Introduction to Operations. WHAT IS OPERATIONS MANAGEMENT? Operations management is the design, operation, and improvement of the production systems that.

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Presentation transcript:

Introduction to Operations

WHAT IS OPERATIONS MANAGEMENT? Operations management is the design, operation, and improvement of the production systems that create a firm’s primary goods and services.

What is a Production System? A production system is defined as a user of resources to transform inputs into some desired outputs.

The Transformation Process --

Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational— computers/telecommunications

SOME OPERATIONS MANAGEMENT DECISIONS -- How much will we sell? How do we measure quality? Which product do we offer? How to produce good / provide service? Where do we locate our facility? Is subcontracting a good idea? How much inventory should we keep?

What is a Service and What is a Good? “If you drop it on your foot, it won’t hurt you.” (Good or service?) “Services never include goods and goods never include services.” (True or false?)

Core services -- Definition Core services are basic things that customers want from products they purchase. Examples??

Value-added services -- Definition Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way Examples??

CHARACTERISTICS OF GOODS & SERVICES GOODS Tangible product Consistent product definition Production usually separate from consumption Can be inventoried Low customer interaction SERVICES Intangible product Inconsistent product definition Produced & consumed at same time Cannot be inventoried High customer interaction

Current Issues in OM Effectively consolidating the operations resulting from mergers. Developing flexible supply chains to enable mass customization of products and services. Managing global supplier, production and distribution networks. Increased “commiditization” of suppliers. Achieving the “Service Factory”. Achieving good service from service firms.

Exercise Via the McGraw-Hill Operations Site (see “Web Links”), take several “plant tours” – observe how items are produced, how services are provided, and what are some outstanding issues discussed. Deliverable: Briefly note some of the products produced and some of the operations issues encountered