What is “Operations Management”? (and why should you care?) Dr. Ron Lembke, Ph.D. University of Nevada, Reno

Reaching me Email: ronlembke@unr.edu Phone: (775) 682-9164 WWW: http://business.unr.edu/faculty/ronlembke Don’t call my house, and I won’t call yours. When emailing, please include “352” in the subject line. Or send a message via WebCampus

Who Are You? (This is Homework) In WebCampus, please tell me the following: Your name Where From Major Interests / Hobbies Work experience

The Goal What is the goal of a company?

Efficent & Effective Efficiency: Effectiveness: Doing things with the least use of resources Effectiveness: Doing the right thing at the right time. Satisfying the customer Which is more important? Value = Quality / $

What is Operations Management? Managing the systems or processes that create goods and/or provide services (p.4)

Goods vs. Services Car? iPad? Coffee at Starbucks Oil Change iPhone? Tangible – solid, can be touched Storable Degree of customer input and specification

Why OM is the most important area Marketing gets people to buy our product Finance makes sure we have the money to operate Accounting keeps track of what we spend Management keeps people on task I/S makes sure systems work to support everyone else Operations actually makes the thing we sell. Without operations, you can’t have a company.

Why Do You Care? Satisfying Customers depends on Operations You must understand and work in or with Operations: Finance: Depr, Cash Flow, Make vs. Buy Acctg: Cost estimates, Overhead, Inv valuation Mktg: What can be done? HR: job descr, standards, incentives MIS: production, shipping, billing, receiving

Operations as Service Everybody’s in service Core services: done correctly, customized to their needs, delivered on time, priced competitively Value-added services: make life easier, help do jobs easier: Information on product – data, specs Problem solving – help internal, external customer Sales support – demo product trying to sell Field support – replace parts quickly

Bill of Materials 1605 Snow Shovel 048 Scoop-shaft connector 13122 Top Handle Assy 118 Shaft (wood) 14127 Rivet (4) 314 scoop assembly 082 Nail (4) Firm buys inputs from suppliers, produces some parts in-house BoM lists all inputs

Supply Chains

Current OM Issues Flexible supply chains for mass customization of products and services Global supplier, production, and distribution networks Commoditization of suppliers – “plug compatibility” Enhancing value-added services Maximizing use of internet to share information, coordinate production

Operational Decision-making Org. goals > 1 year Prod design, capacity, location Tactical: <1 year, optimal Inventory, lines Right people, right place Reactive

Book Organization Essentials: 1. What is OM? 2. Operations strategy 3. Choosing and improving products and services 4. What is going to happen in the future? Planning Operations 5. Capacity Planning and Waiting 6. Process and facility selection 7. Project Management 8. Location Planning and Logistics 16. Optimization TEST 1 Managing Operations 9. SCM – materials from suppliers 10. Inventory – how much? 11. Planning production 12. Lean Action and Adaption 13. Quality control 14. Scheduling TEST 3 TEST 2

Continuous Process Improvement “Ascending and Descending,” M.C. Escher, 1960

Nokia November, 2007 Hmm, I wonder? June 29, 2007

Does anyone remember Nokia?

Or Blackberry?

Smartphone sales by OS With 17.2% of units sold, Apple had 91% of the profits

Continuous Improvement IGNORE YOUR TEETH, AND THEY’LL GO AWAY It used to be you had to be “good enough” Now, you must be looking for ways to make your customer happy, and meet their future needs If you aren’t someone else is, and is going to take your business