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Understanding Operations Management: Concepts and Applications

This overview introduces operations management (OM) as the design, operation, and improvement of systems that create and deliver products and services. Explore the distinctions between efficiency and effectiveness, and understand core operations decisions across various sectors, including manufacturing and services. The session also touches on the importance of quality, pricing, and value-added services in building customer relationships. Using case studies, such as those from McDonald’s, we analyze operational strategies, technology, and quality assurance to enhance business performance.

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Understanding Operations Management: Concepts and Applications

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  1. Operations Management Moutaz Khouja Business Information Systems and Operations Management Department The Belk College of Business Administration The University of North Carolina at Charlotte Charlotte, NC 28223 Ph: (704) 687-3242, Fax: (704) 687-6330 mjkhouja@uncc.edu http://www.belkcollege.uncc.edu/mjkhouja/

  2. Outline • Introductions • Name cards • Brief bios • Suggested info (optional) • University history • Job history • Family and/or friends • Hobbies

  3. Brief bio • BSME, MBA, PhD Operations Management • Married to Lisa Smith for 18 years, three cats. • Teaching • Operations Management, MBA, Undergraduate (UG) • Quantitative Analysis and Business Statistics, MBA • Service Operations Management, UG • Production Planning and Control, UG • Research and Consulting • Inventory Management • Supply Chain Management • Pricing • Applications of Artificial Intelligence to Operations Management • Cooking, reading • Very happy to be in Taipei. • Intro to Operations Management - Chap 1

  4. What is operations management? • Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services. • OM is management of processes that produce and distribute products and/or services to customers. • OM objective is make sure that the processes work effectively and efficiently. • What is the difference between effectiveness and efficiency? • Efficiency: producing something at the lowest possible cost • Effectiveness: doing the right things to create the most value for the firm • What is value? • quality divided by price

  5. Strategic level Broad scope, long term Tactical level Moderate scope, medium term Operational level Narrow scope, short term Typical Operations Decisions and Their Hierarchy

  6. Transformations • Physical--manufacturing • Locational--transportation • Exchange--retailing • Storage--warehousing • Physiological--health care • Informational--telecommunications

  7. Transformation Processes • Inputs Use resources  Outputs

  8. What is a Service and What is a Good? • Classic view: • Physical output (tangible) of process  Good • If you drop it on your foot, it may hurt you • Intangible process  Service • If you drop it on your foot, it won’t hurt you • McDonald’s is in Service or Manufacturing sector? • Every organization is in the service business, T or F?

  9. OM in the Organization Chart

  10. Quality Performance Objectives Operations Management Speed Flexibility Price (or cost Reduction) Core Services • Core services are the basic things that customers (internal or external) want from products they purchase (quality, on time delivery, price (cost), etc.) • Somewhat easier to emulate or copy

  11. Problem Solving Operations Management Sales Support Information Value-Added Service Categories Field Support Value Added Services • Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way (sales and field support, problem solving, etc.) • Significantly more difficult to copy and implement

  12. Case: Fast-Food Feast, p. 21 • Please read this very short case and visit McDonald’s and one more fast-food restaurant. • You do not have to eat there but make sure to observe as much as possible how they prepare their meals using the seven questions listed on page 21. • Also, please read the article “McDonald's focus flips back to fast” • Discuss case

  13. Case Questions • What do these different fast food restaurants sell? • Does each of them sell something different? • What is different about the operations of these restaurants? • Processes, Technology, Service Speed, Capacity, Flexibility • How do these stores make hamburgers? • Did you notice any differences? • What are sources of variability that these stores must deal with? • How do these businesses ensure quality?

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