Introduction to operations management
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1. Introduction to Operations Management. Slides prepared by Laurel Donaldson Douglas College. Define the term operations management and identify operations management jobs. Identify the three major functional areas of organizations and describe how they interrelate.

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Introduction to Operations Management

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1

Introduction to Operations Management

Slides prepared by

Laurel Donaldson

Douglas College


Define the term operations management and identify operations management jobs.

Identify the three major functional areas of organizations and describe how they interrelate.

Describe the scope of operations management, and differentiate between design and operations decisions.

Compare goods versus services.

Discuss the operations manager’s job.

Describe key aspects of operations mgmt decision making.

Briefly describe the historical evolution of operations mgmt

Identify current trends that affect operations management

LO 1

LO 2

LO 3

LO 4

LO 5

LO 6

LO 7

LO 8


  • What is Operations Management (OM)?

  • Three basic functions within organizations

  • The scope of Operations Management

  • Differentiating goods and services

  • Operations Manager’s job

  • Operations Manager and decision making

  • The historical evolution of Operations Management

  • Major trends


What is Operations Management?

OM is the management of processes or systems that create goods and/or provide services.

  • Companies use OM to improve:

    • efficiency (minimize cost and time) and

    • effectiveness (achieving intended goals)


What is Operations Management?

Detail the following OM activities for each company


Why study Operations Management?

  • A large percentage of a company’s expenses occur in OM area (improvements = more profits)

  • A large number of all jobs are in OM area (purchasing, quality, planning, scheduling, inventory, etc)

  • Activities in all other areas( finance, marketing) are interrelated with OM activities

Opportunity!


Airline Company

Finance/

Marketing

Operations

Accounting

Flight

Ground

Facility

Catering

Operations

Support

Maintenance

Three Basic Functions

  • Operations: create goods and services

  • Finance: provide funds and the economic analysis of investment proposals

  • Marketing: assess customer wants and needs and communicate them to others


Operations

Marketing

Finance

Three Basic Functions

  • Is OM function adding value during the transformations process?

  • Is there any overlapping between the main functions?


Operations function

Value Added

Inputs:

Land

Labour

Capital

Outputs:

Goods

Services

Transformation

Process

Feedback

Control

Feedback

Feedback


What is added value?


Operations

Examples

Goods Producing

Farming, mining, construction

,

manufacturing, power generation

Storage/Transportation

Warehousing, trucking, mail

service, moving, taxis, buses,

hotels, airlines

Exchange

Retailing, wholesaling, banking,

renting, leasing, library, loans

Entertainment

Films, radio and television,

concerts, recording

Communication

Newspapers, radio and television

newscasts, telephone, satellites

Types of Operations


Transformation Process at a Food Processor


Transformation Process at a Hospital


Maintenance

Product Design

MIS

Manufacturing

Engineering

Logistics

Operations

Purchasing

Personnel

Accounting

Operations Interfaces


The Scope of Operations Management


The Scope of Operations Management

Which decision is design type and which is operation type?


Goods vs. Services


Act

Tangible

Goods or Service?

Most systems are a blend of both good & service.

Service sector accounts for > 70% of jobs in Canada.


The Operations Manager’s Job


Level of Job Satisfaction


Operations Managers and Decision Making


Models

A model is an abstraction of reality.


Quantitative Approaches

  • Linear programming

  • Queuing techniques

  • Inventory techniques

  • Project techniques

  • Statistical techniques


Analysis of Trade-Offs

  • Decision on amount of inventory to stock

    • Increased cost of holding inventory

      vs.

    • Level of customer service


Establishing Priorities

  • Pareto Phenomenon

  • A few factors account for a high percentage of the occurrence of some event(s).

  • 80/20 Rule - 80% of problems are caused by 20% of the activities.

How do we identify the vital few?


Ethical Issues


The Historical Evolution of OM


Trends in Business


Supply Chain

  • Supply Chain: A sequence of activities and organizations involved in producing and delivering a good or service


  • Define the term operations management and describe what an operation manager might do.

  • Identify the three major functional areas of organizations and describe how they interrelate.

  • Differentiate between design and operations decisions.

  • Compare goods versus services.

  • Describe key aspects of operations management decision making.

  • Briefly describe the historical evolution of operations management.

  • Identify current trends that affect operations management.


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