Operations Management Chap 1 Ppt

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1

Introduction to Operations Management

McGraw-Hill/Irwin

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
§ § Define the term operations management Identify the three major functional areas of organizations and describe how they interrelate Compare and contrast service and manufacturing operations Describe the operations function and the nature of the operations manager’s job

§ §

1-2

Learning Objectives
§ Differentiate between design and operation of production systems § Describe the key aspects of operations management decision making § Briefly describe the historicalevolution of operations management § Identify current trends that impact operations management

1-3

Operations Management
§ Operations Management is: The management of systems or processes that create goods and/or provide services § Operations Management affects: § Companies’ ability to compete § Nation’s ability to compete internationally

1-4

The Organization
Figure 1.1

The Three Basic Functions
Organization

Finance

Operations

Marketing

1-5

Value-Added Process
Figure 1.2

The operations function involves the conversion of inputs into outputs Value added
Inputs Land Labor Capital Transformation/ Conversion process Feedback

Outputs Goods Services

Control
Feedback Feedback

1-6

Value-Added & Product Packages
§ Value-added is the difference between the cost of inputs and the value or price of outputs. § Product packages are a combination of goods and services. § Product packages can make a company more competitive.

1-7

Goods-service Continuum
Figure 1.3

Goods

Service Surgery, teaching Song writing, software development Computer repair, restaurant meal

Automobile Repair, fast food Home remodeling, retail sales Automobile assembly, steel making

1-8

Food Processor
Table 1.2

Inputs
Raw Vegetables Metal Sheets Water Energy Labor Building Equipment

Processing
Cleaning Making cans Cutting Cooking Packing Labeling

Outputs
Canned vegetables

1-9

Hospital Process
Table 1.2

Inputs
Doctors, nurses Hospital Medical Supplies Equipment Laboratories

Processing
Examination Surgery Monitoring Medication Therapy

Outputs
Healthy patients

1-10

Manufacturing or Service?

Tangible

Act

1-11

Production of Goods vs. Delivery of Services
§ Production of goods – tangible output § Delivery of services – an act § Service job categories § § § § § § § Government Wholesale/retail Financial services Healthcare Personal services Business services Education 1-12

Key Differences
1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity

1-13

Key Differences
6. Production and delivery 7. Quality assurance 8. Amount of inventory 9. Evaluation of work 10. Ability to patent design

1-14

Goods vs Service
Characteristic Customer contact Uniformity of input Labor content Uniformity of output Output Measurement of productivity Opportunity to correct problems Inventory Evaluation Patentable Goods Low High Low High Tangible Easy High Much Easier Usually Service High Low High Low Intangible Difficult Low Little Difficult Not usual 1-15

Scope of Operations Management
§ Operations Management includes:
§ § § § § § § § § Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities Supply chain management And more . . . 1-16

Types of Operations
Table 1.4

Operations
Goods Producing

Examples

Farming, mining, construction, manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts,...
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