Operations Management

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Contents
1.

Introduction to Operation Management

a. b. c. d.

Operations and Productivity Operations Strategy in a Global Environment Project Management Forecasting Design of Goods and Services Managing Quality Process Strategy Location Strategies Layout Strategies Human Resources and Job Design
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2.

Designing Operations
a. b. c. d. e. f.

Contents
3.

Managing Operations
a. b. c. d. e. f. g.

Supply Chain Management Inventory Management Aggregate Planning Material Requirements Planning (MRP) and ERP Short-Term Scheduling JIT and Lean Operations Maintenance and Reliability Decision-Making Tools Linear Programming Transportation Models Learning Curves Simulation

4.

Quantitative Modules
a. b. c. d. e.

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Introduction to Operations Management

1. 2. 3. 4.

Operations and Productivity Operations Strategy in a Global Environment Project Management Forecasting

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Operations and Productivity

1. 2. 3. 4. 5. 6. 7. 8.

What is Operations Management? Organizing to Produce Goods and Services Why Study Operation Management? What Operations Managers Do? The Heritage of Operations Management Operations in the Service Sector Exciting New Trends in Operations Management The Productivity Challenge

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What is Operation Management?

Production

is the creation of goods and

services. Operations Management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

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Organizing to Produce Goods and Services

To create goods and services, all organizations perform three functions. These functions are: 1. Marketing, which generates the demand, or at least takes the order for a product or service (nothing happens until there is a sale) 2. Production/operations, which creates the product. 3. Finance/accounting, which tracks how well the organization is doing, pays the bills, and collects the money.
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Why study OM?

OM

is one of the three major functions of any organization, and it is integrally related to all the other business functions. All organizations market (sell), finance (account), and produce (operate), and it is important to know how the OM activity functions. Therefore, we study how people organize themselves for productive enterprise. We study OM because we want to know how goods and services are produced. The production function is the segment of our society that creates the products and 3/17/13

What operations managers do?

All

good managers perform the basic functions of the management process. The management process consists of planning, organizing, staffing, leading, and controlling. Operations managers apply this management process to the decisions they make in the OM functions. The 10 major decisions of OM are: design of goods and services; managing quality; process and capacity design; location strategy; layout strategy; human resources 3/17/13 and job design; supply chain management;

The heritage of OM
The

field of OM is relatively young, but its history is rich and interesting. OM discipline has been enhanced by the innovations and contributions of numerous individuals.

Eli Whitney (1800) is credited for the early popularization of interchangeable parts, which was achieved through standardization and quality control. Frederick W. Taylor (1881), known as the father of scientific management, contributed to personnel selection, planning and scheduling, motion study, and the now popular field of ergonomics. Henry Ford and Charles Sorensen (1913) combined what they knew about standardized 3/17/13

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Operations in the service sector

Services

are economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services)

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Exciting new trends in OM

One

of the reasons OM is such an exciting discipline is that the operations manager is confronted with an ever-changing world. The 10 decisions are subject to change. The challenges that are faced by OM are:

Global focus, JIT performance, supply chain partnering, rapid product development, mass customization, empowered employees, environmentally sensitive production, and ethics.

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The productivity challenge

Production

services. Productivity is the ratio of outputs (goods and services) divided by one or more inputs (such as labor, capital, or management). Productivity measurement:

is the making of goods and

Single-factor productivity, indicates the ratio or one resource (input) to the goods and services produced (outputs) Multifactor productivity, indicates the ratio of many or all resources (inputs) to the goods and services produced (outputs)
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Ethics and social responsibility

Ethical

challenges facing operations managers are:

Efficiently developing and producing safe, quality products Maintaining a clean environment Providing a safe workplace Honoring community commitments.

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