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Chapter 1: Introduction to the Field

Chapter 2: Operations and SupplyStrategy

Chapter 2A: Linear Programming Chapter 3: Project Management

Term Project Discussion

Week 1 Requirements:

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Chapter 1

Introduction to the Field

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Operations Management (OM)

Why Study OM?

Transformation Processes Defined Operations as a Service

The Importance of OM

Historical Development of OM Current Issues in OM

OBJECTIVES:

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What is Operations & SupplyManagement?

Operations & Supply Management

(OM) is defined as the design,operation, and improvement of the

systems that create and deliver the

firms primary products and

services

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The Scope of Operations andSupply Management (OSM)

Operations

Management

Supply Chain Management

1st tiersuppliers

n tiersuppliers

.Distributors Customers

LogisticsStrategic

Sourcing

Stakeholders

McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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The Importance ofOperations Management

Synergies must exist with other

functional areas of the

organization

Operations account for 60-80% ofthe direct expenses that burden

a firms profit.

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Why Study OperationsManagement?

Business Education

Systematic Approach

To

Organizational Processes

Career Opportunities

Cross-Functional

Applications

OperationsManagement

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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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What is a TransformationProcess?

A transformation process is defined

as a use of resources to transform

inputs into some desired outputs

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Transformations Physical--manufacturing

Locational--transportation

Exchange--retailing

Storage--warehousing

Physiological--health care

Informational--telecommunications

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Operations and Supply ManagementSupply Chain Processes

Sourcing

Processes

Manufacturing

Processes

Service

Processes

Distribution

Processes

Logistics

Processes

Logistics

Processes

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What are Goods

and

What is a Service ?

If you drop it on your foot, it may hurt you. (Good or Service?)

Goods

Services never include goods and goods never include

services. (True or False?)

False

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The Goods-Services Continuum

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Value-Added services differentiate

the organization from competitors

and build relationships that bind

customers to the firm in a positive

way

What are Value-Added Services?

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Value-Added Service Categories

OperationsManagement

Information

Problem Solving

Sales Support

Field Support

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Historical Summary of OM

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Historical Summary of OM

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Current Issues in OM Coordinate the relationships between

mutually supportive but separate

organizations.

Optimizing global supplier, production,

and distribution networks.

Increased co-production of goods and

services.

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Current Issues in OM

Managing customer touch points.

Raising senior management

awareness of operations as a

significant competitive weapon.

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Assignment

Required Reading: Pages 4 - 18Questions: Page 19 #1, 5, 10 & 11

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Question BowlA major objective of this book is to show how smart

managers can do which of the following?

a. Improve efficiency by lowering costsb. 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 BowlIn the Input-Transformation-Output Relationship,

a typical input for a Department Store is

which of the following?

a. Displaysb. Stocks of goods

c. Sales clerks

d. All of the above

e. None of the above

Answer: e. None of the above (The above are

considered 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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End of Chapter 1