Chapter 1 – Operations and Productivity

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Operations Management
Chapter 1 – Operations and Productivity
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e © 2008 Prentice Hall, Inc. 1–1

Outline
 Global Company Profile: Hard Rock

Cafe  What Is Operations Management?  Organizing to Produce Goods and Services  Why Study OM?  What Operations Managers Do  How This Book Is Organized
© 2008 Prentice Hall, Inc. 1–2

Outline - Continued
 The Heritage of Operations

Management  Operations in the Service Sector
 Differences between Goods and

Services  Growth of Services  Service Pay

 Exciting New Trends in Operations

Management
© 2008 Prentice Hall, Inc. 1–3

Outline - Continued
 The Productivity Challenge
 Productivity Measurement  Productivity Variables  Productivity and the Service Sector

 Ethics and Social Responsibility

© 2008 Prentice Hall, Inc.

1–4

Learning Objectives
When you complete this chapter you should be able to: 1. Define operations management 2. Explain the distinction between goods and services 3. Explain the difference between production and productivity

© 2008 Prentice Hall, Inc.

1–5

Learning Objectives
When you complete this chapter you should be able to: 4. Compute single-factor productivity 5. Compute multifactor productivity 6. Identify the critical variables in enhancing productivity

© 2008 Prentice Hall, Inc.

1–6

The Hard Rock Cafe
 First opened in 1971
 Now – 121 restaurants in over 40 countries

 Rock music memorabilia  Creates value in the form of good food

and entertainment  3,500+ custom meals per day in Orlando  How does an item get on the menu?  Role of the Operations Manager © 2008 Prentice Hall, Inc. 1–7

What Is Operations Management?
Production is the creation of goods and services Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs © 2008 Prentice Hall, Inc. 1–8

Organizing to Produce Goods and Services
 Essential functions:
 Marketing – generates demand  Production/operations – creates

the product  Finance/accounting – tracks how well the organization is doing, pays bills, collects the money

© 2008 Prentice Hall, Inc.

1–9

Organizational Charts
Commercial Bank Operations
Teller Scheduling Check Clearing Collection Transaction processing Facilities design/layout Vault operations Maintenance Security © 2008 Prentice Hall, Inc.

Finance
Investments Security Real estate Accounting Auditing

Marketing
Loans Commercial Industrial Financial Personal Mortgage Trust Department Figure 1.1(A)
1 – 10

Organizational Charts
Airline Operations
Ground support equipment Maintenance Ground Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications Dispatching Management science © 2008 Prentice Hall, Inc.

Finance/ accounting
Accounting Payables Receivables General Ledger Finance Cash control International exchange

Marketing
Traffic administration Reservations Schedules Tariffs (pricing) Sales Advertising

Figure 1.1(B)
1 – 11

Organizational Charts Manufacturing
Operations
Facilities
Construction; maintenance

Finance/ accounting
Disbursements/ credits Receivables Payables General ledger Funds Management Money market International exchange Capital requirements Stock issue Bond issue and recall

Marketing
Sales promotion Advertising Sales Market research

Production and inventory control
Scheduling; materials control

Quality assurance and control Supply chain management Manufacturing Tooling; fabrication; assembly

Design
Product development and design Detailed product specifications

Industrial engineering
Efficient use of machines, space, and personnel

Process analysis
Development and installation of production tools and equipment © 2008 Prentice Hall, Inc.

Figure 1.1(C)
1 – 12

Why...
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