OPERATIONS and LOGISTICS MANAGEMENT Introduction & Importance Scope & Trends Careers & Course Overview Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Philip A. Vaccaro , PhD

Operations Management Definition The competent and adept management of complex systems in the service, non- profit, manufacturing, and government sectors via the effective and efficient utilization of time, labor, money, and materials in the generation of goods and/or services. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-2

Overview Operations Management plans for, and creates the competitive advantages that all businesses need for fueling profitable growth. As a result, OM is the most critical of the business functions. Studying OM means studying modern planning, decision-making and management methods in all functional areas of an organization, including strategic and tactical planning, products and services development, product and project management, process and supply chain management, and more. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-3

Why Study OM? Operations Management is one of the three major functions of any organization……and they are integrally related. MARKETING THE STRATEGIC TRIAD FINANCE All firms market (sell) , finance (account), and produce (operate) OPERATIONS Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-4

Why Study OM? Operations Management shows us how goods and services are generated. Consequently, it is the……… foundation of all business ! Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-5

Why Study OM? Operations Management shows us what OM managers do. This enables us to learn the skills, techniques, and models needed to practice 21st century management, and to also explore the lucrative career oppor- tunities in OM. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-6

Why Study OM? Operations Management represents as much as 70% of the operating budget of most firms due to: Manufacturing activity Warehousing Distribution Inventory Control Research and Development Maintenance Facilities and Equipment Worker training Cost and Quality Control Planning and Scheduling Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-7

Why Study OM? Operations Management, by virtue of its huge collective budget, provides a major opportunity for the firm to improve its profitability. In fact, OM has become the last resort for most firms that have exhausted the potential of marketing, finance, and general management. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-8

Why Study OM? About 40% of all jobs in the United States are in Operations Management. Exposure to the following disciplines will enhance one’s job prospects: Operations research Statistics Information systems Economics Logistics / Transportation Mathematics Accounting / Finance Computer science Engineering Manufacturing Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-9

What OM Managers Do Supervise skilled trade workers & technicians. Manage the production and technical operations. Integrate new technology into manufacturing and service processes. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-10

What OM Managers Do Develop, monitor, and update measures of efficiency. change operating plans and schedules. Control costs and quality. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-11

What OM Managers Do Evaluate and improve the existing operating system in terms of productivity and customer responsiveness. Translate improved operating systems into competitive ad- vantage in the marketplace. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-12

OM Necessary Skills Keen understanding of people and processes. Ability to solve problems in multi-disciplinary teams. Strong leadership/coordinating ability. Strong analytical and problem-solving skills. Strong interpersonal communication skills. Strong background in mathematics. Strong background in computer programming. Proficiency in one or more foreign languages. Graduate degree in the field or a related field. Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-13

Exciting New Trends in OM Global Focus and Just-in-Time Shipments Low cost, reliable global communication networks Cost of capital putting pressure on reducing inventories Low cost, reliable global transportation networks Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-14

Exciting New Trends in OM Supply Chain Partners Rapid Product Development Quality emphasis requires supplier engagement in product improvement Shorter production cycles and computer-aided design International collaboration and rapid communication Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-15

Exciting New Trends in OM Empowered Employees Mass Customization Lean Production Affluence and world-wide markets Increasingly flexible production processes Increasingly knowledge and information-based society Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions Chapter 1-16

Career Possibilities Business Executive Purchasing Agent Blue-Collar Supervisor Construction Manager Production Manager Operations Manager Information System Manager Materials Manager Project Manager Customer Service Mgr Defense Analyst Purchasing Agent Inventory Analyst Cost Estimator Systems Analyst Industrial Engineer Quality Control Mgr Time & Motion Analyst Operations Scheduler Operations Planner Process Improvement Manager

Career Possibilities In corporations, OM managers are responsible for developing new products and services, the strategic and tactical plans, and the execution of those plans Demand for OM managers is particularly high in financial services, IT, manufacturing, non-profit, government, education, and health care Entrepreneurs will find OM knowledge pivotal Advancement opportunities are superior in almost all industries, and commonly lead to senior leadership positions