MKT B370 Operations Management

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MKT B370 Operations Management

• Group 2
• Tutorial 1
• C.S. Lai
• April 2012

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Your choice of language English or Cantonese
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Welcome! todays agenda

• Introduction to the course 15 mins.
• Ground rules, QA 15 mins.
• Introduction to the subject 60 mins.
• Production System
• Goods vs. Services
• Operation Strategy
• TMAs 15 mins.
• QA, Your Suggestions 15 mins.

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About me

• MSc in Engineering Business Management (Warwick)
• Supply Chain Procurement Manager of a
  multinational pharmaceutical company
• Please dont call me Lai Sir, call me CS or Mr.
  Lai
• To contact me
• Tel [phone] (Sun/Sat 2000 2200)
• Please allow your callers ID to be displaced
• Please leave a message in case the line is busy.
• Please DONT call during office hours (Mon.
  Fri.).
• Please DONT call after 2200, I should have
  slept already!
• Email t441653_at_ouhk.edu.hk

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About your Course Coordinator

• Dr. Matthew Yeung
• Tel [phone]
• Office A826
• Email myeung_at_ouhk.edu.hk

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My role as tutor

• Help everyone of you to complete this course
• Telephone tutoring, face-to-face sessions, TMAs,
• OUHK expects me to be a manager (of students
  time), a well informed and sensitive counsellor
  and an effective administrator and NOT to
  transmit knowledge to your students
• Lecturing for more than one third of the
  tutorial time should be considered too much

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Please.

• Speak out
• Ask questions
• Share your thoughts
• Make mistakesand
• Enjoy!

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One last thing

• Please ensure your phone doesnt ring during the
  tutorial
• If you need to use your phone, please use the
  area outside the classroom
• Thanks!

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Activity

• What is Operations Management? Please find some
  examples that is within the scope of Operations
  Management.
• Why do you study this course?
• How can this course help you in your career?

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What is Operations Management?

• Operations management (OM) is defined as the
  design, operation, and improvement of the systems
  that create and deliver the firms primary
  products and services.

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What is OM?
Design (unit 1 Nature and context of OM,
Strategy) (unit 2 Project Management
Operation and improvement Unit 3 Quality Unit 4
Product design and process selection Unit 5
Capacity, Location Unit 6 Job Design
Supply Chain Unit 7 Managing Supply and
Demand Unit 8 Inventory Management Unit 9
Scheduling
Unit 10 - Reengineering
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Why Study Operations Management?
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What is a Production System?Defined

• A production system is defined as a user of
  resources to transform inputs into some desired
  outputs.

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Transformations

• Physical--manufacturing
• Locational--transportation
• Exchange--retailing
• Storage--warehousing
• Physiological--health care
• Informational--telecommunications

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Activity

• Primary Inputs
• Resources
• Primary Transformation Functions
• Typical Desired Output
• Please use the following examples, describe the
  Input-Transformation-Output Relationship
• McDonald (A service manufacturing organization)
• OUHK (A service organization)

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What is a Service and What is a Goods? Please
discuss

• If you drop it on your foot, it wont hurt you.
  (Good or service?)
• Services never include goods and goods never
  include services. (True or false?)

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Characteristics of Services

• Customer participation
• Simultaneous production and consumption
• Time-perishable capacity
• Site dictated by location of customers
• Labour intensiveness
• Intangibility
• Difficulty in measuring output

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Core services are basic things that customers
want from products they purchase.
Core Services Definition
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Core Services Performance Objectives
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Value-added services differentiate the
organization from competitors and build
relationships that bind customers to the firm in
a positive way.
Value-Added ServicesDefined
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Value-Added Service Categories
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Examples Core Service vs. Value Added Service

• What would you expect if you
• Purchase a new ballpen?
• Purchase a new TV?
• Going to a fast-food restaurant?
• Going to a fancy restaurant?

