Operations Management

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Operations Management

• Section 2
• By
• Pantea Alirezazadeh

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Chapter 1

• Introduction to Operations Management

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Today well address these questions

• What is Operations Management (OM)?
• Why should one study OM?
• What are the three basic functions of a firm?
• What are 10 decision areas of operations
  management?
• Where are the OM jobs?
• What are the changing challenges for the
  Operations Managers?
• How OM is related to productivity?
• What is the productivity?
• How to measure productivity?
• What are the measurement problems that occur when
  one attempts to measure productivity?
• What are five reasons why productivity is
  difficult to improve in the service sector?

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What is Operations Management?

• OM is the set of activities that creates value
  in the form of goods and services by transforming
  inputs into output.
• Example

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Why Should we study OM?

• What are the three basic functions of a firm?
• Marketing generates demand
• Production/operations creates the product
• Finance/accounting tracks how well the
  organization is doing, pays bills, collects the
  money

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• Organizing Charts for an
• Service Organizations
• and
• manufacturing Organization

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Continue Why Should we study OM?

• OM is one of three major functions (marketing,
  finance, and operations) of any organization and
  we study how people organize themselves for
  productive enterprise.
• We want to know how goods and services are
  produced.
• To understand what operations managers do.
• It provides a major opportunity for an
  organization to improve its profitability and
  enhance its service to society.

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What are 10 decision areas of operations
management?

• Product Design What good or service should we
  offer? (chapter5)
• Quality How to define quality?
  (chapter 6 and 6 supp.)
• Process What process will these products
  require? (chapter 7,7supp.)
• Location Where should we put the facility?
  (chapter 8)
• Layout How should we arrange the facility?
  (chapter9)
• Human Resources How to provide a reasonable
  work environment? (10)
• Supply Chain Management should we make or buy
  this component?(11)
• Inventory How much inventory of each item
  should we have? (12, 14, 16)
• Planning (aggregate and short-term) which job
  do we perform next? (13, 15)
• Maintenance who is responsible for maintenance?
  (17)

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Where are the OM jobs?

• Disciplines in operation part of organizations.
• you need to have the knowledge of accounting,
  statistics, finance and OM.
• Try to take courses in accounting, statistics,
  information systems and math.
• About 40 of all jobs are in OM.

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What are the changing challenges for the
Operations Managers?
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How OM is related to productivity?

• What is the productivity?
• Productivity is the ratio of outputs
  (goods and services) divided by one or more
  inputs (such as labor, capital, or management)
• The operations managers job is to enhance
  this ratio of outputs to inputs.

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Example

• If units produced 1000 and labor-hours used is
  250
• then
• Productivity units produced / Input Used
• Productivity 1000/250 4 units labor-hour

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The operations managers job is to enhance this
ratio of outputs to inputs.
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What are the measurement problems that occur
when one attempts to measure productivity?

• precise units of measure may be lacking,
• quality may not be consistent,
• and exogenous variables may change.

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What are five reasons why productivity is
difficult to improve in the service sector?

• many services are labor intensive,
• they are individually (personally) processed (the
  customer is paying for thatservice the hair
  cut),
• it may be an intellectual task performedby
  professionals,
• it is often difficult to mechanize and automate,
  and
• often difficult to evaluate for quality.

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About Half of the 17-year-olds in the U.S. CANNOT
Correctly Answer Questions of this type
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Organization of the Text
The Strategic Designing the Importance
of Operating Managing the Ensuring
Operations System Supply Chain Quality
5. Products and Services 7. Processes
Strategy 8. Location 9. Layout 3. Project
Management

• 11. Supply Chain Management
• 4. Forecasting
• 13. Aggregate Planning
• Inventory Management
• B. Linear Programming
• 16. Just-in-Time and Lean Production
• 14. Enterprise Resource Planning
• 15. Scheduling

• Introduction to Operations and Productivity
• Operations Strategy
• A. Decision-Making Tools

6. Quality Management S6. Statistical
Process Control D. Waiting Line Models 10.
Human Resources in Operations Management

• Will be covered
• Might be skipped

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Assignment

• Visit course website
• Install Excel OM on your laptop from CD.
• Read Chapter 2 and Module A by Jan 29.
• Assignment 1 is due to Jan 31.( You will have
  your first quiz on Jan 31). Ill post the first
  assignment by the end of this weekend( Jan 22).