1-1Introduction to Operations Management William J. Stevenson Operations Management Muhammad Ali

1-2Introduction to Operations Management CHAPTER 1 Introduction to Operations Management

1-3Introduction to Operations Management Operations Management The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing

1-4Introduction to Operations Management Value-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 Value added

1-5Introduction to Operations Management InputsProcessing Outputs Raw VegetablesCleaning Canned vegetables Metal SheetsMaking cans WaterCutting EnergyCooking LaborPacking BuildingLabeling Equipment Food Processor Manufacturing Vs. Service

1-6Introduction to Operations Management Hospital Process InputsProcessingOutputs Doctors, nursesExaminationHealthy patients HospitalSurgery Medical SuppliesMonitoring EquipmentMedication LaboratoriesTherapy Manufacturing Vs. Service

1-7Introduction to Operations Management Key Differences CharacteristicManufacturingService Output 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 Low quality problems High

1-8Introduction to Operations Management Manufacturing Vs Service

1-9Introduction to Operations Management  Operations Management includes:  Forecasting  Capacity planning  Scheduling  Managing inventories  Assuring quality  Motivating employees  Deciding where to locate facilities  And more... Scope of Operations Management

1-10Introduction to Operations Management Responsibilities 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

1-11Introduction to Operations Management Key Decisions of Operations Managers  What What resources/what amounts  When Needed/scheduled/ordered  Where Work to be done  Who To do the work  How Design  How Much Production

1-12Introduction to Operations Management Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment

1-13Introduction to Operations Management Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance

1-14Introduction to Operations Management Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal

1-15Introduction to Operations Management Historical Evolution of Operations Management  Industrial revolution (1770’s)  Scientific management (1911)  Mass production  Interchangeable parts  Division of labor  Human relations movement ( )  Decision models (1915, ’s)  Influence of Japanese manufacturers

1-16Introduction to Operations Management Trends in Business  Major trends  The Internet, e-commerce  Management technology  Globalization  Management of supply chains  Agility