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Transcript of © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 1-1 Who am I? Syllabus highlights ...
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-1
Who am I? Syllabus highlights Who are you? Introduction to Operations Management
BA 357 Operations ManagementBA 357 Operations ManagementJohn SloanJohn Sloan
Day 1 Agenda
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-2
Third year on the OSU Faculty, teaching BA 357, BA 462, and BA 550
28 years of operations / project management experience with Hewlett-Packard: Different geographical locations Different product lines Different functional responsibilities International experience Experience teaching in business setting
BA Mathematics, 4 years USAF, MBA
Who am I?Who am I?
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-3
Get the book Come to class. I will not formally take attendance –
but if you don’t come, don’t expect to do well. Be prepared for class & participate in class Eight quizzes – You can drop one (1/3 of grade) Midterm exam (1/3 of grade) Final exam (1/3 of grade) All subject to change
Syllabus HighlightsSyllabus Highlights
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-4
All students are expected to abide by the university rules on academic honesty, which forbid cheating or plagiarism. Failure to do so will result in failing the class.
Policy on CheatingPolicy on Cheating
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-5
Schedule – BA 357 Section 4
Date Chapter / Topic Quiz / Assignment due
1/4/05
IntroductionsSyllabus reviewCh 1: Introduction to Operations Management
1/6/05 Ch 2: Operations Strategy Regal Marine Video Homework 1
1/11/05 Ch 3: Business Processes King Sooper Video Quiz 1
1/13/05 Supplement 7: Capacity Planning
1/18/05 Quantitative Module A: Decision-Making Tools Quiz 2 Homework 2
1/20/05 Ch 6: Quality Management Quiz 3 Homework 3
1/25/05 Ch 12: Inventory Management
1/27/05 Ch 16: JIT / Lean Systems Quiz 4 Homework 4
2/1/05 JIT Exercise Two Canneries Video
2/3/05 Midterm course review / Catch-up
2/8/05 Midterm exam
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-6
Schedule – p2Schedule – p2
2/10/05 Quantitative Module D: Waiting Line Models
2/15/05 Quantitative Module F: Simulation Quiz 5 Homework 5
2/17/05 Supplement 11: SCM & E-Commerce RM Video
2/22/05 Ch 4: Forecasting
2/24/05 Ch 13: Aggregate Planning Air NZ Video Quiz 6 Homework 6
3/1/05 Ch 14: MRP & ERP Quiz 7 Homework 7
3/3/05 Ch 14: MRP & ERP (continued)Ch 15: Short-Term Scheduling Quiz 8 Homework 8
3/8/05 Ch 3 (Heizer): Project Management Homework 9
3/10/05SustainabilityFinal course review
3/14/05 Final exam 7:30 AM
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-7
Name and major Work experience I know it is early for some of you, but…
What do you want to be doing once you graduate?
Who Are You?Who Are You?
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-8
Operations Operations ManagementManagement
IntroductionIntroductionChapter 1Chapter 1
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-9
Operations & Operations ManagementOperations & Operations Management
Operations: the collection of people, technology, and systems within an organization that has primary responsibility for providing the organization’s products or services
Operations management: the planning, scheduling, and control of the activities that transform inputs into finished goods and services
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-10
Supply Chain & SCMSupply Chain & SCM Supply chain: the network of manufacturers and service
providers that work together to move goods from the raw materials stage through to the end user. These manufacturers and service providers are linked together through physical flows, information flows, and monetary flows.
Supply chain management: the active management of supply chain activities and relationships to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by a firm or group of firms to develop and run supply chains in the most effective and efficient ways possible.
