity increasing or decreasing? • Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = 0.23. So, productivity is decreasing slightly. B370 Operations Management

38. Current Issues in OM • Effectively consolidating the operations resulting from mergers. • Developing flexible supply chains to enable mass customization of products and services. • Managing global supplier, production and distribution networks. B370 Operations Management

39. Current Issues in OM (cont’d) • Increased “commoditization” of suppliers. • Achieving the “Service Factory”. • Achieving good service from service firms. B370 Operations Management

40. About submitting TMA • By Post or by Online Submission. • Send your TMA well before the due dates. • You should submit each assignment by the cut-off date. Late submissions cannot be accepted. • If you send by post, enclose the TMA form, acknowledge card with stamp • Put down my CORRECT address • DON’T use registered mail. I NORMALLY IGNORE REGISTERED MAIL! B370 Operations Management

41. TMAs • Keep a copy of each assignment • TMA should arrive MY MAILBOX on / before the due date • 7 days extensions will NOT normally be granted, unless you have GOOD reasons and with prior permission.(Do you know the official procedure of requesting extension?) • OUHK does not accept postal loss as a reason for extension B370 Operations Management

42. Reminders… • TMA 1 due on June 11, 2013. • Next meeting – May 12, 2013 @ OUHK • Project Management B370 Operations Management

43. To download this presentation:http://alumni.cuhk.edu.hk/~cslai Enjoy the course…and…Good LuckSee you next time B370 Operations Management