INTRODUCTION

Operations

Goods

Services
Operations management
The management of systems or processes that create goods and/or provide
services..

Supply chain
A sequence of activities and organizations
involved in producing and delivering a good or service.
Value-added
The difference between the cost of inputs and the value or price of outputs
Production of Goods versus Delivery of Services

PROCESS MANAGEMENT

Managing a Process to Meet Demand

Process Variation
THE SCOPE OF OPERATIONS MANAGEMENT

Why Manufacturing Matters

WHY LEARN A BOUT OPERATIONS MANAGEMENT?

A-Interactions and overlapping

1-Finance and operations management

Budgeting Economic analysis of investment Provision of funds

proposals

2-Marketing and operations

management

Selling Assessing Demand Improving

promoting customer needs
OPERATIONS MANAGEMENT AND
DECISION MAKING

What: General approaches to decision making

When:
Where:
How:
Who: Models Analysis of Trade-Offs

A Systems Approach Degree of Customization

Quantitative
Approaches Establishing Priorities
 THE HISTORICAL EVOLUTION OF OPERATIONS MANAGEMENT

Craft production System in which highly skilled workers use

simple, flexible tools to produce small quantities of
customized goods.

The Industrial Revolution

Scientific Management

Mass production System in which low-skilled

workers use specialized machinery to produce
high volumes of standardized goods.
Interchangeable parts
Parts of a product made to such precision that they do not have to be custom fitted

Division of labor The breaking up of a production process into small tasks, so

that each worker performs a small portion of the overall job.
The Human Relations Movement

Fatigue
McGregor
motivation
 Theory Z By Ouchi

Japanese approach traditional Western approach

lifetime employment, short-term employment, specialists,

employee problem solving, and individual decision making and
and consensus building responsibility.

Theory Z
 OPERATIONS TODAY

Advances in information technology Technology

The application of scientific discoveries to the
development and improvement of goods and
Internet services

E-business Use of the Internet to transact

business.
E-commerce Consumer-to business
transactions.
Relation between operations management technology

Operations management is primarily concerned with three kinds of

technology

Product and service technology

Process technology

Information technology (IT)

Technological advance also places a burden on management.

Globalization

Global supply chain

Competitive pressures and changing economic conditions have caused
business organizations to put more emphasis on :

Operations strategy. Agility

Working with fewer resources.

Revenue management.
Process analysis and improvement, and
quality improvement.

Lean production.
Operations strategy.

During the 1970s and 1980s, many companies neglected to include

operations strategy in their corporate strategy. Some of them paid dearly
for that neglect. Now more and more companies are recognizing the
importance of operations strategy on the overall success of their
business as well as the necessity for relating it to their overall business
strategy.
Working with fewer resources.

1. Fast-track where you can

2. Be creative

3. Motivate, motivate, motivate

4. Prioritize tasks and goals
Revenue management.
Process analysis and improvement, and
quality improvement.

Six sigma
A process for reducing costs, improving quality, and
increasing customer satisfaction.
Total quality management

A quality focus emphasizes customer satisfaction and often

involves teamwork. Process improvement can result in improved
quality, cost reduction, and time reduction.
Agility

The ability of an organization to respond quickly

to demands or opportunities.