Operations ManagementIntroduction - Chapter 1.ppt

Operations ManagementIntroduction - Chapter 1 Outline What is Operations Management? Why Study OM? Production vs. Service Organizations. Operations Management Decisions. Heritage of OM. Recent Developments Challenges. Productivity. What Is Operations Management? Book definition (not as good): The set of activities that creates goods and services by transforming inputs into outputs. Transforming Inputs to Outputs Examples Auto factories (assembly plants) Job shops (printing) Fast food restaurants Why Study OM? OM is one of three major functions of any organization (Marketing, Finance, and Operations). We should know how goods and services are produced. OM is such a costly part of an organization. Jobs! Organizational Functions Marketing. Generates demand. Characteristics of Goods Characteristics of Service Goods Contain Services Services Contain Goods OM Jobs Operations Management for a Manufacturer Operations Management for an Airline Critical Decisions for OM Product service design. Quality management. Process design. Capacity location of facilities. Layout of facilities. Human resources Job design. Supply-chain management. Inventory management. Scheduling. Maintenance. Skills and Knowledge Needed Knowledge of production and service processes. Knowledge of basic OM principles. Analytical Tools: Forecasting Decision-Making Linear Programming Break-even analysis Inventory control Waiting lines (queueing) Heritage of OM Industrial Revolution Scientific Management Related Fields Eli Whitney Recent Developments for OM Development of the Service Economy Most Jobs are in Services Productivity How Would You Measure Productivity for A Restaurant? Amount of output (????) per input (????). Output: Number of meals served? Number of tables served? Number of satisfied customers? Input: Lbs. of food? Number of employees? Number of tables? Productivity for One Product Productivity Variables Output Labor + material + energy + capital + miscella