Introduction to Operations Management

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CHAPTER 1
INTRODUCTION TO Operations Management
Teaching Notes
Many students come to this course with negative feelings, perhaps because they have heard that the course includes a certain amount of quantitative material (which many feel uncomfortable with), or perhaps because the course strikes them as “how to run a factory.” Others seem to have very little idea about what operations management is. I view the initial meeting with my classes, and this first chapter, as opportunities to dispel some of these notions, and to generate enthusiasm for the course. Highlights of the chapter include the following:

1.Operations as one of the three main functional concerns of most organizations. 2.The role and job of the operations manager as a planner and decision-maker. 3.Different ways of classifying (and understanding) production systems. 4.System design versus system operation.

5.Major characteristics of production systems.
6.Contemporary issues in operations management.
7.Operations as essentially managerial (planning, staffing, etc.) 8.The historical evolution of production/operations management. 9.Manufacturing operations versus service operations.

Reading: The Challenges of Managing Services
1. In comparison to manufacturing industry, services have: a. Less structured jobs.
b. Higher customer contact.
c. Lower worker skills.
d. Low skill entry-level positions.
e. Higher employee turnover.
f. Higher input variability.
2. Because of the factors listed in the answer to question 1, in service industry it is more difficult to control costs and quality resulting in lower productivity. In addition the risk of customer dissatisfaction is greater and employee motivation is lower. Readings: Why Manufacturing Matters

1.Since the U.S. economy is becoming more service based, the percentage of employment in manufacturing is declining while the percentage of employment in service industry is increasing. An agile manufacturer is able to switch quickly and economically from one product to another with very little disruption.

2. Yes, the business leaders and the government officials should be concerned about declining percentage of manufacturing jobs because of a variety of reasons including the following: a. Manufacturing provides 70% of the U.S. exports.

b. The average compensation for a worker from manufacturing industry is 20% greater than the average of all workers in the U.S. c. Compared to service industry employees, the manufacturing employees are more likely to have a better benefits package. d. Productivity growth in manufacturing is much higher than productivity growth in the U.S. economy’s overall productivity growth. e. Even though manufacturing employment accounts for a smaller portion of the employment for U.S. than the service industry, the manufacturing accounts for more than 50% of the Research and Development in the United States.

Operations Tour: Wegmans Food Markets
1.Customers judge the quality of a supermarket based on:
a.Quality of individual products.
b.Exterior and interior physical look of the store.
c.Effectiveness and efficiency of service personnel.
2.a.Customer satisfaction is the major key to the success of any operation, without it the company cannot survive. b.Forecasting allows the company to plan the workforce levels, purchase quantities, inventory levels and capacity. c.Capacity planning allows the company to balance the trade-off between shortages and excess inventories and between waiting lines and idle time. d.A good location can have a significant impact in attracting customers, thus improving sales. e.Planning and controlling levels of inventory will assist with avoiding stockouts and avoiding excess inventory levels. f.Good layout of the store can assist in maximizing customer service and sales by strategically directing customers through the store. An effective layout can also improve the...
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