Operations Management

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Operations Management

• OM302

Jim Hamerly, Ph.D. jhamerly_at_csusm.edu
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OM302

• Course Structure
• Lectures
• Limited class discussions exercises
• Textbook and online reading
• Homework assignments
• Almost-weekly quizzes and a comprehensive final
  exam
• No group project
• Breaks?

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Required Materials

• Operations Management 7th edition, by Russell
  and Taylor available in the bookstore and
  elsewhere
• Also required PRS clicker

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Grade Components

• Weekly quizzes 66.67
• closed book, closed notes
• drop your lowest quiz score
• makes ups permitted if requested in advance of
  missed class
• Final exam (comprehensive) 33.33

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OM302

• This is not a difficult class and you will do
  well
• if and only if you
• complete the homework
• take quizzes
• take the final exam

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Grading Scale

• A 90-100B 80-89
• C 70-79
• D 60-69
• F 0-59
• Please note that there are no /- grades.

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Informal feedback

• At the end of the class, write a 2 minute
• anonymous journal to be handed in immediately.
• The journal should briefly summarize
• Major points learned
• Areas not understood or requiring clarification

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Assignments

• I will not collect homework assignments, but will
  be glad to review them in class, as needed, as
  well as to meet with you out of class
• Doing the assignments is the key to learning the
  materials, you will not pass this class if you do
  not do the assignments

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What I think you expect of me

• Respond promptly to e-mail messages
• Make a productive use of 2 hours of class time
• Grade and test fairly
• This is a 2 unit class, make it 2 units of work
• Have fun while learning

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Course Materials

• http//courses.csusm.edu/om302jh/
• Posted weekly presentation materials prior to
  class
• Emailed weekly to you Reading and homework
  assignments
• I must have a valid email address for you, please
  ensure that your email is working properly.

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Operations Management

• ... concerned with the design, planning,
  operation, and control of systems for the
  creation of goods and services.
• This course treats operations management as a
  functional area of an organization and examines
  its interactions with other functional areas.

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Operations Management

• Besides using real-world business applications,
  we will also apply learned techniques to areas of
  your own life, for example
• Should I finish college?
• Go to grad school?
• Will a new car save me money over a used car?
• How much should I expect to gain from the
  lottery?
• How many canned goods should I store at home?
• At a grocery store, which is better, two checkout
  lanes or one checker one bagger?

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Operations Management

• A greatly simplified example
• ... the design, planning, operation, and creation
  of a spaghetti dinner a good or service at the
  Hamerlys home

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Ops Mgmt at the Hamerlysplanning, operation,
and control for the creation of dinner
sauteonions
sautegarlic
Tim
cook
serve
tomatosauce
spices
Kim
Sue
tableware
glasses
ready?
boilwater
addpasta
drain
Greg
serve
ready?
serve
dough
warm
bake
cut
Jim
openwine
serve
breathe
washlettuce
tear
drain
Peg
mix
serve
onionsgarlic
oil vinegar
tomatoes
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Ops Mgmt at the Hamerlysplanning, operation,
and control for the creation of dinner
sauteonions
sautegarlic
Tim
cook
serve
tomatosauce
spices
Kim
Sue
tableware
glasses
ready?
boilwater
addpasta
drain
Greg
serve
ready?
serve
dough
warm
bake
cut
Jim
openwine
serve
breathe
washlettuce
tear
drain
Peg
mix
serve
onionsgarlic
oil vinegar
tomatoes
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Ops Mgmt at the Hamerlysplanning, operation,
and control for the creation of dinner
sauteonions
sautegarlic
Tim
cook
serve
tomatosauce
spices
Kim
Sue
tableware
glasses
ready?
crush tomatoes
boilwater
addpasta
drain
Greg
serve
ready?
tomato puree
serve
dough
warm
bake
cut
tomato paste
Jim
tomatosauce
openwine
serve
breathe
oliveoil
washlettuce
tear
drain
fresh basil
Peg
mix
serve
onionsgarlic
oil vinegar
tomatoes
fresh parsley
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Ops Mgmt at the Hamerlys

• Medium complexity Planning building of a
  home
• 2 years clearing land, 1 year of design work
• Approximately 250,000 construction steps
• Coordination of approximately 25 subcontractors

