eman 003 part 1 operations management

8/6/2019 EMAN 003 Part 1 Operations Management

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EMAN 003Engr. Lina D. dela Cruz

Introduction for EngineeringManagement

Part 1 ± OperationsManagement



Engineering Management

Definition

Engineering management is thediscipline where engineers

combine management skills withtechnical expertise to coordinatework in various technical fieldssuch as product design,development,and manufacturing.



The aim of the field is to combinepractical knowledge of the business

side of engineered things ² includingthe financial side of the business, aswell as human resource management,communications, and other things thatimpact the overall success of theproduct as a commercial entity ² withtechnical knowledge of design andengineering.



What is Operations

Management It involves managing people,

equipment, technology, information,

and many other resources.Operations management is the central

core function of every company.



What is Operations

Management Without operations, there would be no

goods or services to sell. Consider a

retailer such as Gap that sells casualapparel. The marketing function

provides promotions for the

merchandise, and the ¿nance function

provides the needed capital.



What is Operations

Management It is the operations function, however,

that plans and coordinates all the

resources needed to design, produce,and deliver the merchandise to the

various retail locations.

Without operations, there would be no

goods or services to sell

to customers.



R ole of operations management

The role of operations management is totransform a company¶s inputs into the¿nished goods or services.

Inputs include human resources (such asworkers and managers), facilities andprocesses (such as buildings andequipment), as well as materials,

technology, and information. Outputs are the goods and services a

company produce




At a factory the transformation is thephysical change of raw materials intoproducts, such as transforming leather and

rubber into sneakers, denim into jeans, or plastic into toys.

At an airline it is the efficient movement of passengers and their luggage from onelocation to another.

At a hospital it is organizing resources suchas doctors, medical procedures, andmedications to transform sick people intohealthy ones.




Operations management is responsible for

orchestrating all the resources needed to

produce the ¿nal product. This includes designing the product;

deciding what resources are needed;

arranging schedules, equipment, and

facilities; managing inventory; controllingquality; designing the jobs to make the

product; and designing work methods.




Basically, operations management isresponsible for all aspects of the

process of transforming inputs intooutputs.

Customer feedback and performanceinformation are used to continually

adjust the inputs, the transformationprocess, and characteristics of theoutputs



HISTORICAL DEVELOPMENT

Why OM?

The importance of operations

management was not alwaysrecognized by business. In fact,

following World War II American

corporations were dominated by

marketing and ¿nance functions.



Operations management (OM) is the

business function responsible for planning,

coordinating, and controlling the resourcesneeded to produce a company¶s goods and

services.

OM is directly responsible for managing the

transformation of a company¶s inputs (e.g.,materials, technology, and information) into

¿nished products and services.



OM requires a wide range of strategic and tacticaldecisions.

Strategic decisions are long range and very broad in

scope (e.g., unique features of the company¶s productand process).

They determine the direction of tactical decisions,which are more short term and narrow in scope (e.g.,policy for ordering raw materials).

All organizations can be separated into manufacturing

and service operations, which differ based on producttangibility and degree of customer contact.

Service and manufacturing organizations have verydifferent operational requirements.



Historical Milestones

When we think of what operations management doesnamely, managing the transformation of inputs intogoods and services, we can see that as a function it is

as old as time. Think of any great organizational effort, such as

organizing the ¿rst Olympic games, building the GreatWall of China, or erecting the Egyptian pyramids, andyou will see operations management at work.

Operations management did not emerge as a formal

¿eld of study until the late 1950s and early 1960s,when scholars began to recognize that productionsystems face a common set of problems and to stressthe system approach to viewing operations processes.



The Industrial Revolution

Industrial revolution

An industry movement that changed

production by substituting machinepower for labor power.




The Industrial Revolution had a signi¿cantimpact on the way goods are producedtoday. Prior to this movement, products

were made by hand by skilled crafts peoplein their shops or homes.

Each product was unique, painstakinglymade by one person. The Industrial

Revolution changed all that. It started in the1770s with the development of a number of inventions that relied on machine power instead of human power.




The Industrial Revolution changed all that. It started inthe 1770s with the development of a number of inventions that relied on machine power instead of human power.

The most important of these was the steam engine,which was invented by James Watt in 1764. Thesteam engine provided a new source of power thatwas used to replace human labor in textile mills,machine-making plants, and other facilities.

