Operations Management by William j Stevenson (2)

7/25/2019 Operations Management by William j Stevenson (2)

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McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson

Copyright © 2002 by The M!ra"#$ill Companies, %n. &ll rights reserved.

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Chapter One

Introductionto

OperationsManagement



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• What is Operations?

The part of a business organization

that is responsible for producinggoods or services



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Operations Management

Organization

Finance Operations Marketing

The management of systems or processes thatcreate goods and/or provide services

Introduction to Operations Management



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Supply Chain

Suppliers’

suppliers

Direct

suppliersProducer Distributor

Final

Customers

Supply Chain – a sequence of actiities and

or!ani"ations inoled in producin! and delierin! a

!ood or serice



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• The scope of Operations Management

includes ! Forecasting

! Capacit" planning

! #cheduling ! Managing inventories

! $ssuring %ualit"

! Motivating emplo"ees ! &eciding 'here to locate facilities

! $nd more ( ( (



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Why Manufacturing Matters

•Over )* million 'orkers in manufacturing +obs• $ccounts for over ,-. of value of /(#( e0ports

• $verage full1time compensation about 2-.

higher than average for all 'orkers•Manufacturing 'orkers more likel" to havebenefits

•3roductivit" gro'th in manufacturing in the last 4"ears is more than double that of the /(#(econom"





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Why Study OM?

• 5ver" aspect of business revolves around operations• Man" service +obs are closel" related to operations

! Financial services

! Marketing services

! $ccounting services

! Information services

• There is a significant amount of interaction andcollaboration amongst the functional areas

• It provides an e0cellent vehicle for understanding the'orld in 'hich 'e live





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Career Opportunities in OM

• Operations manager • 3roduction anal"st

• 3roduction manager

• Industrial engineer • Time stud" anal"st

• Inventor" manager

• 6ualit" anal"st• 6ualit" manager





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7usiness Operations Overlap

Marketing

Operations

Finance






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Goods are p()sical items t(at include ra* materials+ parts+

subassemblies+ and final products,.utomobileComputer /en

S(ampoo

Services are actiities t(at proide some combination of

time+ location+ form or ps)c(olo!ical alue,.ir trael

0ducationaircute!al counsel

Good or Service?





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Steel production

Automobile fabrication

House building

Road construction

Dressmaking

Farming

Auto Repair

Appliance repair

Maid Service

Manual car wash

Teaching

Lawn mowing

Low service content

High goods content

High service content

Low goods content

ncreasinggoods contentncreasing

service content

8oods1service continuum






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#tage of 3roduction 9alue $dded

9alue of3roduct

Farmer produces and harvests 'heat :-()4 :-()4

Wheat transported to mill :-(-* :-(2;

Mill produces flour :-()4 :-(;*

Flour transported to baker :-(-* :-(<=

7aker produces bread :-(4< :)(--

7read transported to grocer" store :-(-* :)(-*

8rocer" store displa"s and sells bread :-(2) :)(2>

Total 9alue1$dded $1.29






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T"pes of Operations

Operations 50amples8oods 3roducing Farming mining construction

manufacturing po'er generation#torage@Transportation Warehousing trucking mail

service moving ta0is buseshotels airlines

50change Aetailing 'holesaling bankingrenting leasing librar" loans

5ntertainment Films radio and televisionconcerts recording

Communication Be'spapers radio and televisionne'scasts telephone satellites






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9alue1$dded

The difference bet'een the cost of inputsand the value or price of outputs(

Inputs Land

Laor

Capital

!rans"or#ation/

Conversion

process

Outputs Goods

Services

Control

Feedack

Feedack Feedack

Value added


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Food 3rocessor

Inputs 3rocessing Outputs

Aa' 9egetables Cleaning CannedvegetablesMetal #heets Making cans

Water Cutting5nerg" Cookingabor 3acking7uilding abeling

5%uipment


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Dospital 3rocess

Inputs 3rocessing Outputs

&octors nurses 50amination Dealth"patientsDospital #urger"

Medical #upplies Monitoring5%uipment Medicationaboratories Therap"


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Operations Interfaces

Public elations

.ccountin!

ndustrial0n!ineerin!

/perations

aintenance

PersonnelPurc(asin!

Distribution

S


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Decision Making

• Most operations decisions involve man" alternatives thatcan have %uite different impacts on costs or profits

• T"pical operations decisions include

! What: What resources are needed and in 'hat amounts?

! When: When 'ill each resource be needed? When should the

'ork be scheduled? When should materials and other supplies be

ordered?

! Where: Where 'ill the 'ork be done?

! How: Do' 'ill he product or service be designed? Do' 'ill the

'ork be done? Do' 'ill resources be allocated?

! Who: Who 'ill do the 'ork?

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The Operations Function consists of all activitiesdirectly related to producing goods or providing services(

$ primar" function of the operations manager is to guide

the s"stem b" decision making( ! #"stem &esign &ecisions

! #"stem Operation &ecisions

Role of the Operations Manager



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&ecision Making

#"stem operation – personnel – inventor" – scheduling

– pro+ectmanagement

– %ualit" assurance





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Models

$ model is an abstraction of realit"(

– 3h"sical

– #chematic

– Mathematical

$hat are the pros and cons o" #odels%

!radeo""s





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6uantitative $pproaches

inear programming 6ueuing Techni%ues

Inventor" models

3ro+ect models #tatistical models





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Manufacturing or #ervice?

!angile &ct


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Ee" &ifferences

Customer contact /niformit" of input

abor content

/niformit" of output Measurement of productivit"

6ualit" assurance

These differences are beginning to fadein many cases


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Manufacturing vs #ervice

CharacteristicOutput

Customer contact

/niformit" of input

abor content

/niformit" of output

Measurement of productivit"

Opportunit" to correct

ManufacturingTangible

o'

Digh

o'

Digh

5as"

Digh

#erviceIntangible

Digh

o'

Digh

o'

&ifficult

o'

%ualit" problemsDigh


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Aesponsibilities of Operations Management

3roducts services

3lanning – Capacit" – ocation –

– Make or bu" – a"out – 3ro+ects – #chedulingControlling

– Inventor" – 6ualit"

Organizing – &egree of centralization – #ubcontracting#taffing – Diring@la"ing off – /se of Overtime&irecting – Incentive plans – Issuance of 'ork orders – Gob assignments


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#"stems $pproach

“The whole is greater thanthe sum of the parts.”

Suopti#i'ationSuopti#i'ation


•6eneficial in decision ma7in!

•Consider t(e impact on all parts of t(e s)stem

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Historical Evolution of OM

• Industrial Aevolution• #cientific Management

• Duman Aelations Movement

• &ecision Models and Management #cience

• Influence of Gapanese Manufacturers

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ey !rends and Issues in "usiness

• 517usiness 51Commerce• Management of Technolog"

• 8lobalization

• Management of #uppl" Chains

• Outsourcing

• $gilit"

• 5thical 7ehavior

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Operations Management by William j Stevenson (2)