Introduction. Learning Objectives. What Is Operations Management? PMBA8155 Operations Management

Transcription

1 PMBA8155 Operations Management Introduction 1 Learning Objectives Understand What Operations Management (OM) Is About Operations/Production Systems and Their Major Components Operations Efficiency and Effectiveness How Firms Add Value and Gain Competitive Advantage through Operations Excellence Why Study OM Historical Landmarks of OM Current Issues in OM Difference between Goods and Services 2 What Is Operations Management? Operations Management (OM) concerns about the management of all activities and resources that create and deliver an organization s goods and services to its customers OM focuses on how to efficiently and effectively create products and services that attain and enhance a firm s competitive advantages 3

2 What Is An Operations/production System? Transformation processes that convert inputs into some desired outputs Resources Inputs Transformation Process Outputs 4 Operations/Production System People Plants Parts Processes Planning & Control Materials Customers Transformation Process Goods Services 5 What Is Operations System? Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications 6

3 Transformations Physical Operations Are Everywhere! Storage / Locational Exchange Physiological Informational Examples Farming, mining, construction Warehousing, trucking, mail, taxis, buses, hotels, airlines Trade, retailing, wholesaling, renting, leasing, loans Radio, movies, concerts, recording Newspapers, journals, radio, TV, telephones, cable, satellite 7 What is Operations System? Examples of Operations Systems System Inputs/Resources Conversion Output (desired) Hospital Restaurant Automobile Plant University Patients MDs, Nurses Medical Supplies Equipment Hungry Customers Food, Chef Servers Environment Sheet Steel Engine Parts Tools, Equipment Workers High School Grads Teachers, Books Classroom Health Care Prepare Food Serve Food Fabrication and Assembly of Cars Transferring of Knowledge and Skills Healthy Individuals Satisfied Customers High Quality Automobiles Educated Individuals 8 What is Operations System? A Supply Chain System Suppliers Manufactures Warehouses & Distribution Centers Customers 9

4 What is Operations System? Supply Chain Processes 10 What Is Operations System? Efficient and Effective Transformation Efficient Transformation Produce goods or provide services using the smallest resource inputs Effective Transformation Provide the right goods/services to create the most value for the company 11 What Is Operations System? Value-Added Transformation Value = Total benefits to customer Cost of the product/service The output should be of greater value than the sum of inputs Productivity (the ratio of outputs to inputs) should be high Operations is the fundamental means by which firms can add value and increase productivity 12

5 What is Operations System? How Do Firms Add Value? Greater productivity Lower costs and/or more products Lower prices for the customer Higher quality Better performance Greater durability, reliability, aesthetics,... Better timeliness Faster response On-time delivery, meet promises Greater flexibility Quick changeover for changing market/demand Greater variety or mass customization 13 Outputs from Operations Systems Services vs. Goods Goods Tangible Can be inventoried Low customer contact Low variability Services Intangible Cannot be inventoried High customer contact High variability 14 Services vs. Goods Quiz If you drop it on your foot, it won t hurt you. (Good or service?) Services never include goods and goods never include services. (True or false?) 15

6 Service or Manufacturing? McDonald s Manufactures tangible goods? General Electric More revenues from service units 16 Service Operations Back Office Front Office Customer Goods Services Examples: Restaurants, Banks, Airlines 17 Manufacturing in U.S. Is it true that manufacturing in U.S. is dead or dying? 18

7 A Value Package Usually Contains Both Goods and Services Goods Automobile Computer Installed carpeting Fast Food Restaurant Services Banking Consulting Percent of product that is a good Percent of product that is a service 19 Reading: What factory managers can teach hospital wards What does lean mean in the article? Discuss your experience on lean techniques used in a service setting. What are the benefits for hospitals to bring in managers from other industries, particularly manufacturing? Do you see the same benefits if you are in a different service industry? What are the concerns? Discuss the advantages and disadvantages of having an operations improvement professional on staff versus hiring consultants for improvement efforts. 20 Who Are Operations Managers? All mangers are Operations Managers! Managers transform inputs into outputs Example: Accounting Manager Inputs: data, information, labor Transformation: application of accounting principles and knowledge Outputs: accounting reports, knowledge of performance All of us are Operations Managers!! 21

8 Why Study Operations Management? Learn systematic approaches to org. processes Learn best ways to manage Operations process Operations Management An essential component of business education Increase career opportunities 22 Three Key Functions of A Firm Operations Finance Marketing Finance provides capital Marketing establishes demand Operations creates goods and services 23 Operations Function As the Technical Core Operations Marketing Finance and Accounting Human Resources Outside Suppliers 24

9 Historical Landmarks of OM Scientific management (1911) Moving assembly line (1913) Hawthorne studies (1930s) Operations research (1940s-1960s) Quality revolution (1970s-1990s) Information technology (1980s-1990s) Globalization (1990s) 25 Important Issues in OM --more, better, cheaper, faster, anywhere, anytime Competing with time Competing with flexibility Competing with quality Competing with technology Competing with supply chain 26 Materials Customers Process Anls Product and Service Design Facility Location and Layout* Simulation* Operations Management Operations Strategy Operations/Production System Design Improvement Planning Quality Mgmt Process Control Lean Production Supply Chain Mgmt Waiting Line Analysis* Products Services Forecasting* Capacity Planning Aggregate Planning Inventory Mgmt MRP Scheduling* Project Mgmt * Topics not covered in this course 27 23