Introduction to Operations Management

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Introduction to Operations Management
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Operations Management

• Create operational systems.
• Manage (plan, organize, staff, direct and
  control) the activities relating to the
  production of goods and/or services with maximum
  efficiency (at the lowest cost) and effectiveness
  (in the eyes of the customer).
• Improve those processes continuously to create
  competitive advantage.

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The Operations System

• The operations system transforms inputs into
  desired goods and services.

Material flow
Information Flow
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Corporate Strategy
Marketing Strategy 4 Ps Place Product Price
Promotion
Operations Management The Context
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Operations Management
Structural Elements
Technology
Vertical Integration
Capacity
Facilities
Infrastructural Elements
Quality Management
Planning Control
Workforce
Organization
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Types of Conversions

• Physical
• Chemical
• Locational
• Educational
• Entertained

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Competitive Priorities for the Operational
Function

• Price or Cost
• Quality
• Short Run Conformance, Design (Fitness for Use)
• Long Run Continuous Improvement Thru the
  Learning Organization
• Flexibility
• Product Mix make various products and adjust mix
• Handle volume Surge
• Time - Dependability
• Speed of Delivery (Lead Time)
• Speed to Market (New Product Development Time)
• Service
• Delivering a comprehensive solution products
  augmenting services to the customers needs

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Theory of Slack Ropes
Time
Service
Quality
By pulling on one priority, the others tend to
get pulled along with it.
Flexibility
Price
Source Duncan McDougall
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Interfunctional Strategies
Order Qualifiers Characteristics of the
product-service bundle that gain entry to and
maintain a companys position in a market.
versus
Marketing Strategy
Operations Strategy
Order Winners Characteristics that win orders in
the marketplace product design, new product
introduction speed, lead time, product quality,
service.
Where does price fit in this scenario?
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Process Choice, Design, Analysis

• Operational Design components
• People following
• Process and Procedures applying
• Technologies and Resources
• Drivers of design choice
• Characteristics of the Product
• Characteristics of Demand
• Competitive Priorities driven by corporate
  strategic analysis
• No one best way to deliver a product.
  Congruence about design elements is key.

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Process-Product Matrix
Product
Each Unique Wide Variety
Commodity Little Variety
Consistent
Opportunities for real advantage

• Line Flow
• Continuous
• Discrete

Flow Patterns
Batch
Job Shop
????
Project
Jumbled
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Significant Developments

• Division of Labor
• Standardized Parts
• Scientific Management
• Time and Motion Study
• Efficiency Improvement
• Wage Incentives
• Assembly Lines
• Motivation and Behavioral Issues

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Significant Developments

• Operations Research
• Computers and Information Technology
• - Computer Aided Design (CAD)
• - Computer Aided Manufacture (CAM)
• - Computer Integrated Manufacture (CIM)
• Flexible Manufacturing Systems (FMS)
• Cellular Manufacturing
• JIT, Lean Manufacturing
• Total Quality Management, Six Sigma
• Mass Customization