Introduction to Operations Management Before I speak, I have something important to say… -Groucho Marx CHAPTER 1 actical Operations Manageme
Introduction to Operations Management Before I speak, I have something important to say… -Groucho Marx.
Mar 31, 2015
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Introduction to Operations Management
Before I speak, I have something important to say…-Groucho Marx
CHAPTER
1
Practical Operations Management
Tasks ahead:
• Defining Operations Management
• Classifying Operations
• Finding Operations Managers
CHAPTER
1
Practical Operations Management
operationsA set of activities dedicated to the transformation of inputs into outputs of greater value.
A MODEL OF ANY KIND OF OPERATION
Inputs
Resources• People• Materials• Equipment• Knowledge• Infrastructure
A MODEL OF ANY KIND OF OPERATION
Inputs Transformation
Resources• People• Materials• Equipment• Knowledge• Infrastructure
Operations• Assembly• Transportation• Extraction• Cultivation• Fabrication
A MODEL OF ANY KIND OF OPERATION
Inputs Transformation Outputs
Resources• People• Materials• Equipment• Knowledge• Infrastructure
Operations• Assembly• Transportation• Extraction• Cultivation• Fabrication
Outputs• Goods and services• Employment• Pollution
value-addedThe difference between the total value of the outputs and the total value of the inputs associated with anoperation.
VALUE CREATION
THREE ELEMENTS OF VALUE CREATION
VALUE CREATION
Productivity
THREE ELEMENTS OF VALUE CREATION
productivityA measurement of valuecreation, calculated asa ratio of the values ofoutput to input.
Inputs Transformation Outputs
Output
Inputs
Productivity
VALUE CREATION
Productivity
THREE ELEMENTS OF VALUE CREATION
Sustainability
VALUE CREATION
Productivity
THREE ELEMENTS OF VALUE CREATION
sustainabilityThe degree to whichactivity with immediatebenefit does not incurgreater costs in the longterm.
Recycling symbol = Input / Output Model twisted into a loop.
greenAssures sustainability.
biomimicryThe imitation of naturalprocesses and systems.
Sustainability
VALUE CREATION
Productivity
THREE ELEMENTS OF VALUE CREATION
Sustainability
VALUE CREATION
Responsibility Productivity
THREE ELEMENTS OF VALUE CREATION
responsibilityAn obligation to perform.
ethicsPrinciples governingconduct, delineating good from bad.
Inputs OutputsTransformation
CLASSIFYING AN OPERATION
TangibilityGood or service?
Inputs OutputsTransformation
CLASSIFYING AN OPERATION
tangibilityThe degree of perceivable, physical essence of a product.
goodsTangible products.
goodsTangible products.
servicesIntangible products.
Finishedgood
Topassembly
Screenassembly
Bottomassembly
Topcasing
Keypad Flatscreen
Backlight frame
CPUcard
Powersupply
Bottomcasing
A Bill of Materials for Manufacture of a Tangible Good
Physical Therapy as a pure service.
Goods operations Service operations
Tangible products Intangible products
COMPARING GOODS AND SERVICES(Generalities…)
Goods operations Service operations
Tangible products Intangible products
Less customer contact
More customer contact
COMPARING GOODS AND SERVICES(Generalities…)
Goods operations Service operations
Tangible products Intangible products
Less customer contact
More customer contact
More reliance on specialized equipment
Less reliance on specialized equipment
COMPARING GOODS AND SERVICES(Generalities…)
Goods operations Service operations
Tangible products Intangible products
More reliance on specialized equipment
Less reliance on skilled labor
Less reliance on specialized equipmentMore reliance on skilled labor
COMPARING GOODS AND SERVICES(Generalities…)
Less customer contact
More customer contact
TangibilityGood or service?
Inputs OutputsTransformation
CLASSIFYING AN OPERATION
TangibilityGood or service?
Inputs OutputsTransformation
Supply ChainsOne organization or many?
CLASSIFYING AN OPERATION
supply chainA system consisting of all organizations that play some role in supplying a particular product to a customer.
CUSTOMER
Retailer
Distributor
Manufacturer
Casingsupplier
Keypadsupplier
Card andmemory supplier
Flat Screensupplier
Supplier’ssupplier
Supplier’ssupplier
Supplier’ssupplier
Supplier’ssupplier
Supplier’ssupplier
Supplier’ssupplier
Supplier’ssupplier
A SUPPLY CHAIN SYSTEM
Goods moving through global supply chains.
TangibilityGood or service?
Inputs OutputsTransformation
Supply ChainsOne organization or many?
CLASSIFYING AN OPERATION
TangibilityGood or service?
Inputs OutputsTransformation
Supply ChainsOne organization or many?
GovernanceCommercial or nonprofit?
Uncertainty and Control
CLASSIFYING AN OPERATION
VARYING LEVELS OF UNCERTAINTY AND CONTROLIN OPERATIONS
More control Less control
Less uncertainty More uncertainty
Production And Service Management
Project Management
Event Management
Incident Management
scientific management
A methodology stressing the use of data collection and analysis to redesignprocesses and improveefficiency.
