chapter 1 (operations management)
TRANSCRIPT
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oadmap
Introduction
Process Management
The Scope of Operations Management
Why Learn About Operations Management?
Operations Management and Decision
MakingThe Historical Evolution of Operations
Management
Key Trends and Issues in Business
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TRASFORMATION/CONVERSION PROCESSINPUTS OU
CONTROL
eedback
eedbackeedback
INPUTS OPERATIONS OUT
LandLaborCapital
InformationRaw MaterialsEquipmentFacilitiesEnergy
CuttingTransportingTeaching
FarmingMixingPackingRepairingInnovating
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Hey! One examplyou like?
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INPUTS PROCESSSES OUTPUTS
Doctors, nursesHospital
Medical suppliesEquipmentLaboratories
ExaminationSurgery
MonitoringMedicationTherapy
Treated p
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Goods-service Continuum
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Characteristic Goods Service
Customer contact Low HighUniformity of input High Low
Labor content Low High
Uniformity of output High Low
Output Tangible Intangible
Measurement of productivity Easy DifficultOpportunity to correct problems High Low
Inventory Much Little
Evaluation Easier Difficult
Patentable Usually Not usual
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TRASFORMATION/CONVERSION PROCESSINPUTS OU
Operations Management
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Process
One or moreactions that
transform inputsinto outputs.
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Upper-management processes
Operational processes
Supporting processes
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1) The variety of the goods an
2) Structural variation in dema
3) Random variation
4) Assignable variation
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Scope ofOperationsManagement The operations function includes many interrelatedactivities such as:
Forecasting Capacity planning Facilities and layout Scheduling Managing inventories Assuring quality Motivating and training employees Deciding where to locate facilities And more . . .
The scope of operations management ranges acrossthe organization.
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Role of theOperationsManager
The Operations Function consists of all activitirelated to producing goods or providing services.
A primary function of the operations manager is tthe system by decision making.
System Design Decisions
System Operation Decisions
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Functions ofthe OperationsManager
System Design
Capacity Facility location
Facility layout Product and serviceplanning
Acquisition andplacement ofequipment
These are typicallystrategic decisions thatrequire
long-termcommitment ofresources
Determineparameters of systemoperation
System Operation
Managemepersonnel
Inventorymanagemecontrol
Scheduling Project ma Quality ass
Operations manspend more timsystem operatiothan any other darea
They still have in system desig
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Key Decisionsof OperationsManagers
Most operations decisions involve many alternativescan have quite different impacts on costs or profitsTypical operations decisions include:
What: What resources are needed, and in whatamounts?
When: When will each resource be needed? Wshould the work be scheduled? When should mand other supplies be ordered?
Where: Where will the work be done?
How: How will he product or service be designwill the work be done? How will resources be a
Who: Who will do the work?
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Why learnaboutoperationsmanagement?
Every aspect of business affects or is affeby operations.Have a better understanding of the worldlive in, some of the reasons that companisucceed or fail and the importance of worwith others
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GeneralApproach toDecisionMaking
Modeling is a key tool used by all decision make Model - an abstraction of reality; a simplifisomething.Common features of models:
They are simplifications of real-life pheThey omit unimportant details of the reasystems they mimic so that attention canfocused on the most important aspects oreal-life system
Models
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Models
Types of Models :
Physical ModelsLook like their real-life counterpartsSchematic Models
Look less like their real-life counterpartphysical models
Mathematical ModelsDo not look at all like their real-life cou
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UnderstandingModels
Keys to successfully using a model in decision m
What is its purpose?How is it used to generate results?How are the results interpreted and used?What are the models assumptions and limit
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GeneralApproach toDecisionMaking
A decision making approach that frequenseeks to obtain a mathematically optimal
solutionLinear programmingQueuing techniquesInventory modelsProject models
Forecasting techniquesStatistical models
Quantitative Methods
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GeneralApproach toDecisionMaking
Performance MetricsAll managers use metrics to manage acontrol operations:Profits, costs, productivity and forecaaccuracy.
Metrics
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GeneralApproach toDecisionMaking
Analysis of Trade OffsA trade off is giving up one thing in rfor something else.Carrying more inventory (an expenseorder to achieve a greater level of cusservice.
Trade Offs
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GeneralApproach toDecisionMaking
Providing highly customize products or stends to be more labor intensive.Home remodeling, plastic surgeryCustomization
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GeneralApproach toDecisionMaking
System - a set of interrelated parts that must wotogether
The business organization is a system compsubsystems
marketing subsystem
operations subsystem
finance subsystem
The systems approach
Emphasizes interrelationships among subsyMain theme is that the whole is greater thasum of its parts
The output and objectives of the organizatioprecedence over those of any one subsystem
Systems Approach
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GeneralApproach toDecisionMaking
In nearly all cases, certain issues or items are moimportant than others
Recognizing this allows managers to focus theirattention to those efforts that will do the most goPareto Phenomenon - a few factors account for a percentage of occurrence of some event(s)
8020 Rule: 80% of problems are caused by 20activities.
The critical few factors should receive the higheThis is a concept that is appropriately applied toand levels of management
Establishing Priorities
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GeneralApproach toDecisionMaking
Ethical issues arise in many aspects of operationsmanagement:
Financial statementsWorker safety
Product safetyQuality
The environment
The communityHiring and firing workers
Closing facilitiesWorkers rights
Ethics
HISTORICAL EVOLUTION OF OPERATIONS
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
Industrial Revolution
Scientific Management
The Human Relations Movement
Decision Models and Management Science
The Influence of Japanese Manufacturers
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Industrial Revolution
Craft Production
No economies of scaleSlow and costly
Began 1770 s in EnglandManagement theory and practice
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Scientific Managementbelieved in a science management baobservation, measurement, analysis aimprovement of work methods, and econ
incentives.
Frederick WinslowTaylor
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Scientific Management Frank Gilbreth father of motion study
Henry Gantt Gantt chart
Harrington Emerson
Henry Fordo Moving assembly lines Mass Production
The Human Relations
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The Human RelationsMovement
Lilian Gilbreth (1920s)
Elton Mayo (1930s)o Hawthorne Studies
Abraham Maslow (1940s)
Frederick Hertzberg (1950s)
Douglas McGregor (19
William Ouchi (1970s) Theory Z
Decision Models and Management
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Decision Models and ManagementScience
F.W. Harris mathematical model for inventory management, 1915
Dodge, Romig, and Shewart statistical procedures for sampling anquality control, 1930s
Tippett statistical sampling theory, 1935
Operations Research (OR) Groups OR applications in warfare
George Dantzig linear programming, 1947
The Influence of Japanese
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The Influence of JapaneseManufacturers
o Quality Revolution
o Just-in-Time production
KEY TRENDS IN BUSINES
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KEY TRENDS IN BUSINES The Internet, E-commerce, E-business Management of Technology Globalization Outsourcing Sustainability Agility Ethical behavior
ISSUES IN BUSINESS
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ISSUES IN BUSINESS Operations Strategy
Working with fewer resources
Revenue Management
Process analysis and improvement, and quality improvement
Lean Production
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The Need for Managing the Supply Cha In the past, organizations did little to
manage the supply chain beyond theirown operations and immediate supplierswhich led to numerous problems:
o Inventory stockoutso Late deliverieso Quality problems
Elements of Supply Chain
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Elements of Supply ChainManagement
Customers Forecasting Design Capacity planning Processing Inventory
Purchasing Suppliers Location Logistics
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