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Operations Management

Operations Management. Week 1 The Nature of Operations Management Dr. Inger Seiferheld. Course structure. Week 1: The Nature of Operations Management, an overview Week 2: The Management Science toolbox, decision making and related techniques

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Operations Management

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  1. Operations Management Week 1The Nature of Operations Management Dr. Inger Seiferheld OpsMgmt, MBA - Inger Seiferheld

  2. Course structure • Week 1: The Nature of Operations Management, an overview • Week 2: The Management Science toolbox, decision making and related techniques • Week 3: Planning and control Operations Management and performance objectives • Week 4: Supply Chain Management, the importance of managing the flow of materials from suppliers through to the final customer • Week 6:Quality Management, the evolution of quality management, TQM and improvement • Week 7: Design in Operations Management, where does it all come from? • Week 8: Technology & Innovation Management, an overview an important related area • Week 9: Electronic Commerce, Operations Management addressed with respect to e-commerce OpsMgmt, MBA - Inger Seiferheld

  3. Textbook • Slack, N., Chambers, S. & Johnston, R: “Operations Management”, app. £30.00 • This is the one we will be referring to throughout the course!!!! • A book with special focus on service operations: "Service Management and Operations" by Haksever, C. et al. ISBN: 0130813389 app. £30.00 OpsMgmt, MBA - Inger Seiferheld

  4. Operations? • Car manufacturer • Hairdresser • Fast food chain • Bank • The university • Your local news agent • ... OpsMgmt, MBA - Inger Seiferheld

  5. Feedback The transformation process Input resources Output resources Transformation StaffMoneyMaterialsTimePower... The product/service, we offer our customers + waste OpsMgmt, MBA - Inger Seiferheld

  6. Engineering Development Purchasing Operations Management Marketing Support functions Manufacturing operations Tangible/intangible, separability, perishable/non-perishable, standards/variability OpsMgmt, MBA - Inger Seiferheld

  7. Back Office Front Office Shares and investments Exchange Arbitrage Cashiers Credit information Account advise Transfer and exchange Mortgage advice . . . . . . Service industry, e.g. bank Operations Management Intangible, inseparability, perishable, variability (interaction ) OpsMgmt, MBA - Inger Seiferheld

  8. How to characterise operations Characteristics: • Volume: repeatability, specialisation, systemisation, costs • Variety: flexibility, standardisation • Variation: capacity, flexibility, routines, predictability, utilisation • Customercontact: time issues, value issues, staff skills (Also, refer to figure 1.10 in the text book) OpsMgmt, MBA - Inger Seiferheld

  9. How to describe operations Performance objectives: • Cost:  do things cheaply • Quality:  things right • Speed  do things fast • Flexibility:  be able to adapt • Dependability:  do things when promised AT THE SAME TIME, THESE MAY HELP US DESCRIBE OUR GOALS/OBJECTIVES! (See figures 2.5 - 2.9 in the text bookfor a comparison of different operations) OpsMgmt, MBA - Inger Seiferheld

  10. Cost Speed Dependability Quality Flexibility Competitive advantages: low prices, high margins, etc. High productivity High productivity Fast throughput Internaleffects Short delivery lead time Error-free processes Abilityto change On-time delivery Products/services meets specifications Type and range of products/services OpsMgmt, MBA - Inger Seiferheld

  11. Examples 1 Fast food chain: • high volume, standardisation, routines, limited customer contact, low costs, quality (a matter of taste!), high speed, low flexibility, dependability, via buffering • Hairdresser: • low volume, flexibility, high variation, high level of customer contact, high costs, quality linked to fashion, low speed, high flexibility, dependability, via booking OpsMgmt, MBA - Inger Seiferheld

  12. Examples 2 Bank: • high volume, adaptable standards, routines, high level of customer contact, high costs, quality in the interpretation of dependability, some flexibility • Car manufacturer: • high volume, flexibility, adaptable standards, low level of customer contact, high costs, quality linked to safety + features, high speed, some flexibility, dependability via buffering OpsMgmt, MBA - Inger Seiferheld

  13. Macro/micro • The overall organisation • Operations • Departments • Support functions • Sub-functions • Customer and supplier relations • Boundaries! OpsMgmt, MBA - Inger Seiferheld

  14. ? Decide for a meal Shopping Preparing Cooking ? GroceriesUtensilsPowerYourself FoodDirty dishesA full stomach MoneyShopping listYourself GroceriesPlastic bagsEmpty wallet Cook Shop Cooking OpsMgmt, MBA - Inger Seiferheld

  15. CASE DISCUSSION • Case discussion today: • Discuss the operation you are now part of, University of Edinburgh • What kind of operation is it? What are the characteristics and what might the performance objectives be? • Case for your spare time: “Operations Objectives at the Penang Mutiara”, p.59 OpsMgmt, MBA - Inger Seiferheld

  16. The role of Operations What is the role of Operations? • To make our organisation meet the defined targets and objectives How? • By performing according to the overall strategy OpsMgmt, MBA - Inger Seiferheld

  17. Adapting to strategy • The strategy must be broken down • goals and plans identified • sub goals and plans identified for each function/department • Strategy and goals must match our “raison d'être” • what is it that we offer our customers/that our customers want? OpsMgmt, MBA - Inger Seiferheld

  18. How to develop a strategy, 1 • Identify competitive factors  • qualifying objectives, how do we get approved by the customer • order winning criteria, how do we win an order • Transform to performance objectives • Different strategies for different products OpsMgmt, MBA - Inger Seiferheld

  19. How to develop a strategy, 2 • The Hill Methodology: • Corporate objectives, marketing strategy, order winning, operations strategy • The Platts-Gregory procedure: • an amalgamation of market requirements and achieved performance • SWOT analysis • Strengths, Weaknesses vs.. Opportunities and Threats OpsMgmt, MBA - Inger Seiferheld

  20. Stage 1:Correct problems, internally neutral Ability to implement Stage 2:Adopt best practice, externally neutral Ability to be appropriate Stage 3:Link strategy with operations, internally supportive Ability to drive strategy Stage 4:Give an advantage, externally supportive Cf. Hayes and Wheelwright Operations and strategy OpsMgmt, MBA - Inger Seiferheld

  21. Internet resources • Slack: http://www.booksites.net/Especially: “Business”, “Slack et al Operations Management, 2/e” in the Ops Mgmt section, “Student Resources” • Thomson Business Press: http://www.itbp.com/Especially: “Students”, “Ops Management”, “Operations Management definitions from the Pocket IEBM” • Course website: To be confirmed OpsMgmt, MBA - Inger Seiferheld

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