What is “Operations Management”? (and why should you care?)

What is“Operations Management”?(and why should you care?) Dr. Ron Lembke, Ph.D. University of Nevada, Reno

Reaching me • Email: ronlembke@unr.edu • Phone: (775) 682-9164 • WWW: http://business.unr.edu/faculty/ronlembke When emailing, please include “701” and something like “MBA” in the subject line. Don’t call my cell, and I won’t call yours. Deal?

Who Are You? (This is Homework) In Canvas, please tell me the following: • Your name, email • Where From • Undergrad major, where • Work experience • Interests / Fun

The Goal What is the goal of a company? The goal is to make money by providing goods or services. To do that, we need to be effective and efficient. What is the difference?

Efficient & Effective • Efficiency: Doing things with the least use of resources • Effectiveness: Doing the right thing at the right time. • Value = Quality / $

What is Operations Management? • “The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.” p. 6. • Operations research / management science • Applying quantitative methods to decision making • Industrial Engineering • Engineering discipline, includes human factors and ergonomics. • OM is a field of management that may use some tools from OR/MS and IE.

Why OM is the most important area • Marketing • Sales • Finance • Accounting • Management • I/S • Operations tells the world about our products gets people to buy our product makes sure we have the money to operate keeps track of where money comes from and goes keeps people on task, sets strategy and vision makes sure everyone has the information they need to do their jobs. actually makes the thing we sell. Without operations, you can’t have a company.

Why Do You Care? • Satisfying Customers depends on Operations • You must understand and work in or with Operations: • Finance: Depr, Cash Flow, Make vs. Buy • Acctg: Cost estimates, Overhead, Inv valuation • Mktg/Sales: What can be done? • HR: job descr, standards, incentives • IS: production, shipping, billing, receiving • Goizueta at Coke: What do you do to sell more Coca-Cola? • How do you support the mission?

Operations as Service Everybody’s in service Core services: done correctly, customized to their needs, delivered on time, priced competitively Value-added services: make customers’ jobs or lives Information on product – data, specs Sales support – demo product trying to sell Problem solving – help internal, external customer Field support – replace parts quickly

Course Outline:Test 1 – Strategy and Analytics 1. What is Operations Management? 2. Strategic Role of Operations and Sustainability 3. Forecasting: How much stuff do we need? 4. Capacity Management: how to make it and how much capacity to have? When add more?

Test 2-Manufacturing and Service Processes 5. Project Management: Getting it done on time 6. Designing a production process 7. Services: randomly arriving customers Queueing Theory 9. Material Requirements Planning - scheduling production and getting enough parts • Linear Programming: Mathematically optimal decisions

Test 3: Supply Chain Processes and Analytics 10. Quality Management and Six Sigma 11. Inventory management: how much stuff, and where? 12. Lean production, aka Just In Time 13. Global sourcing and procurement 14. Location Selection: where to build? This is NOT a comprehensive final! Only over section 3.

Test Preparations • Tests are roughly 75% mathematical • Some questions where I might ask you to explain where you have seen an idea being used, or where it might work well. • In that case, what do you think? Or have you seen? • Practice problems are supposed to be good preparation • I suggest you do them, and then look at the solutions I’ve given you.

Webcampus • Not a major source of your grade • Somewhat detailed, relatively recent example of our concepts at work • Read or watch the material, and offer you’re your responses

Case Study • Tell me about a way you think a company could improve its operations (either its effectiveness or efficiency). • This must be based on a real company • It could be one you work at, your spouse, your friend, your parent, your child, or just one you’ve observed as a customer • It does not haveto have data, but if you can ballpark things as best as possible, that is better than nothing • Done in groups, due at the end of the semester • Presentations videotaped and put online for you to watch

Benihana Case Study • Read the HBSP case. • Tell me how Benihana’s operational decisions contributed, both positively and negatively, to their success • How long? Let say 3-4 pages-ish.

Nokia • November, 2007 Hmm, I wonder? June 29, 2007

Does anyone remember Nokia?

Or Blackberry?

Smartphone sales by OS With 17.2% of units sold, Apple had 91% of the profits

Continuous Improvement IGNORE YOUR TEETH, AND THEY’LL GO AWAY • It used to be you had to be “good enough” • Now, you must be looking for ways to make your customer happy, and meet their future needs • If you aren’t someone else is, and is going to take your business

What is “Operations Management”? (and why should you care?)