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Operation Management Chap001 by irf28189

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                                                          OBJECTIVES

                                                              Operations Management
                                                              Why Study Operations Management?
                                                              Transformation Processes Defined
                                                              Operations as a Service
                                                              The Importance of Operations Management
                                     Chapter 1
                                                              Historical Development of OM
                       Introduction to the Field
                                                              Current Issues in OM
                                 September 24, 2008



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                                                      3                                                                            4



What is Operations Management?                            Why Study Operations Management?

                                                                                   Systematic Approach to
    Operations management (OM) is defined as                                       Org. Processes

    the design, operation, and improvement of
    the systems that create and deliver the firm’s
    primary products and services                                                      Production &
                                                              Business Education       Operations           Career Opportunities
                                                                                       Management




                                                                                   Cross-Functional
                                                                                   Applications


3                                                         4
                                                   5                                                 6



What is a Transformation Process?                      Transformations

    A transformation process is defined as a use
                       p                                   Physical--manufacturing
    of resources to transform inputs into some
                                                           Locational--transportation
    desired outputs
                                                           Exchange--retailing

                                                           Storage--warehousing

                                                           Physiological--health care

                                                           Informational--telecommunications

5                                                      6




                                                   7                                                 8



What is a Service and What is a Good?                  OM in the Organization Chart

         y      p       y
     “If you drop it on your foot, it won’t hurt
                                 ,                             Finance    Operations             g
                                                                                         Marketing
     you.” (Good or service?)

                                                               Plant      Operations     Director
     “Services never include goods and goods                  Manager      Manager
                              (              )
     never include services.” (True or false?)
                                                               Manufacturing, Production control,
                                                                Quality assurance, Engineering,
                                                                 Purchasing, Maintenance, etc
                                                                           g
7                                                      8
                                                9                                                           10



Core Services                                        Core Services Performance Objectives


                                                                              Quality


      Core services are basic things
      that customers want from                                             Operations
                                                            Flexibility                      Speed
      products they purchase                                               Management




                                                                           Price (or cost
                                                                            Reduction)


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                                                11                                                          12



Value-Added Services                                 Value-Added Service Categories

                                                                          Problem Solving



     Value-added services differentiate the
     organization from competitors and build
                                                                           Operations
     relationships that bind customers to the             Information
                                                                           Management
                                                                                            Sales Support

     firm in a positive way



                                                                           Field Support


11                                                   12
                                                    13                                                   14
The Importance of Operations
Management                                               Historical Development of OM

     Synergies must exist with other functional               JIT and TQC
     areas of the organization                                M   f     i S          P di
                                                              Manufacturing Strategy Paradigm
     Operations account for 60-80% of the
                                                              Service Quality and Productivity
     direct expenses that burden a firm’s profit.
                                                              Total Quality Management and Quality
                                                              Certification

                                                              Ref: p. 17



13                                                       14




                                                    15                                                   16



Historical Development of OM (cont’d)                    Current Issues in OM


     Business Process Reengineering                            Coordinate the relationships between
                                                               mutually supportive but separate
                                                               organizations.
     Supply Chain Management
                                                               Optimizing global supplier, production,
     Electronic Commerce                                       and distribution networks.

                                                               Increased co-production of goods and
                                                               services


15                                                       16
                                                        17                                                              18



Current Issues in OM (cont’d)                                Question Bowl

                                                                  A major objective of this book is to show how smart
                                                                                    d     hi h f the f ll i ?
                                                                     managers can do which of th following?
      Managing the customer’s experience during
                                                                  a. Improve efficiency by lowering costs
      the service encounter
                                                                  b. Improve effectiveness by creating value
      Raising the awareness of operations as a                    c. Increasing value by reducing prices
                                                                  d. Serving customers well
      significant competitive weapon
                                                                  e. All of the above



                                                                  Answer: e. All of the above

17                                                           18




                                                        19                                                              20



Question Bowl                                                Question Bowl

     In the Input-Transformation-Output Relationship,
                                                                  In which of the following decades did the
         a typical “input” for a Department Store is
                                                                     concept of quality control originate?
         which of the following?
                                                                  a. 1920’s
     a. Displays
                                                                  b. 1930’s
     b. Stocks of goods
     c.  Sales clerks                                             c. 1940’s
     d. All of the above                                          d. 1950’s
                                                                               Answer: b. 1930’s (Tools such
     e. None of the above                                         e. 1970’s
                                                                                 as sampling inspection and
                                                                                         p g p
     Answer: e. None of the above (The above are                                 statistical tables where first
     considered “Resources” of a department store.                               developed by Walter Shewhart,
     The correct answer is “Shoppers”.)                                          H. F. Dodge, and H. G. Romig.)
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