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Chapter 1 - Introduction to Operations Management

Operations Managementby

R. Dan Reid & Nada R. Sanders2nd Edition © Wiley 2005

PowerPoint Presentation by R.B. Clough - UNH

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What is Operations Management?

The business function

responsible for planning,

coordinating, and controlling

the resources needed to produce a

company’s products and services

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Typical Organization Chart

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Business Information Flow

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OM’s Transformation Role

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Productivity

Inputs

OutputsP

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Differences between Manufacturers and Service Operations

Services: Intangible product Service cannot be

inventoried High customer

contact Short response time Labor intensive

Manufacturers:

Tangible product Product can be

inventoried Low customer contact Longer response time Capital intensive

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Service and Manufacturers

All use technology Both have quality, productivity, &

response issues All must forecast demand Each will have capacity, layout, and

location issues All have customers and suppliers All have scheduling and staffing issues

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Trends in OM Service sector

growing to 80% of non-farm jobs- See Figure 1-4

Global operations Demands for higher

quality Huge technology

changes Time based

competition

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OM Decisions

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Operations Management Decisions

Strategic: Product/Service

Design Process Selection Capacity

Planning Facility Location Facility Layout Job Design

Tactical: Quality Control Demand

Forecasting Supply Chain

Management Production Planning Inventory Control Scheduling