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Transcript of Chap 001 operation management
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Chapter 1
Introduction to the Field
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Operations Management
Why Study Operations Management?
Transformation Processes Defined
Operations as a Service
The Importance of OperationsManagement
Historical Development of OMCurrent Issues in OM
OBJECTIVES
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What is Operations Management?
Defined
Operations management (OM) is
defined as the design, operation,and improvement of the systemsthat create and deliver the firms
primary products and services
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Why Study OperationsManagement?
Business Education
Systematic Approachto Org. Processes
Career Opportunities
Cross-FunctionalApplications
OperationsManagement
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What is a Transformation
Process?
Defined
A transformation process is definedas a user of resources to transforminputs into some desired outputs
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Operations as a
Transformation Process
Feedback
INPUT
MaterialMachines
Labor
Management
Capital
OUTPUT
Goods
Services
TRANSFORMATION
PROCESS
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Transformations
Physical--manufacturing
Locational--transportation
Exchange--retailing
Storage--warehousing
Physiological--health care
Informational--telecommunications
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What is a Service and What is aGood?
If you drop it on your foot, it wonthurt you. (Good or service?)
Services never include goods andgoods never include services. (Trueor false?)
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OM in the Organization Chart
Operations
Plant
Manager
Operations
Manager
Director
Manufacturing, Production control,
Quality assurance, Engineering,
Purchasing, Maintenance, etc
Finance Marketing
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Core servicesare basic things
that customers want fromproducts they purchase
Core ServicesDefined
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Core Services Performance Objectives
OperationsManagemen
t
Flexibility
Quality
Speed
Price (or costReduction)
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Value-added services
differentiate the organizationfrom competitors and buildrelationships that bind
customers to the firm in apositive way
Value-Added Services
Defined
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Value-Added Service Categories
OperationsManagement
Information
Problem Solving
Sales Support
Field Support
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Synergies must exist with other
functional areas of theorganization
Operations account for 60-80%
of the direct expenses thatburden a firms profit.
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Historical Development of OM
JIT and TQC
Manufacturing Strategy Paradigm
Service Quality and Productivity
Total Quality Management and Quality
Certification
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Historical Development of OM
(contd)Business Process Reengineering
Supply Chain Management
Electronic Commerce
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Historical Events in OM
Industrial RevolutionSteam engine 1769 James Watt
Division of labor 1776 Adam Smith
Interchangeable parts 1790 Eli Whitney
Scientific ManagementPrinciples 1911 Frederick W. Taylor
Time and motion studies 1911 Frank & Lillian GilbrethActivity scheduling chart 1912 Henry Gant
Moving assembly line 1913 Henry Ford
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Historical Events in OM
Human RelationsHawthorne studies 1930 Elton Mayo
Motivation theories 1940s Abraham Maslow
1950s Frederick Hertzberg
1960s Douglas McGregor
Management ScienceLinear programming 1947 George Dantzig
Digital computer 1951 Remington RandSimulation, PERT/CPM, 1950s Operations research
Waiting line theory groups
MRP 1960s Joseph Orlicky, IBM
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Historical Events in OM
Quality RevolutionJIT 1970s Taiichi Ohno, ToyotaTQM 1980s W. Edwards Deming,
Joseph Juran, et. al.
Strategy and operations Skinner, HayesReengineering 1990s Hammer, Champy
World Trade Organization 1990s Numerous countries
and companies
GlobalizationEuropean Union and 1970s IBM and others
other trade agreements
EDI, EFT, CIM 1980s
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Historical Events in OM
Information Age/
Internet Revolution
Internet, WWW, ERP 1990s ARPANET, TimSupply chain Berners-Lee, SAP, i2management, Technologies, ORACLE,E-commerce PeopleSoft, Amazon,
Yahoo, eBay,
and others
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Current Issues in OM
Coordinate the relationships betweenmutually supportive but separateorganizations.
Optimizing global supplier, production,and distribution networks.
Increased co-production of goods andservices
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Current Issues in OM (contd)
Managing the customersexperience during the serviceencounter
Raising the awareness of
operations as a significantcompetitive weapon
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Question Bowl
A major objective of this book is to show how smart
managers can do which of the following?
a. Improve efficiency by lowering costs
b. Improve effectiveness by creating value
c. Increasing value by reducing prices
d. Serving customers well
e. All of the above
Answer: e. All of the above
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Question Bowl
In the Input-Transformation-Output Relationship,a typical input for a Department Store is
which of the following?a. Displays
b. Stocks of goodsc. Sales clerksd. All of the abovee. None of the above
Answer: e. None of the above (The above areconsidered Resources of a department store.
The correct answer is Shoppers.)
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Question Bowl
In which of the following decades did theconcept of quality control originate?
a. 1920sb. 1930sc. 1940sd. 1950se. 1970s
Answer: b. 1930s (Tools such
as sampling inspection and
statistical tables where first
developed by WalterShewhart, H. F. Dodge, and H.
G. Romig.)
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