VARYING LEVELS OF UNCERTAINTY AND CONTROLIN OPERATIONS
More control Less control
Less uncertainty More uncertainty
Production And Service Management
Project Management
Event Management
Incident Management
VARYING LEVELS OF UNCERTAINTY AND CONTROLIN OPERATIONS
More control Less control
Less uncertainty More uncertainty
Production And Service Management
Project Management
projectA unique collectionof activities creating aparticular outcome.
VARYING LEVELS OF UNCERTAINTY AND CONTROLIN OPERATIONS
More control Less control
Less uncertainty More uncertainty
Production And Service Management
Project Management
VARYING LEVELS OF UNCERTAINTY AND CONTROLIN OPERATIONS
More control Less control
Less uncertainty More uncertainty
Production And Service Management
Project Management
Event Management
Incident Management
incidentAn unscheduled eventrequiring immediateresolution.
Inputs Transformation Outputs
Regional Disaster Relief Services (RDRS) provides assistance to the victims of natural disasters. RDRS relies on fund-raising to support its permanent network of 15 warehouses, housing its inventory of tents, trailers, tools, portable lighting, water-filtration equipment, and electrical generators. Upon news of a disaster, RDRS activates both its staff and volunteers to deploy and provide assistance in the field until permanent services are restored to the citizens of the disaster area.
What kind of operation is RDRS?
Scenario 1aClassifying Operations
Inputs Transformation Outputs
Scenario 1aClassifying Operations
Regional Disaster Relief Services (RDRS) provides assistance to the victims of natural disasters. RDRS relies on fund-raising to support its permanent network of 15 warehouses, housing its inventory of tents, trailers, tools, portable lighting, water-filtration equipment, and electrical generators. Upon news of a disaster, RDRS activates both its staff and volunteers to deploy and provide assistance in the field until permanent services are restored to the citizens of the disaster area.
What kind of operation is RDRS?
INCIDENT MANAGEMENTNON PROFIT
Inputs Transformation Outputs
Scenario 1aClassifying Operations
THE HIERARCHY OF DECISION-MAKING
THE HIERARCHY OF DECISION-MAKING
StrategyLong-termplanning
Identifyinggoals
strategyA methodology andresulting plan that identifies the long-term goals of an organization.
THE HIERARCHY OF DECISION-MAKING
StrategyLong-termplanning
Identifyinggoals
THE HIERARCHY OF DECISION-MAKING
Strategy
Tactics
Long-termplanning
Medium-termplanning
Identifyinggoals
Developing solutions
tacticsMeans to pursue strategic goals with available resources.
THE HIERARCHY OF DECISION-MAKING
Strategy
Tactics
Long-termplanning
Medium-termplanning
Identifyinggoals
Developing solutions
THE HIERARCHY OF DECISION-MAKING
Strategy
Tactics
Implementation
Long-termplanning
Medium-termplanning
Short-termplanning
Identifyinggoals
Developing solutions
Takingaction
Inputs Transformation Outputs
Regional Disaster Relief Services (RDRS) relies on other agencies for air transport, but recently proposed the purchase of six helicopters. RDRS managers were opposed, arguing that ground operations was the core competency of RDRS and it was more important to resolve disputes over the proper allocation of all-terrain vehicles (ATVs), than to acquire aviation at great expense. Several warehouses located close to wilderness areas have no idle ATVs, keeping their ATVs deployed throughout the wildfire season. Managers there want idle ATVs from urban-area RDRS warehouses to be transferred to their warehouses. Urban managers point out that the wilderness area managers leave ATVs in remote areas, speculating that an additional emergency might occur after the initial rescue or evacuation is completed. The urban warehouse managers suggest that wilderness area should put more effort into promptly retrieving the ATVs already assigned to them.
Scenario 1bClassifying Operational Decisions
Inputs Transformation Outputs
How many different decisions have been discussed?
At what level in the hierarchy of decision making are these decisions?
Scenario 1bClassifying Operational Decisions
Inputs Transformation Outputs
At what level in the hierarchy of decision making are these decisions?
Scenario 1bClassifying Operational Decisions
helicopter purchase
Inputs Transformation Outputs
At what level in the hierarchy of decision making are these decisions?
Scenario 1bClassifying Operational Decisions
helicopter purchase
ATV Allocation
Inputs Transformation Outputs
At what level in the hierarchy of decision making are these decisions?
Scenario 1bClassifying Operational Decisions
helicopter purchase
ATV Allocation
ATV Retrieval Policy
Operations
Finance Marketing
RELATIVE MIX OF THE THREE BUSINESS FUNCTIONS FOR A REGIONAL HOSPITAL
Operations
RELATIVE MIX OF THE THREE BUSINESS FUNCTIONS FOR A SINGLE JEWELRY STORE
Finance Marketing
Operations
Finance Marketing
RELATIVE MIX OF THE THREE BUSINESS FUNCTIONS FOR A RESORT HOTEL
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