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MGB210 MANAGING
OPERATIONSWeek 1
Dr Mervyn J Morris
Unit coordinator
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I acknowledge the Traditional Owners ofthe lands where QUT now stands, pay
respect to their Elderspast, present andemergingand acknowledge theimportant role Aboriginal and Torres StraitIslander people continue to play within the
QUT community..
of
www.reconciliation.qut.edu.au
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LECTURE 1 OUTLINE
1. Why study operations management?
2. Links to other units3. Unit outcomes
4. Week One document
5. Assessment
6. Tutorial program
7. Expectations
8. Introduction to managing operations.
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Why study operations management?
1. Examines the processes used in producing theproduct or products of the organisation.
2. Provides an understanding of the basic conceptsrelated to operations e.g.:
3. Is a crucial element of organisational activities
Links to other units:Due to the central nature of operations, all prior units
(and subsequent ones as well) are useful inMGB210.
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UNIT OUTCOMES
1. Explain the key operations management activities, processes,technologies and techniques and how these interact with other
management functions.
2. Solve operations management problems in different operationalsettings and organisations using selected analytical and statistical
tools and techniques.
3. Evaluate operational management decisions, strategies andactivities in terms of consistency with other organisational
strategies and management functions and the expectations of thebroader community.
4. Communicate arguments and conclusions about operationsmanagement problems and issues in a variety of written formats
to a target audience.
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MGB210 Managing Operations
Additional resources:
The LibraryJournals
The Web
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MGB210 Managing Operations
Websites:
www.bnet.com./www.bized.co.uk/
www.12manage.com/
www.wikipedia.com/- only for general information
never to be used as a reference!
http://www.bnet.com./http://www.bized.co.uk/http://www.12manage.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.12manage.com/http://www.bized.co.uk/http://www.bized.co.uk/http://www.bnet.com./8/11/2019 Week 1(BB) Introduction
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MGB210 Managing Operations
Additional material:
Fitzsimmons, James A., and Mona J. Fitzsimmons (2006), Service
management: Operations, strategy, information technology, 5th
ed.,McGraw-Hill, New York.
Metters, Richard, Kathryn King-Metters, Madeleine Pullman, andSteve Walton (2006), Successful service operations management, 2nded., Thompson, Mason.
Reid, R. Dan and Nada R. Sanders (2007), Operations management,3rded., Wiley, USA.
Stevenson, William J., (2002), Operations management, 7thed.,McGraw-Hill, New York.
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MGB210 Managing Operations
Additional material:
Collier, David A., and James R. Evans, (2007)
Operations management: goods, services, andvalue chains, 2nd ed., Thomson: Mason, Ohio.
See the MGB210 Blackboard site (CMD) for copies of:
Collier, David A., and James R. Evans, (2007)chapters & graphics.
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MGB210 Managing Operations
8. Make connections across units
9. Think about the futuredont find yourself sitting for thefinal examination, wishing you had been sitting here formore of the lectures or had attended more tutorials!
10. If you have a laptop, make use of it with the Excel (andother programs); bring it to your tutorial.
11. Try and locate yourself in the situation
12. How the theory being covered can be used in differentcontexts
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What kind of student are you?
Student as customer: Business educators act as resource
providers to students, who then consume these resources.
Student as employee: The educator typically controls the
learning processstudents are passive participants in the
education process. They are managed, not educated.
Student as co-producer: The educator provides the resources
the student needs to learn and the student recognises that
they must contribute to their own learning
The assumption we will be using is:
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MGB210 Managing Operations
Our expectations of you
1. Being responsible for your own learningwe will do all that wecan to facilitate such learning but the ultimate responsibilityshould be yours.
