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OPERATIONS MANAGEMENT. Honghui (Henry) Deng. Ph.D of BA, Red McCombs School of Business, The University of Texas at Austin Assistant Professor, Business School, The University of Nevada, Las Vegas. Educational Background. - PowerPoint PPT Presentation
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Honghui (Henry) DengHonghui (Henry) Deng
Ph.D of BA, Red McCombs School of Business, The University of Texas at Austin
Assistant Professor, Business School, The University of Nevada, Las Vegas
OPERATIONS OPERATIONS MANAGEMENTMANAGEMENT
Educational BackgroundEducational Background
Ph.D., Red McCombs School of Business, University of Texas at Austin, 2002
--MSIS, OR/OM, Finance--Co-Supervised by Dr.s William W. Cooper & Patrick Brockett
Visiting Scholar, Red McCombs School of Business, UT-Austin, 1997-1999
--Marketing Department
BBA, College of Business Administration, Chongqing University, China, 1994
--Marketing & Finance
B.E, Chongqing University, 1990--Electronic and Computer Engineering
Working ExperienceWorking Experience
Academic Experience:Assistant Professor, School of Business, the University of Nevada, Las Vegas
Research Associate, Center of Risk Management & Insurance, School of Business, University of Texas at Austin
Instructor, MSSTC Program, The Innovation Creativity Capital Institute (IC2), Visiting Professor, Marketing Dept., School of Business, UT Austin
Project Official, The Ministry of Education of China, Beijing, China
Lecturer, College of Electronic Information Engineering, Chongqing University, China
Industrial Experience:Strategy Consultant , Rapp Collins Inc. of Omnicom Group Ass. of Director & Consultant , IC2 and Texas Tech. Incubator
Co-Founder & CEO, HHD Consulting LLC.
Membership:The Institute of Operations Research and the Management Sciences (INFORMS)Association of Risk Management & InsuranceAssociation for Information Systems (AIS)
Current ResearchCurrent Research
– Operations Research/Management – IT Strategy & Organization– Knowledge Management– Management Science– Risk Management and Insurance– Decision Science– Data Communication & Networks
Teaching ExperienceTeaching Experience
* Supply Chain Management & Operation Strategy * Management Information Systems* Commercialization Strategy * Risk Management* Statistics I* Applied Information Technology* Data Communications & Networks
Operation Research/Management landscape Introduction of Operations Management Overview of syllabus and course objectives Student information sheet Introduction of Forecasting Group Assignment
Today’s ScheduleToday’s Schedule
Historical Evolution of Historical Evolution of Operations ManagementOperations Management
Industrial revolution (1770’s) Scientific management (1911)
Mass production Interchangeable parts Division of labor
Human relations movement (1920-60) Decision models (1915, 1960-70’s) Influence of Japanese manufacturers
Supply
Sources:plantsvendorsports
RegionalWarehouses:stocking points
Field Warehouses:stockingpoints
Customers,demandcenterssinks
Production/purchase costs
Inventory &warehousing costs
Transportation costs Inventory &
warehousing costs
Transportation costs
Typical Supply Chain for a ManufacturerTypical Supply Chain for a Manufacturer
Supplier
Supplier
Supplier
Storage}
Mfg. Storage Dist. Retailer Customer
Supplier
Supplier
} Storage Service Customer
Typical Supply Chain for a ServiceTypical Supply Chain for a Service
In the first half of the twentieth In the first half of the twentieth century industry replaced agriculture, century industry replaced agriculture,
in the second half of the twentieth in the second half of the twentieth century –“service” has replaced century –“service” has replaced
“manufacturing” -and right now, the “manufacturing” -and right now, the knowledge industry is beginning to knowledge industry is beginning to
replace the others. replace the others.
−−−−George KotzmetzkGeorge Kotzmetzk
1-13
George KotzmetzkGeorge Kotzmetzk
What is Knowledge?What is Knowledge? A collection of data is not information.
A collection of information is not knowledge.
A collection of knowledge is not wisdom.
A collection of wisdom is not truth.
1-15
CHAPTER1
Introduction to Operations Management
1-16
Operations ManagementOperations Management
The management of systems or processes that create goods and/or provide services
Organization
Finance Operations Marketing
Figure 1.1
1-17
Value-AddedValue-Added
The difference between the cost of inputs and the value or price of outputs.
Inputs Land Labor Capital
Transformation/Conversion
process
Outputs Goods Services
Control
Feedback
FeedbackFeedback
Value added
Figure 1.2
1-18
Steel productionAutomobile fabrication
Home remodelingRetail sales
Auto RepairAppliance repair
Maid ServiceManual car wash
TeachingLawn mowing
High percentage goodsLow percentage service
Goods-service ContinuumGoods-service Continuum
Low percentage goodsHigh percentage service
Figure 1.3
1-19
Food ProcessorFood Processor
Inputs Processing Outputs
Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans
Water CuttingEnergy CookingLabor PackingBuilding LabelingEquipment
Table 1.2
1-20
Hospital ProcessHospital Process
Inputs Processing Outputs
Doctors, nurses Examination Healthy patientsHospital Surgery
Medical Supplies MonitoringEquipment MedicationLaboratories Therapy
Table 1.2
1-21
Manufacturing or Service?Manufacturing or Service?
