5. The management of systems or processes that
create goods and/or provide services.
Planning
Coordinating
Executing
6. OVERVIEW OF
OPERATIONS MANAGEMENT MODEL
Input
resources
raw materials
machines
personnel
capital
land/buildings
utilities
information
etc.
Transformation
Process
Control
Output
Goods or Services
7.
8. The difference between the cost of inputs and the value or price of outputs
.
Value added
Inputs
Material
Labor
Land
Capital
Transformation/
Conversion
process
Outputs
Goods
Services
9. Feedback and Control
Physical Flow
Information Flow
Measurements taken at various points in the
transformation process for control purposes are called
feedback.
The process of comparing outputs to previously
established standards to determine if corrective action
is needed is called controlling
10.
Operations management considers how the
input are transformed into goods or
services.
Control is when something is learned about
the goods or services that is used to more
effectively transform future goods or
services.
23. Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
24.
Forecasting: Weather, landing conditions, seat demands
for flights.
Capacity Planning: How many number of planes in each
route?
Scheduling: Scheduling of planes for flights and for routine
maintenance, scheduling of pilots and flights attendants.
Quality: Quality of the services, Safety.
25.
Forecasting: Demands for cars.
Capacity Planning : Number of shifts, level of workforce.
Inventory: Various component, parts.
Scheduling: Scheduling of various types of cars, Scheduling of
workforce.
Quality: Quality of products, services.
26. Responsibilities of Operations Manager
Planning
– Capacity
– Location
– Products & services
– Make or buy
– Layout
– Projects
– Scheduling
Controlling / Improving
– Inventory
– Quality
– Costs
– Productivity
Organizing
– Degree of centralization
– Process selection
Staffing
– Hiring/laying off
– Use of Overtime
Directing
– Incentive plans
– Issuance of work orders
– Job assignments
31. The Overlapping of Three Major Functions
• Competitor
• Customer preference
• Trend of technology
32. Operational based competitive advantage can be achieved
by:
*Doing things right the first time - Quality advantage;
*Doing things cost effectively - Cost advantage;
*Do things fast: Speed advantage;
33. *Change things quickly: Adaptability-advantage;
(ability to change from making Tea, Coffee, etc)
- Change operations to meet customer demand for variety.
- SME Furniture manufacturer (beds, chairs, tables, sofa).
*Do things right every time: Reliability-advantage;
- Offer error-free products or services to customers every time.
*Do things better: Service-advantage and continuous improvement;
(e.g., TQM – all aspects of business important in delivering
quality service to customer).
37.
Job shop
Small scale
Batch
Moderate volume
Repetitive/assembly line
High volumes of standardized goods or services
Continuous
Very high volumes of non-discrete goods
38. Process Type
Amount
∞
0
Job Shop
Appliance repair
Not feasible
Emergency room
Commercial
bakery
Batch
Classroom
Lecture
Automotive
assembly
Repetitive
Automatic
carwash
Continuous
(flow)
Not feasible
Oil refinery
Water purification
40. PROCESS FLOW
UNIT/JOB SHOP
One of a Kind, Custom Tools, Buildings, Software, Research Projects,
Exclusive Restaurants
BATCH
Furniture, Clothes, Most Plastic Parts, Many Photo Shops
MASS
Autos, BIC pens, Consumer Electronics, One-Hour Photos, Fast Food
Restaurants
CONTINUOUS PROCESS
Chemicals, Primary Materials, Petroleum, Lumber
43. Flexibility/Variety is Higher
Costs are Higher
OK with low volume markets
OK when high customization is necessary
Threats:
A competitor can undercut you
Risky when high volume can be stimulated through
price competition
44. Costs are lower
Automation is higher
Greater investment
Threats:
Greater market risk – what do you do with an
automated highly specialized plant when demand
decreases?
Competition may match costs with greater product
variety.
45. Types of Service Operations
Service
Labor Intensive
Capital Intensive
Automatic
Monitored by
Unskilled
Operators
Operated
by Skilled
Operators
Vending
machines,
automated
car washes
Movie
theaters,
taxis, dry
cleaners
Airlines,
medical
testing,
excavating
Unskilled
Labor
Skilled
Labor
Professionals
Lawn care,
janitorial,
guards
Appliance
repair,
banks,
catering
Doctors,
lawyers,
consultants
46.
Defining Services - Types of Processes
Type
Mfg. Example
Project
Construction,
Consulting,
Shipbuilding
Software Development
Sign-making
Auto Repair
Tailoring
Restaurant
Automobiles
Fast Food Restaurant
Appliance Shop
Car Wash
Job Shop
Flow Shop
Continuous Process Oil Refinery
Cereal Plant
Service Example
ATMs
Police / Fire Service
49. Idea generation
Feasibility study/
Advanced product
planning
Advanced design
Detailed engineering
design
Production process
design & development
Product evaluation
Product improvement
Product use & support /
After sales services