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-11
Processes and OperationsProcesses and Operations
Outputs•Services•Goods
Internal andexternal customers
Information on performance
Processes and operations
5
1
2
3
4
Inputs•Workers•Managers•Equipment•Facilities•Materials•Services•Land•Energy
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-12
Goods vs. ServicesGoods vs. Services
Goods Services
Tangible
Intangible
Yes No
Raw materials, WIP, No – produced and consumed
Relatively easy - consistent Very hard – each customer different
Can be low
Generally high
Yes No
Where convenient to produce
Convenient to customer
Product
Resale
Inventory
Quality
Customer Interaction
Transportability
Location
Automation Yes Yes – standardized services
Frequently centralized Frequently dispersed
at same time
product definition
finished goods
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-13
Goods Contain Services & Goods Contain Services & Services Contain GoodsServices Contain Goods
0 25 50 75 100255075100
AutomobileComputerInstalled Carpeting
Fast-food MealRestaurant Meal
Auto RepairHospital Care
Advertising AgencyInvestment Management
Consulting ServiceCounseling
Percent of Product that is a Good Percent of Product that is a Service
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-14
Organization ChartOrganization Chart
Operations Finance/Accounting
Marketing
ProductionControl
Manufacturing QualityControl
Purchasing
General manager
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-15
Some Cross-functional LinkagesSome Cross-functional Linkages
Engineering: what products and processes are needed
Marketing: can we make what we wish to sell / what products cost the most to make / customer expectations
Accounting: inventory management / JIT / work standards / cost verses price
Finance: make verses buy / quantifying quality / cash flow and capital requirements / cost verses price
Human resources: what skills do our employees need / who to hire / type of compensation to match strategy
Information Systems: what information is needed and by whom / flow of goods / linkages to rest of supply chain
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-16
Trends in Operations & SCMTrends in Operations & SCM
E-commerce improves speed, quality and cost of business communication
Increased competition and globalization in markets increasing rate of change in markets, products and technology
Relationship management of all operations activities, the most susceptible to break down
The freethinking of one age is the common sense of the next
Matthew Arnold (1822 – 1888)
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-17
Why Study Operations Management?Why Study Operations Management? Every organization must make a product or provide a service
that someone values
Operations has primary responsibility for providing the organization’s products or services
Most organizations function as part of larger supply chains
Supply chains are networks of manufacturers and service providers that work together to move goods from the raw materials stage through to the end user
Organizations must carefully manage their operations and supply chains in order to prosper, and indeed, survive
Decisions and actions in operations directly affect company growth, market share, and profitability
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-18
Why Study Operations Management?Why Study Operations Management?
This is where the good or service comes into being – if you do not understand this part of the company, you are not being the best accountant, marketer, or whatever, that you could be.
Strategies in all functional areas must be linked/aligned to support the business strategy.
This is where companies focus a great deal of energy – because this is where most companies incur the majority of their costs. Therefore this is an area where you can have a major impact on a firm’s competitiveness.
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-19
Options for Increasing ContributionOptions for Increasing Contribution
Current
Sales $100,000
Cost of Goods
-80,000
Gross Margin
20,000
Finance Costs
-6,000
Net Margin
14,000
Taxes @ 25%
-3,500
Contribution 10,500
Marketing Option
Sales + 50%
$150,000
-120,000
30,000
-6,000
24,000
-6,000
18,000
Finance/Acct Option
$100,000
-80,000
20,000
-3,000
17,000
-4,250
12,750
OM Option
$100,000
-64,000
36,000
-6,000
30,000
-7,500
22,500
Finance Costs 50% –
Production Costs 20% –
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-20
Productivity = output / input (bigger is better)
Single-factor productivity output / labor hours output / labor $ sales / sales rep sales / retail outlet, etc
Multi-factor productivity output / (labor + material + overhead)
ProductivityProductivity
Productivity WorksheetProductivity Worksheet
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-21
Conclusions for Day 1Conclusions for Day 1 OM is the management of the processes that add
value directly to our goods and services. Functional area strategies must be linked to
support the business strategy There is lots of money in improving operations
Goods and services are part of the same continuum Productivity is the ratio of output to input, either
single-factor or multi-factor. Homework assignment 1 in public folder