7/29/2019 mgmt 320
1/55
Introduction to OperationsManagement
McGraw-Hill/IrwinCopyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
7/29/2019 mgmt 320
2/55
What is operations?
The part of a business organization that is responsible
for producing goods or services
How can we define operations management?
The management of systems or processes that create
goods and/or provide services
1-2
7/29/2019 mgmt 320
3/55
Goods are physical items that include raw materials, parts,
subassemblies, and final products.
Automobile
Computer
OvenShampoo
Services are activities that provide some combination of time, location,
form or psychological value.Air travel
Education
Haircut
Legal counsel
1-3
7/29/2019 mgmt 320
4/55
Supplierssuppliers
Directsuppliers
Producer Distributor FinalCustomers
Supply Chain a sequence of activities and
organizations involved in producing and delivering a
good or service
1-4
7/29/2019 mgmt 320
5/55
1-5
7/29/2019 mgmt 320
6/55
Operations FinanceMarketing
Organization
1-6
7/29/2019 mgmt 320
7/55
Inputs:
LandLabor
Capital
Information
Outputs:
GoodsServices
Transformation/Conversion
Process
Control
Measurement
and Feedback
Measurement
and Feedback
Measurement
and Feedback
Value-Added
Feedback= measurements taken at various points in the transformation process
Control = The comparison of feedback against previously established standards to
determine if corrective action is needed. 1-7
7/29/2019 mgmt 320
8/55
Automobile Assembly, Steelmaking
Products are typically neither purely service- or purely goods-based.
Goods Services
Home Remodeling, Retail Sales
Computer Repair, Restaurant Meal
Songwriting, Software Development
Surgery, Teaching
1-8
7/29/2019 mgmt 320
9/55
TangibleAct-Oriented
Goods Services
Manufacturing and Service Organizations differ chiefly because
manufacturing is goods-oriented and service is act-oriented.
1-9
7/29/2019 mgmt 320
10/55
1. Degree of customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity6. Production and delivery
7. Quality assurance
8. Amount of inventory9. Evaluation of work
10. Ability to patent design
1-10
7/29/2019 mgmt 320
11/55
1. Jobs in services are often less structured than in manufacturing
2. Customer contact is generally much higher in services
compared to manufacturing
3. In many services, worker skill levels are low compared to those
of manufacturing employees
4.Services are adding many new workers in low-skill, entry-levelpositions
5. Employee turnover is high in services, especially in low-skill
jobs.
6. Input variability tends to be higher in many serviceenvironments than in manufacturing.
7. Service performance can be adversely affected by many factors
outside of the managers control.
(e.g., employee and customer attitudes)1-11
7/29/2019 mgmt 320
12/55
Process: 1 or more actions that transform inputs into outputs
Three Categories of Business Processes:
Upper-management
processes
These govern the operation of the
entire organization.
Operational processes These are core processes that
make up the value stream.Supporting processes These support the core processes.
1-12
7/29/2019 mgmt 320
13/55
7/29/2019 mgmt 320
14/55
Supply Demand>
Supply Demand