Operations Management BUS ADM 370

1. Operations ManagementBUS ADM 370 Dr. Xiang (Sh-iang) Fang

2. Introduction of Instructor • Bachelor and Master’s degree in Systems Engineering of Xiamen University of China • Ph.D. in Operations Research of Case Western Reserve University in Cleveland, OH

3. Course Overview • Four main modules: forecasting, system design, inventory mgmt., project mgmt. • Final Score: • Homework (25%) : 3 homework in total • Exam 1 (25%) • Exam 2 (25%) • Exam 3 or Final Exam (whichever is higher) (25%) • Class attendance & participation ( extra bonus points) • Final Letter Grade • A (>=95%), A- (>=90% & <95%), B+ (>= 85% & <90%), B, B-, C+, C, C-, D, F (<40%)

4. Introduction to Operations Management • What is Operations? • What is Operations Management? • Why study Operations Management? • Trends in Operations Management

5. What is Operations? • Operations • processes that produce goods and services • Processes • fundamental activities that organizations use resources to transform inputs into goods and services

6. 2 3 1 4 5 Operations and Processes Internal and external customers • Inputs • Raw materials • Labor • Equipment • Facilities • Information • Energy • Land • Outputs • Services • Products Processes and operations Information on performance

7. Outputs Inputs Processing Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment Food Process

8. Inputs Processing Outputs Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy Hospital Process Patients

9. What is Operations Management? • Operations Management (OM) • The management of systems or processes that create goods and/or provide services • OM decisions include • Product and service design • Capacity planning • Managing inventories • Assuring quality • Forecasting • Scheduling….

10. Continuum of Types of Firms 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

11. Why Study OM? • OM is a key function of every firm • OM is linked to the other key functions in any firm • To understand how to produce goods and services • Operations are extremely costly and provide a great opportunity for improving profit and market share

12. Three Key Functions Operations Finance Marketing

13. Jobs in Operations Management • Entry-level positions • production supervisor • purchasing staff • inventory analyst • production analyst • quality specialist • Upper-management positions • VP of manufacturing • VP of operations (service organization), COO • over % of manufacturing firms’ CEOs have an operations background 45

14. Operations Manager Skills • Quantitative analysis • Solve problems • Knowledge of information systems • Manage large data sets • Organizational behavior • Design jobs, manage workforce • International business methods • Facility location, inventory management, etc.

15. OM Trend: Service Sector Growth Manufacturing, mining, and construction 40 40 – – Other Services 30 30 – – Wholesale and retail sales 20 20 – – Percentage of workforce Percentage of workforce Government 10 10 – – 0 0 | | | | | | | | | | 1959 1959 1969 1969 1979 1979 1989 1989 1999 1999

16. OM Trend: Global Competition • Intense competition through • Quality • TQM, SPC • Time • JIT, SCM • Technological change • E-commerce • Workforce diversity • Environmental issues