2. Participation in the different activities undertaken during thesemester.
3. Asking questions of us whenever you have doubts about anythingrelated to goods and service management.
4.Contacting us if you are having a problem (or problems)do notwait until it is too late!
http://www.youtube.com/watch?v=oXCuGvsThEwhttp://www.youtube.com/watch?v=oXCuGvsThEwhttp://www.youtube.com/watch?v=xbVw7entkxg&feature=relatedhttp://www.youtube.com/watch?v=xbVw7entkxg&feature=relatedhttp://www.youtube.com/watch?v=oXCuGvsThEwhttp://www.youtube.com/watch?v=oXCuGvsThEw8/11/2019 Week 1(BB) Introduction
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In turn we will:
1 Turn up for class on time and well prepared
2 Welcome questions in class at any time3 Respond to emails/discussion board issues promptly (usuallywithin 48 hoursas circumstances permit)
4 Ensure your assignments are graded promptly (usually within2 weeks)
5 Give you as much assistance and encouragement as we canduring your progress through the unit
6 Challenge you to think in ways which you may finduncomfortable, at least initially.
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Week oneoutcomes
1. Understand the importance of operations managementto the organisation
2. Know the meaning of operations management
3. Appreciate the differences between service operationsand production operations
4. Appreciate the interdependencies between thedifferent functional areas of the organisation
Degree of difficulty of MGB210
Reference: Collier and Evans, 2008, Chapters 1 and 2.
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OperationsManagement
UnderstandingOperations
DesigningOperating Systems
ManagingOperations
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What Operations and Supply Chain
Managers Do
What is Operations Management? design, operation, and improvement of productive systems
What is Operations?
a function or system that transforms inputs into outputs of greatervalue
What is a Transformation Process?
a series of activities along a value chain extending from supplier tocustomer
activities that do not add value are superfluous and should beeliminated
Copyright 2011 John Wiley & Sons, Inc.
What Operations and Supply Chain
Managers Do
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The role of theory in Operations Management (OM).
Theory is used to predict, understand, analysepast, current,
and future actions. Theory has a number of components
General theoryis a general statement about the why, what, how ofa specific course of action.
General theory then consists of a number of sub-theorieswhich
contribute to the general theory
Each week we cover an OM sub-theorythat we need toconsider in terms of general OM Theory.
e.g. How we forecast (Forecasting sub-theory) has implications for:
how we service our customers (Valuegeneral theory); who weorder from (Supply Chain sub-theory), and; how much we order(Inventory Management sub-theory) etc. etc. etc..
http://localhost/var/www/apps/conversion/Week%20One%20document%20S2%202012_tb2.docxhttp://localhost/var/www/apps/conversion/Week%20One%20document%20S2%202012_tb2.docx8/11/2019 Week 1(BB) Introduction
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Understanding Operations hasapplication to all aspects of managingoperations.
Topics:
Goods, services, operations management andvalue chains (including supply chains)
Quality Performance Measurement
Operations strategy, ethics, and corporatesocial responsibility
Etc.
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So how important is OM to the Business?
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Operations management (OM): the design, operation, and improvementof productive systems. (Russell and Taylor, 2011, 2)
Operations management (OM)is the science and art of ensuring thatgoods and services are created and delivered successfully to customers(Collier and Evans, 2007, 5).
The principles of OM help one to view a business enterprise asa total system, in which all activities are coordinated not onlyvertically throughout the organization, but also horizontallyacross multiple functions.
Transformation process
General OM Theory
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Transformation Process
Physical: as in manufacturing operations
Locational: as in transportation or warehouse
operations
Exchange: as in retail operations
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication
Copyright 2011 John Wiley & Sons, Inc.
1-22
O ti T f ti
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Operations as a Transformation
Process
Copyright 2011 John Wiley & Sons, Inc.
1-23
INPUT
Material
Machines
Labor
Management
Capital
TRANSFORMATION
PROCESS
OUTPUT
Goods
Services
Feedback & Requirements
The transformational process creates VALUE
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Independent of the type(s) of processes:
1. Value creationprimary goods and services2. Supportthose activities necessary to support the main
task
3. General Managementthose processes necessary to
support the overall processes
OM needs to focus on creating value for the customer
THE VALUE CHAINthat network of processes thatcreate value for the customer (Collier and Evans, 2007, 18)
Processes and value chains (Collier and Evans, 2007, 17-20): refer MGB210 Blackboard site, CMD
The transformational process creates VALUE
for ?
