Operations Management Chap 1 Ppt

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

§ §

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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

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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

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The Organization
Figure 1.1

The Three Basic Functions
Organization

Finance

Operations

Marketing

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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

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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.

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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

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Food Processor
Table 1.2

Inputs
Raw Vegetables Metal Sheets Water Energy Labor Building Equipment