OPERATIONS MANAGEMENT

Presented by: Michelle F. Go

TYPICAL ORGANIZATION CHART

MAMAMIA’S PIZZA•Small family-oriented restaurant•Seating capacity for about 30 customers•Provides delivery within a limited local area

3 Management Concerns:1. Acquiring the capital to start and continue to run the business-

the finance function

2. Attracting customers, selling, and distributing the products – the manufacturing function

3. Making products and delivering services – the production or operation management

What is operations management?Association for Operations Management (APICS)

“the field of study that focuses on the effective planning, scheduling, use and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions as they affect the organization” (APICS Dictionary, 11th edition).

OTHER DEFINITION

• A field that is responsible for managing the production and delivery function of an organization’s products and services.

• "... the systematic direction and control of the processes that transform inputs into finished goods and services. The inputs are transformed at operations into outputs." 

Operations management is:• A management function

• An organization’s core function

• In every organization whether Service or Manufacturing , Profit or Not for profit

What is the role of operations management(OM)?

OM transforms inputs to outputs

Inputs – are resources such as •people , Material , and Money

Outputs – are goods and services

Purpose of OM- Deliver ever- improving value for customers through continuous improvement of overall company and capabilities

Historical Development of OMIndustrial revolution Late 1700sScientific management Early 1900s

Hawthorne Effect 1930sHuman relations movement 1930s-Management science 1940s-Computer age 1960s-Environmental Issues 1970s-JIT & TQM* 1980s-Reengineering 1990-Global competition 1980-Flexibility 1990-Time-Based Competition 1990-Supply chain Management 1990-Electronic Commerce 2000-Outsourcing & flattening of world 2000-

*

Role of operations managerOperations managers' responsibilities include:

•Human resource management 

•Asset management 

•Cost management 

OM DECISIONSSTRATEGIC PLANNING AND

DECISIONS

•Very broad•Long-term (3-5 yrs. , high degree of uncertainty and risk)•Responsibilities of top managers

Examples includes:1.organization’s mission, vision and purpose2.Choosing product lines3.Distribution and marketing channels4.Designing the performance and compensation system

TACTICAL PLANNING AND DECISIONS

• narrow in scope•Medium-term ( moderate degree of uncertainty and risk)•Middle managers

Examples includes:1.Acquiring resources needed to produce products ( resource needs)2. Designing production facilities3. Determining work force and production levels4. Implementing humans resource policies5. Improving quality

• Short-term (very little uncertainty and risk) • Supervisors, factory workers, front-line service workers

Example includes:1. Adjusting daily production2. Managing materials and work in process3. Controlling product quality4. Managing customers relations

OPERATIONAL PLANNING AND DECISIONS

Goods & ServicesManufacturing

• Tangible product• Product can be

inventoried• Low customer contact• Longer response time• Capital intensive

Services• Intangible product• Product cannot be

inventoried• High customer contact• Short response time• Labor intensive

Characteristic Manufacturing ServiceOutput Tangible Intangible

Customer contact Low High

Uniformity of output High Low

Labor content Low High

Uniformity of input High Low

Measurement of productivity Easy Difficult

Opportunity to correct quality problems Easy Difficult

MANUFACTORING VS. SERVICE ORGANIZATION

THE GENERAL MODEL OF

OPERATIONS MANAGEMENT

OM’s Transformation Process

Inputs Transformation OutputsEnergy, Raw vegetables Cleaning Clean vegetables

Energy, Metal sheets Cutting/Rolling/Welding Cans

Energy, Vegetables Cutting/Chopping Cut vegetables

Energy, Water, Vegetables Cooking Boiled vegetables

Energy, Cans, Boiled vegetables Placing Can food

EXAMPLES

Doctors, nurses Examination Healthy patientsHospital Surgery

Medical Supplies MonitoringEquipment MedicationLaboratories Therapy

Inputs Processes Outputs

Operations in services: Health care

OM’s Transformation RoleTo add value

Increase product value at each stage

Value added is the net increase between output product value and

input material value

Provide an efficient transformation

Efficiency – means performing activities well for least possible cost

Inputs

transformed resources – those that are transformed in some way by the operation to produce the goods or services that are its outputs

materials – the physical inputs to the processinformation that is being processed or used in the processcustomers – the people who are transformed in some way.

transforming resources – those that are used to perform the transformation process.staff – the people involved directly in the transformation process or

supporting itfacilities – land, buildings, machines and equipment.

transformation process - is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients.

Highlights

Thank you !!!