Th V l Ch i
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The Value Chain
(Collier & Evans 2007)
D th t f ti l t d
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What is the difference between a good and a service?( Hill, Terry. (2005). Chapter 5 : Designing Service Delivery Systemsin Hill, Terry, Operations
management, Hampshire: Palgrave Macmillan, pp.138-174 CMD as well)
A good is a physical product that you can see, touch, or possibly consume(Collier and Evans, 2007, 10)
A service is any primary or complementary activity that does not directlyproduce a physical product (Collier and Evans, 2007, 11)
Does the transformation process apply to goods
&/or services?
Independent of how a product is classified:
customers/consumers buy the product or service for a reason
VALUE
(can be defined by the Customer Benefi t Package)
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VALUEis the (customers) perception of benefits associated with agood, service, or bundle of goods and services (that is, thecustomer benefit package) in relation to what buyers are willingto pay for them(Collier and Evans, 2007, 41).
So how does OM create VALUEfor the customer?
Creating VALUE for the Customer
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Creating VALUEfor the Customer
(Collier & Evans 2007; Exhibit 6.1)
Creating VALUE for the Customer
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Creating VALUEfor the Customer
(Collier & Evans 2007; Exhibit 6.1)
Creating VALUE for the Customer Steps 1 & 2
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Creating VALUEfor the Customer Steps 1 & 2.
Strategic Planning
Missionand Vision
CorporateStrategy
OperationsStrategy
MarketingStrategy
FinancialStrategy
Copyright 2011 John Wiley & Sons, Inc.
The Strategy Clock (Bowman): Competitive Strategy
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The Strategy Clock (Bowman): Competitive StrategyOptions
PriceLow
High
Perceived
use
VALUE
(Quality)
Low High
Strategies
destined for
ultimate failure
6
8
No frills1
Focused
differentiation5
Differentiation
4
Hybrid3
Low
price2
MajorCompetitor
Bowman, C. and Faulkner, D. (1997), Competitive and Corporate Strategy, Irwin, London
Creating VALUE for the Customer Step 3
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Creating VALUEfor the Customer Step 3.
Hamburger
Onions
Pickles
Two allbeef
pattiesLettuce
Cheese
Customer Benefit Package Design (CBP)
Sesameseed bun
Creating VALUE for the Customer Step 4a
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Creating VALUEfor the Customer Step 4a
Detailed Product DesignProduct Design for The Hamburger
Ingredients (bill of materials):
1. All beef patties x 2
2. Lettuce x 50g
3. Cheese x 100g
4. Pickles x 2
5. Onions x 1 slice6. Sesame seed bun
7. Sauce x 5ml
8. Hamburger packaging wrapper
9. Oil for the griddle 10ml
10. Griddle (heat 220C)11. Cooking utensils
12. Labour to cook, prepare & package (3 minutes/burger)
Creating VALUE for the Customer Step 4b
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Creating VALUEfor the Customer Step 4b
(Collier & Evans 2007; Exhibit 7.9
Detailed Process Design
Creating VALUE for the Customer Steps 5 & 6
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Creating VALUEfor the Customer Steps 5 & 6.
Market introduction, deployment &Evaluation
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Beatton, T. (2009) MGB210 Semester 2 tutorial program
37
CorporateStrategy
OperationsStrategy
CBP
Management
defines
CBPCustomer
Wants
&
Needs
MeasureValue
CBP
CBP
Deliv
ered
Update OM Strategy?
Refine
UpdateRedesign
OM
Processes
Tute#1: Customer Benefit Package
Tute #2: Quality
Tute #3: Performance Measurement
Tute #4: Product Design
Tute #5: Service Design
Tute #6: Processes & Technology
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In the lecture we covered:
1. Why study operations management?
2. Links to other units3. Unit outcomes
4. Week One document
5. Assessment
6. Tutorial program
7. Expectations.8.Introduction to Operations Management
9. General OM Theory;
10. Transformational process;
11. Value Chain, and;
12. Exampled how OM can create value for the customer.