What is Operations Management?

1. What is Operations Management? • Production is the creation of goods and services • Some will say that a service is delivered • Also can have an experience! • Operations management is the set of activities that creates goods and services through the transformation of inputs into outputs © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-6

2. Operations Management • OM is often associated with a specific function – production or manufacturing • OM consists of processes • Process – a set of tasks transforming inputs into outputs • OM can also be associated with any function through a process focus. © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-6

3. The System Transforms Inputs to Outputs Inputs Process Outputs Land, Labor, Capital, Management A set of activities transforms inputs to outputs; examples: assembly, mfg processes, transportation, selling, cooking, typing, reviewing; the list is endless. Goods and Services Feedback loop © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-35

4. Process Management • OM can also be associated with any function through a process focus. • Everything we do is a process • Therefore we should design processes • A process can be articulated • We can analyze the process • We can design or improve the process using OM tools and techniques © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-6

5. Examples • HR – is hiring a process? • Accounting – is auditing a process? • Marketing – is developing a marketing strategy a process? • Finance – is processing a loan application a process? • Personal – what type of daily process do you do? © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-6

6. Why Study OM? • OM is one of three major functions (marketing, finance, and operations) of any organization. • We want (and need) to know how goods and services are produced so you can do our job. • We want to know what operations managers do since we may interact with them. • OM is a costly part of an organization (assets, costs) © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-16

7. Where are the OM Jobs? • Project management • Technology/methods • Business Process Improvement • Response time • Quality • Customer service • Facilities/space utilization • Inventory reduction • Strategic issues • People/team development • Cost reduction • Productivity improvement © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-29

8. New Challenges in OM From To • Local or national focus • Batch shipments • Low bid purchasing • Lengthy product development • Standard products • Job specialization • Global focus • Just-in-time • Supply chain partnering • Rapid product development • Mass customization • Empowered employees © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-30