Operations Management

Department of Managerial

SciencesGeorgia State

University

Operations Management….WHAT?The design and operation of

processes & systems aimed at providing competitive goods and services to the marketplace…

Transformation process of converting inputs… materials, labor, and capital into outputs… goods and services…

Series of activities along a value chain extending from supplier to customer…

Responsible for the core competencies that a company derives its competitive advantage…

Operations Management: The Transformation Process

Physical…manufacturing operationsLocational…logistics and warehousing operationsExchange…retail operationsPhysiological…health carePsychological…entertainmentInformational…communications

The Operations Function….

Operations

Finance/Accounting

Human Resources

MarketingSu

pplie

rs

Production andInventory data

Capital budgeting requestsCapacity expansion and

Technology plans

BudgetsCost analysisCapital investmentsStockholder requirementsOrders for materials

Production and deliverySchedules Quality

Requirements Design/Performance specs

Material availabilityQuality data

Delivery schedulesDesigns

Product/ServiceAvailability

Lead-time estimatesStatus of order

Delivery schedules

Sales forecastsCustomer orders

Customer feedbackPromotionsPersonnel needs

Skill setsPerformance evaluations

Job design/workmeasurement

Hiring/firingTrainingLegal requirementsUnion contract negotiations

Organizational Learning And Operational Effectiveness…

Strive to be different….your market value depends on it. How, you ask!

By performing similar activities better than your rivals perform them. Responsibility: Operations Management

Operations Management Drives…

New set of performance objectives to ensure we’re performing our activities/processes better…than the competition…

Flexibility Speed DependabilityQualityCost

Operational Effectiveness…

Flexibility: Product & service flexibility Mix flexibility Volume flexibility Delivery flexibility

Operational Effectiveness…

Speed: New product launch Faster throughput times Less queuing and/or inventory Less overheads

Operational Effectiveness…

Dependability: How reliable are we when we make a

commitment to our best customers? Delivery performance Paper work accuracy Inventory management Ease of doing business Ability to react to a change

Operational Effectiveness…

Quality: Design quality: processes Conformance quality: product More internal reliability Lower processing costs Less waste and rework

Operational Effectiveness…

Cost: Productivity; outputs vs. inputs Productive processes Average Unit Cost Higher profits

Operational Effectiveness…

Enterprise Integration/ Supply Chain Management

Product Design & Development Material & Resource Planning Total Quality Management Facility Location & Layout Inventory Management Project Management Forecasting Models Capacity Decisions Process Selection Just-In-Time Scheduling

Operations Management Tools:

Organizational Profiles: Environment, Relationships, and ChallengesBaldrige Criteria for Performance Excellence

1Leadership

2Strate

gicPlanni

ng

3Customer &

Market Focus

5Human Resour

cesFocus

6Process

Management

4Information & Analysis

7Busines

sResults