operman chptr 1

8/6/2019 operman chptr 1

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Operations ManagementCOB 300C

Dr. Michael Busing

08-28-02


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Some Definitions of Operations

Management

Management of productive resources

Design and control of systems responsiblefor productive use of:

raw materials (or supplies for service

operations)

people (direct and indirect workforce)

equipment/facilities (factories or service

branches)

information (planning and control systems)


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Operations Management (COB 300 C)versus

ManagementScience (COB 291)

OM is a field of management

Management Science is the application ofquantitative methods to decision making in

all fields

OM decisions are made in the context of the

firm as a whole -- starting with customers

(i.e., the marketplace) and explicitly

considering a firms corporate strategy.


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The Production System

The production system is the heartofOM.

Uses resources to transform inputs into somedesired output.


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Inputs

RMH - patients

BW3 - hungry/thirsty customers

General Motors - sheet steel, engine parts

JMU - high school students

Pier One - shoppers Target Distribution Center - stockkeeping

units (SKUs)


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Transformations

RMH - health care procedures

BW3 - preparation/service of food/drink

General Motors - fabrication and assemblyof cars

JMU - imparting of knowledge and skills

PierOne - filling of orders

Target Distribution Center - storage andredistribution


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Desired Outputs

RMH - healthy individuals

BW3 - satisfied customers

General Motors - high quality cars

JMU - educated and employable individuals

PierOne - sales to satisfied customers Target Distribution Center - right item at

right place at right time.


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WhyStudy Operations Management?

OM activities are at the core ofallbusiness organizations

regardless of what business they are in

At least 35% of all jobs are in OM related areas

customer service, quality assurance, production

planning and control, scheduling, job design, inventory

management

Other functional areas such as information systems,

finance, accounting, human resources, logistics, marketing,

purchasing, etc. are all interrelated withO

M activities.


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Operations Management

ProfessionalSocieties

American Production and Inventory Control

Society (APICS)

American Society for Quality (ASQ)

National Association ofPurchasing

Management (NAPM)


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Functions Within Business

Organizations

Organizations are formed to pursue goals

that are achieved more efficiently by the

concerted efforts of a group of people than

by individuals working alone.

Organizations are either profit or nonprofit.


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Functions Within Business

Organizations

Three Basic Functions

finance

marketing

production/operations

Functions must interact to achieve the goals

and objectives of the organization.

Success depends not only on the individual

functional area, but on the interface.


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Operations as it Relates to OtherDisciplines


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OM/F

inanceI

nterrelationship

Budgeting: Operating performance -

standard costs versus actual costs

Economic Analysis: Evaluation of various

plant/equipment alternatives

Funding/Provision of funds: Cash Flow

issues - how much/when


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OM/MarketingI

nterrelationship

Advertising/pricing decisions are made by

marketing people.

Marketing is closest to customer

wants/needs and can communicate these to

operations (short and long term

requirements).

Marketing is in tune with competition.


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OM/HR Relationship

Aggregate Planning

Hiring/Firing Decisions

Undertime/Overtime Issues

Workplace Safety Issues

Quality/Training Programs

Productivity/Motivation Issues


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Current Event


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Operations System design versus

operation

System Design Decisions: involves

decisions that relate to system capacity,

geographic location of facilities,

arrangement of departments and placement

of equipment, product and service planning,

and acquisition of equipment.


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operation

System Operation Decisions: management

of personnel, inventory planning and

control, scheduling, project management,

and quality assurance


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operation

System design essentially determines many

of the parameters of system operation.

e.g., cost, space capacities, and quality


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Differentiation Features of

Operations Systems

Degree of Standardization (standardized

versus customized) - volume versus cost

Type of operation (job shop versus

assembly line versus flow)

Goods versus Services

customer contact, uniformity of input, labor

content, uniformity of output, measurement of

productivity, quality assurance.

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