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Chapter 1 - Introduction to Operations Management

Chapter 1 - Introduction to Operations Management. Operations Management by R. Dan Reid & Nada R. Sanders 2 nd Edition © Wiley 2005 PowerPoint Presentation by R.B. Clough - UNH. Introduction to Operations Management Outline. What is operations management?

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Chapter 1 - Introduction to Operations Management

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  1. Chapter 1 - Introduction to Operations Management Operations Management by R. Dan Reid & Nada R. Sanders 2nd Edition © Wiley 2005 PowerPoint Presentation by R.B. Clough - UNH © Wiley 2005

  2. Introduction to Operations Management Outline • What is operations management? • Value added, efficiency, and effectiveness • The transformation process, measurement, feedback • Why do we study operations management? • Similarities between manufacturing and services • Operations management decisions (Table 1-1) • Diagram of the course © Wiley 2005

  3. What is Operations Management? The business function responsible for planning, coordinating, and controlling the resources (inputs) needed to make a company’s products (goods and services) © Wiley 2005

  4. Typical Organization Chart © Wiley 2005

  5. Value Added, Efficiency, Effectiveness • Value added: value of outputs – cost of inputs • Efficiency: performing activities at the lowest possible costs • Effectiveness: doing what the company must do to serve customers and compete © Wiley 2005 - Effectiveness added by EJR

  6. Transformation Process © Wiley 2005

  7. Measurement and Feedback • Measurement systems in operations collect data about the transformation process, the inputs, and the outputs • Feedback is the use of data to improve the transformation process and the inputs, thereby improving the outputs. • Data from operations measurements systems • Cost data from accounting systems • Customer information: returned products, complaints, customer surveys, focus groups © EJR 2006

  8. Typical Measures Used to Improve Operations Management • Costs • Quality • Quantity produced or number of customers served • Timeliness (on-time delivery, service time, fast delivery) © EJR 2006

  9. Why do we study Operations? (1) • Companies need a strong operations function to compete. • Operations helps attract and retain customers by • Introducing new technology that allows the firm to offer new or better goods and services • Participating in product design teams • Providing the quality and timeliness that customers want • Reducing the costs of operations so that products can be sold at a price that customers will pay. © Wiley 2005

  10. Why do we study Operations? (2)To learn tasks that professionals do • Quality management • Project management • Job design • Scheduling work • Increasing productivity © Wiley 2005

  11. MGMT 326 Capacity, Facilities, and Work Design Products & Processes Quality Assurance Planning & Control Foundations of Operations Introduction Strategy

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