Tangible Act
1-22
Production of Goods vs. Delivery of ServicesProduction of Goods vs. Delivery of Services
Production of goods – tangible output Delivery of services – an act Service job categories
Government Wholesale/retail Financial services Healthcare Personal services Business services Education
1-23
Key DifferencesKey Differences
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
1-24
Manufacturing vs ServiceManufacturing vs Service
Characteristic Manufacturing ServiceOutput
Customer contact
Uniformity of input
Labor content
Uniformity of output
Measurement of productivity
Opportunity to correct
Tangible
Low
High
Low
High
Easy
High
Intangible
High
Low
High
Low
Difficult
Lowquality problems
High
1-25
Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . . .
Scope of Operations ManagementScope of Operations Management
1-26
The operations function Consists of all activities directly related to
producing goods or providing services
1-27
Types of OperationsTypes of OperationsTable 1.4
Operations ExamplesGoods Producing Farming, mining, construction,
manufacturing, power generationStorage/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 televisionnewscasts, telephone, satellites
1-28
U.S. Manufacturing vs. Service Employment
0
20
40
60
80
100
45 50 55 60 65 70 75 80 85 90 95 00
Year
Perc
ent
Year Mfg. Service45 79 2150 72 2855 72 2860 68 3265 64 3670 64 3675 58 4280 44 4685 43 5790 35 6595 32 6800 30 70
Figure 1.4
1-29
Responsibilities of Operations ManagementResponsibilities of Operations Management
Products & services
Planning– Capacity– Location–– Make or buy– Layout– Projects– Scheduling
Controlling/Improving– Inventory– Quality
Organizing– Degree of centralization– Process selection
Staffing– Hiring/laying off– Use of Overtime
Directing– Incentive plans– Issuance of work orders– Job assignments
– Costs– Productivity
Table 1.6
1-30
Key Decisions of Operations ManagersKey Decisions of Operations Managers
WhatWhat resources/what amounts
WhenNeeded/scheduled/ordered
WhereWork to be done
HowDesigned
WhoTo do the work
1-31
Decision MakingDecision Making
System Design– capacity– location– arrangement of departments– product and service planning– acquisition and placement of
equipment
1-32
Decision MakingDecision Making
System operation– personnel– inventory– scheduling– project
management– quality assurance
1-33
Decision MakingDecision Making
Models Quantitative approaches Analysis of trade-offs Systems approach
1-34
ModelsModels
A model is an abstraction of reality.
– Physical– Schematic– Mathematical
What are the pros and cons of models?
Tradeoffs
1-35
Models Are BeneficialModels Are Beneficial
Easy to use, less expensive Require users to organize Systematic approach to problem solving Increase understanding of the problem Enable “what if” questions Specific objectives Consistent tool Power of mathematics Standardized format
1-36
Quantitative ApproachesQuantitative Approaches
• Linear programming
• Queuing Techniques
• Inventory models
• Project models
• Statistical models
1-37
Systems ApproachSystems Approach
“The whole is greater than the sum of the parts.”
SuboptimizationSuboptimization
1-38
Pareto PhenomenonPareto 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?
1-39
Business Operations OverlapBusiness Operations Overlap
Operations
Finance
Figure 1.5
Marketing
1-40
Operations InterfacesOperations Interfaces
Public Relations
Accounting
IndustrialEngineering
Operations
Maintenance
Personnel
Purchasing
Distribution
MIS
Legal
1-41
Trends in BusinessTrends in Business
Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Agility
1-42
Suppliers’ Suppliers
DirectSuppliers Producer Distributor Final
Consumer
Simple Product Supply ChainSimple Product Supply ChainFigure 1.7
Supply Chain: A sequence of activitiesAnd organizations involved in producingAnd delivering a good or service
1-43
Stage of Production Value Added
Value of Product
Farmer produces and harvests wheat $0.15 $0.15
Wheat transported to mill $0.08 $0.23
Mill produces flour $0.15 $0.38
Flour transported to baker $0.08 $0.46
Baker produces bread $0.54 $1.00
Bread transported to grocery store $0.08 $1.08
Grocery store displays and sells bread $0.21 $1.29
Total Value-Added $1.29
A Supply Chain for BreadA Supply Chain for Bread
1-44
Other Important TrendsOther Important Trends
Ethical behavior Operations strategy Working with fewer resources Cost control and productivity Quality and process improvement Increased regulation and product liability Lean production
1-45 Value/DimensionsValue/Dimensions
VD2
Performance=speed x quality x flexibility
1-46
Value/DefinitionValue/Definition
VD1
Trek bike example