Post on 06-Apr-2018
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William J. Stevenson
Operations Management
8th edition
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Operations ManagementOperations Management
The management of systems or processes
that create goods and/or provide services
Organization
Finance Operations Marketing
Figure 1.1
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What Do Operations Managers
Do? What is Operations?
a function or system that transforms inputs into
outputs of greater value
What is a Transformation Process? a series of activities along a value chain extending
from supplier to customer
activities that do not add value are superfluous and
should be eliminated
What is Operations Management?
design, operation, and improvement of productive
systems
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ValueValue--AddedAdded
The difference between the cost of inputs
and the value or price of outputs.
InputsLand
Labor
Capital
Transformation/
Conversion
process
Outputs
Goods
Services
Control
Feedback
FeedbackFeedback
Value added
Figure 1.2
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Steel production
Automobile fabrication
Home remodeling
Retail sales
Auto Repair
Appliance repair
Maid Service
Manual car wash
Teaching
Lawn mowing
High percentage goods
Low percentage service
GoodsGoods--service Continuumservice Continuum
Low percentage goods
High percentage service
Figure 1.3
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Goods-service Continuum
Source:Adapted from Earl W. Sasser, R. P. Olsen, and D. Daryl Wyckoff, Management of
Service Operations (Boston: Allyn Bacon, 1978), p.11.
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Food ProcessorFood Processor
Inputs Processing Outputs
Raw Vegetables Cleaning Canned
vegetablesMetal Sheets Making cansWater CuttingEnergy CookingLabor PackingBuilding Labeling
Equipment
Table 1.2
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Hospital ProcessHospital Process
Inputs Processing Outputs
Doctors, nurses Examination Healthy
patientsHospital SurgeryMedical Supplies MonitoringEquipment MedicationLaboratories Therapy
Table 1.2
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Manufacturing or Service?Manufacturing or Service?
Tangible Act
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Production ofGoods vs. Delivery ofServices
Production of goods tangible output
Delivery of services an act
Service job categories
Government Wholesale/retail
Financial services
Healthcare
Personal services
Business services
Education
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Key Differences
1. Customer contact2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
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Manufacturing vs ServiceManufacturing vs Service
Characteristic Manufacturing ServiceOutput
Customer contact
Uniformity of input
Labor content
Uniformity of output
Measurement of productivityOpportunity to correct
Tangible
Low
High
Low
High
EasyHigh
Intangible
High
Low
High
Low
DifficultLow
quality problemsHigh