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Historical Development of OM

• Principles of Scientific Management. (1910s)
• MRPII (1970s)
• JIT and TQC. (1980s)
• Manufacturing Strategy Paradigm. (1980s)
• Service Quality and Productivity. (1970s)

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Historical Development of OM (contd)

• Total Quality Management and Quality
  Certification.
• Business Process Reengineering. (1990s)
• Supply Chain Management. (1990s)
• Electronic Commerce. (2000s)

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Operations Strategy
Strategy Process
Example
Customer Needs
More Product
Corporate Strategy
Increase Org. Size
Operations Strategy
Increase Production Capacity
Decisions on Processes and Infrastructure
Build New Factory
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Competitive Dimensions

• Cost
• Product Quality and Reliability
• Delivery Speed
• Delivery Reliability
• Coping with Changes in Demand
• Flexibility and New Product Introduction Speed
• Other Product-Specific Criteria

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Dealing with Trade-offs
For example, if we reduce costs by reducing
product quality inspections, we might reduce
product quality.
For example, if we improve customer service
problem solving by cross-training personnel to
deal with a wider-range of problems, they may
become less efficient at dealing with commonly
occurring problems.
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Order Qualifiers and Winners

• Order qualifiers?
• They are the basic criteria that permit the firms
  products to be considered as candidates for
  purchase by customers.
• Order winners?
• They are the criteria that differentiates the
  products and services of one firm from another.

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Service Breakthroughs

• A brand name car can be an order qualifier

• Repair services can be order winners
• Examples Warranty, Roadside Assistance,
  Leases, etc.

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Imagine you run an airline in HK or elsewhere.
Identify your order winners and qualifiers
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Operations Strategy Framework
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Steps in Developing a Manufacturing Strategy

• 1. Segment the market according to the product
  group.
• 2. Identify product requirements, demand
  patterns, and profit margins of each group.
• 3. Determine order qualifiers and winners for
  each group.
• 4. Convert order winners into specific
  performance requirements.

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What is Productivity?Defined

• Productivity is a common measure on how well
  resources are being used. In the broadest sense,
  it can be defined as the following ratio
• Outputs
• Inputs

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Total Measure Productivity

• Total Measure Productivity Outputs
• Inputs

or
Goods and services produced
All resources used
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Partial Measure Productivity

• Partial measures of productivity
• Output or Output or Output or Output
• Labor Capital Materials
  Energy

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Multifactor Measure Productivity

• Multifactor measures of productivity
• Output
  .
• Labor Capital
  Energy
• or
• Output
  .
• Labor Capital
  Materials

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Example of Productivity Measurement

• You have just determined that your service
  employees have used a total of 2400 hours of
  labor this week to process 560 insurance forms.
  Last week the same crew used only 2000 hours of
  labor to process 480 forms.
• Which productivity measure should be used?
• Answer Could be classified as a Total Measure or
  Partial Measure.
• Is productivity increasing or decreasing?
• Answer Last weeks productivity 480/2000
  0.24, and this weeks productivity is 560/2400
  0.23. So, productivity is decreasing slightly.

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Current Issues in OM

• Effectively consolidating the operations
  resulting from mergers.
• Developing flexible supply chains to enable mass
  customization of products and services.
• Managing global supplier, production and
  distribution networks.

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Current Issues in OM (contd)

• Increased commoditization of suppliers.
• Achieving the Service Factory.
• Achieving good service from service firms.

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About submitting TMA

• By Post or by Online Submission.
• Send your TMA well before the due dates.
• You should submit each assignment by the cut-off
  date. Late submissions cannot be accepted.
• If you send by post, enclose the TMA form,
  acknowledge card with stamp
• Put down my CORRECT address
• DONT use registered mail. I NORMALLY IGNORE
  REGISTERED MAIL!

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TMAs

• You MUST pass (i.e. 40) BOTH assignments and
  final examination in order to pass the course
• Keep a copy of each assignment
• TMA should arrive MY MAILBOX on / before the due
  date
• 7 days extensions will NOT normally be granted,
  unless you have GOOD reasons and with prior
  permission. (Do you know the official procedure
  of requesting extension?)
• OUHK does not accept postal loss as a reason for
  extension

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Reminders

• TMA 1 due on June 11, 2012.
• Next meeting May 6, 2012 _at_ OUHK
• Project Management

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Enjoy the courseandGood LuckSee you next
time
To download this presentationhttp//alumni.cuhk
.edu.hk/cslai