Introduction to Operations and Competitiveness

1. Subject:505521 Operational Managementผู้สอน :Asst. Prof. Dr. Banhan Lila(ผศ.ดร.บรรหาญ ลิลา) Tel: 0-3874-5900 ext. 3390 ext. 105 Email:Blila@buu.ac.thOffice :Industrial Engineering Dept.Faculty of Engineering,Burapha University

2. Introduction toOperations and Competitiveness

3. What Do Operations Managers Do? • What is Operations? • a function or system that transforms inputs into outputs of greater value • What is a Transformation Process? • a series of activities along a value chain extending from supplier to customer • activities that do not add value are superfluous and should be eliminated • What is Operations Management? • design, operation, and improvement of productive systems

4. Transformation Process • Physical: as in manufacturing operations • Locational: as in transportation operations • Exchange: as in retail operations • Physiological: as in health care • Psychological: as in entertainment • Informational: as in communication

5. INPUT • Material • Machines • Labor • Management • Capital • OUTPUT • Goods • Services TRANSFORMATION PROCESS Operations as a Transformation Process Feedback

6. Operations Function • Operations • Marketing • Finance and Accounting • Human Resources • Outside Suppliers

7. 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.” How is Operations Relevant to my Major?

8. 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.” How is Operations Relevant to my Major?

9. Evolution of Operations Management • Craft production • process of handcrafting products or services for individual customers • Division of labor • dividing a job into a series of small tasks each performed by a different worker • Interchangeable parts • standardization of parts initially as replacement parts; enabled mass production

10. Evolution of Operations Management (cont.) • Scientific management • systematic analysis of work methods • Mass production • high-volume production of a standardized product for a mass market • Lean production • adaptation of mass production that prizes quality and flexibility

11. Historical Events in Operations Management

12. Historical Events in Operations Management (cont.)

13. Historical Events in Operations Management (cont.)

14. Historical Events in Operations Management (cont.)

15. Business Consumer Business B2C Amazon.com B2B Commerceone.com C2C eBay.com C2B Priceline.com Consumer Categories of E-Commerce Operations Management and E-Business

16. Customer Customer Manufacturer Manufacturer Supplier Supplier Flow of information (customer order) Flow of information (customer order) Flow of product (order fulfillment) An Integrated Value Chain • Value chain: set of activities that create and deliver products to customer

17. Comparison shopping by customers Direct contact with customers Business processes conducted online Customer expectations escalate; quality must be maintained and costs lowered No more guessing about demand is necessary; inventory costs go down; product and service design improves; build to-order products and services is made possible Transaction costs are lower; customer support costs decrease; e-procurement saves big bucks Impact of E-Business on Operations Management Benefits of E-Business Impact on Operations

18. Access to customers worldwide Middlemen are eliminated Access to suppliers worldwide Demand increases; order fulfillment and logistics become major issues; production moves overseas Logistics change from delivering to a store or distribution center to delivering to individual homes; consumer demand is more erratic and unpredictable than business demand Outsourcing increases; more alliances and partnerships among firms are formed; supply is less certain; global supply chain issues arise Impact of E-Business on Operations Management (cont.) Benefits of E-Business Impact on Operations

19. Online auctions and e-marketplaces Better and faster decision making Competitive bidding lowers cost of materials; supply needs can be found in one location More timely information is available with immediate access by all stakeholders in decision-making process; customer orders and product designs can be clarified electronically; electronic meetings can be held; collaborative planning is facilitated Impact of E-Business on Operations Management (cont.) Benefits of E-Business Impact on Operations

20. IT synergy Expanded supply chains Productivity increases as information can be shared more efficiently internally and between trading partners Order fulfillment, logistics, warehousing, transportation and delivery become focus of operations management; risk is spread out; trade barriers fall Impact of E-Business on Operations Management (cont.) Benefits of E-Business Impact on Operations

21. Risks of Globalization • Cultural differences • Supply chain logistics • Safety, security, and stability • Quality problems • Corporate image • Loss of capabilities

22. Primary Topics in Operations Management

23. Primary Topics in Operations Management (cont.)