Introduction ToOperations Management

POM 370Dr. Drew Rosen

Business Environment

Operations Financ

e

Economics

Management

Marketing

Information Systems

Accounting

• Improvement of organizational activities to ensure quality, customer satisfaction , and loyalty

•Investments•Capital•Stock Market

•Nceufhkurreffg •Org. Behavior•Policy•Strategy•Sit on their ass

•Sales•Promotion•Research Behavior•Fairy land

• The application of people, technologies, and procedures to solve business problems

•Bookkeeping•Pensions•Audits•The study of how the forces of supply and demand allocate scarce resources

Operations Management Designing Products and Sevices

Operations Management Facility Location and Layout

Operations Management Project Management

Operations Management Scheduling Operations

Operations Management Inventory Control

Operations Management Quality Management

Operations Management Quality Management

Operations Management is:The management of systems or processes

that create goods and/or provide services

Operations Management affects:– Companies’ ability to compete– Nation’s ability to compete internationally

Operations Management

Where to locate your business?

OM Decisions

What type of process to use?

OM Decisions

Number of workers to employ?

OM Decisions

Number of workers scheduled at each station?

Forecasting park demands

Reducing wait times

Managing projects

More than just McDonalds…

Operations is AboutMaking Business Run Better

• More Efficiently

– More Abundantly

• With Higher Customer Satisfaction

The Goal of Operationsand business!

Quality

Customer Satisfaction

LoyaltyLoyalty

1 2 3 4 5

20%

40%

60%

80%

100%

Verydissatisfied

Dissatisfied Neutral Satisfied Very satisfied

Loyalt

y (

Rete

nti

on

)

Satisfaction

zone of defection

zone of indifference

zone of affection

Satisfaction and Loyalty

terrorist

apostle

1. Inseparability2. Intangibility3. Perishability4. Heterogeneity5. Site Location6. Labor Intensity7. Difficulty of Measuring Quality of Output

Goods Vs ServicesKey Differences:

Production of goods – tangible outputDelivery of services – an act

Transformations

Physical: manufacturingLocational: transportationExchange: retailing

Storage: warehousing Physiological: health care

Informational: telecommunications

Big Picture: OM

TransformationProcessINPUTS OUTPUTS

Three Basic Ways to Arrange the Transformation Process Job Shop

– Variety of outputs in small batches– Customized output– General purpose machinery– Highly skilled workers

Flow Shop– High Volume– Standardized output– Special purpose equipment– Lower skilled workers

Profits are the result of attention to quality and customer satisfaction, while the reverse is rarely true.

Edwards Deming