The concept of the factory was emerging. In addition,the steam engine led to advances in transportation,such as railroads, that allowed for a wider distributionof goods.




About the same time, the concept of division of labor was introduce by AdamSmith in 1776 .

Division of labor means that the productionof a good is broken down into a series of small, elemental tasks, each of which isperformed by a different worker.

The repetition of the task allows the worker

to become highly specialized in that task. Division of labor allowed higher volumes to

be produced.




A few years later, in 1790, Eli Whitneyintroduced the concept of i nterchangeable par t s.

Prior to that time, every part used in aproduction process was unique. Withinterchangeable parts, parts arestandardized so that every item in a batchof items ¿ts equally.

This concept meant that we could movefrom one at a time production to volumeproduction, for example, in the manufactureof watches, clocks, and similar items.



Scienti¿c Management

Scienti¿c management

An approach to management that focusedon improving output by redesigning jobs

and determining acceptable levels of worker output.

Scienti¿c management was an approachto management promoted by FrederickW.Taylor at the turn of the twentieth

century. Taylor was an engineer with an eyefor ef¿ciency. Through scienti¿cmanagement he sought to increase worker productivity and organizational output.




Today many see scienti¿cmanagement as a major milestone in

the ¿eld of operations management,and it has had many inÀuences onoperations management.

For example, pi ec e r ate i nc ent iv es, in

which workers are paid in directproportion to their output, came out of this movement.




Also, a widely used method of workmeasurement, stopwatch t i me studi es, wasintroduced by Frederick Taylor.

In stopwatch time studies, observations aremade and recorded of a worker performinga task over many cycles. This information isthen used to set a time standard for

performing the particular task. This method is still used today to set a time

standard for short, repetitive tasks.



The Human Relations Movement

A philosophy based on the recognition thatfactors other than money can contribute toworker productivity.

Recent studies have shown thatenvironmental factors in the workplace,such as adequate lighting and ventilation,can have a major impact on productivity.

However, this does not contradict theprinciple that attention from management isa positive factor in motivation.



Management Science

A ¿eld of study that focuses on thedevelopment of quantitative techniques to solveoperations problems.

Many quantitative tools were developed tosolve problems in forecasting, inventory control,project management, and other areas.

Management science is a mathematicallyoriented ¿eld that provides operations

management with tools that can be used toassist in decision making. A popular example of such a tool is linear programming.



The Computer Age

The 1970s witnessed the advent of the widespread useof computers in business. With computers, many of thequantitative models developed by management sciencecould be used on a larger scale.

Data processing was made easier, with important effectsin areas such as forecasting, scheduling, and inventorymanagement.

A particularly important computerized system, materialrequirements planning (MRP), was developed for inventory control and scheduling.

Material requirements planning was able to process hugeamounts of data to compute inventory requirements anddevelop schedules for the production of thousands of items. This type of processing was impossible before theage of computers.



Just-in-Time

A philosophy designed to achievehigh-volume production through

elimination of waste and continuousimprovement.

This is achieved through coordinationof the Àow of materials so that the

right parts arrive at the right place inthe right quantity; hence the term, j ust-i n-t i me.



Total Quality Management

Total quality management

A philosophy that seeks to improve

quality by eliminating causes of product defects and by making quality

the responsibility of everyone in the

organization.

With TQM everyone in the company is

responsible for quality.



Global Marketplace

A trend in business focusing on customers, suppliers,and competitors from a global perspective.

Today businesses must think in terms of a globalmarketplace in order to compete effectively. This

includes the way they view their customers,competitors, and suppliers. Key issues are meetingcustomer needs and getting the right product tomarkets as diverse as the Far East, Europe, or Africa.Operations management is responsible for most of these decisions.

OM decides whether to tailor products to differentcustomer needs, where to locate facilities, how tomanage suppliers, and how to meet local governmentstandards.



Environmental Issues

A trend in business to consciously reducewaste, recycle, and reuse product and parts.

There is increasing emphasis on the need to

reduce waste, recycle, and reuse products andparts. Society has placed great pressure onbusiness to focus on air and water quality,waste disposal, global warming, andother environmental issues. Operations

management plays a key role in redesigningprocesses and products in order to meet andexceed environmental quality standards.



Operations managers need to work closely

with all other business functions in a team

format.

Marketing needs to provide information

about customer expectations. Finance

needs to provide information about budget

constraints.

In turn, OM must communicate its needs

and capabilities to the other functions.

eman 003 part 1 operations management

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