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Chapter 1

Overview: Introduction to the Field Operations Management Why Study Operations Management? Production System Defined Types of Transformations Objectives of Operations Management Goods Versus Services Plan of the Course OSCM Jobs OSCM Placement and Salary Statistics

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What is Operations Management?Formal Definition

Operations management (OM):

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OM involves management of the entire system that produces a good or service

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Why Study Operations Management?

Operations Management

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What is a Production System?Defined

A production system uses resources to

transform inputs into some desired outputs.

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Types of Transformations

Physical--

Locational--

Exchange--

Storage--

Physiological--

Informational--

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Core services: basic things that customers want from products they purchase.

The 4 Objectives of Operations Management

1. 2. 3. 4.

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Goods Versus Services - Continued

Tangible product Consistent product

definition Production usually

separate from consumption

Can be inventoried Can be resold Some aspects of

quality measurable

GoodsGoods ServiceService

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Goods Versus Services

Low customer interaction

Product is transportable

Site of facility important for cost

Often easy to automate

GoodsGoods ServiceService

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Goods Contain Services & Services Contain Goods

0 25 50 75 100255075100

AutomobileComputer

Installed CarpetingFast-food Meal

Restaurant MealAuto RepairHospital Care

Advertising AgencyInvestment Management

Consulting ServiceCounseling

Percent of Product that is a Good Percent of Product that is a Service

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Plan of This Course1. Gaining a competitive advantage - strategy,

project management2. Product Design and Process Selection - goods,

services, quality, analysis3. Supply Chain design - JIT, ERP, electronic

commerce, supply chain strategy, capacity management

4. Planning and controlling the supply chain - forecasting, aggregate planning, MRP, inventory management, TOC

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Where Are the OM Jobs? Technology/methods Facilities/space utilization Strategic issues Response time People/team development Customer service Quality Cost reduction Inventory reduction Productivity improvement Supply chain analyst/management