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Another medium complexity example

• One mornings breakfast makings at Anaheims
  Intl House of Pancakes

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One mornings breakfast

• 7,000 pancakes
• 5,500 eggs
• 1,000 pounds pork
• 600 glasses orange juice
• 1,000 pots of coffee
• 10 cooks
• 18 waiters

Life April 20, 2007
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Another medium complexity example

• One days food on a modern cruise ship

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Cruise ship line Production per day

• 12,000 meals
• 20,000 pounds of vegetables
• 3,000 pounds of meats and seafood
• 4,000 dinner rolls
• 3,000 eggs
• 3,500 packages of sugar
• 50 gallons of ice cream

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High complexity examples

• McDonald's supplying 30,000 restaurants in 121
  countries
• Aramark serving 100,000 meals/day for athletes,
  staff and media at Beijing Games
• Bank of America operating 16,000 ATMs and 5,700
  branch banks in the United States
• Federal Express operating over one million
  drop-off mailboxes in 215 countries
• Building a new subway for Athens, Greece (2.6
  billion)

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Operations Management

• Many seemingly simple everyday tasks are very
  complex in nature, but repetitiveness and
  familiarity hide their complexity
• Making dinner, tying your shoes, driving to LA
• Helping your parents setup a facebook page
• Most real world problems demand sophisticated
  methods at first exposure, but their complexity
  is hidden as they become familiar

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Professional Societies

• Production and Operations Management Society
  (www.POMS.org)
• American Production and Inventory Control Society
  (www.APICS.org)
• American Society for Quality (www.ASQ.org).

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Approximate Course Sequence

• Introduction to Operations
• Decision-making
• Quality Management
• Product Design
• Service Design
• Processes and Technology
• Project Management
• Forecasting
• Inventory Management

• Chapter 1
• Chapter 1 supplement 1
• Chapter 2
• Chapter 4
• Chapter 5
• Chapter 6
• Chapter 9
• Chapter 12
• Chapter 13

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Approximate Course Sequence

• The sequence is approximate because I pace the
  class to your learning and interests
• End of class feedback is very important!

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Operations as a Transformation Process
The transformation process should add value such
that the output has financial value greater than
the sum of the inputs


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Operations as a Transformation Process
The transformation process should add value such
that the output has financial value greater than
the sum of the inputs


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Cooking as a Transformation Process
Note that if the cook is any good, the OUTPUT
will be more highly valued than the sum of the
INPUTS.
Ready?
Feedback
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Transformation Processes
Transformation Industry Physical manufacturing Loc
ational transport/warehouse Exchange retail Physio
logical health care Psychological entertainment In
formational communications
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Historical OM Example

• ECommerce

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1994 OM questions that led to ECommerce

• In the purchase of a product or service, how can
  we
• Permit buyers to more easily find sellers?
• Increase the product selection choice (10X,
  100X)?
• Provide detailed information about the product?
• Find out what previous buyers thought?
• Make the transaction much more convenient?
• Reduce the delivery time? Track its delivery?
• All while reducing the overall cost?

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A New Value Chain
(a) Traditional Value Chain
(b) Intermediaries Eliminated (Disintermediation)
(b) New Intermediaries Introduced
(Reintermediation)
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Value Chain Feedback
(a) Traditional Value Chain
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The Growth of E-Commerce
1000B 800B 600B 400B 200B
B2B B2C
2000 2001 2002 2003 2004
Year
still only about 2 of retail sales
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E-Commerce Promotes

• Lower cost of materials
• More efficient processes
• Faster, better decision making
• Expanded supply chains
• Better supplier-customer relations
• New forms of organizations
• New ways of doing business
• Globalization

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E-Commerce

• is a direct result of applying operations
• management principles to the delivery of
• goods and services to customers

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Sample Operational Issues

• Forecasting Demand for products? Sales
  patterns?
• Finance How much capital do we need?
• HR How many employees do we need? What skills?
• Location, Distribution and Transportation Where
  is the best location for an operation? How big
  should facilities be?
• Inventory How much stock should we hold? When do
  we order more? How much should we order?
• Queuing How long are our waiting lines? How many
  servers should we use? What service level are we
  giving?