Introduction to Operations Management and Competitiveness OPSM 330

What is Operations Management? System Operations can be defined as a : Function

System

System Types of Transformation: Types of Transformation: –physical—as in the manufacture of goods –locational—as in transportation or warehouse operations –exchange—as in retail operations –psychological—as in entertainment, or –informational—as in communications Types of Activities Types of Activities –Value-Adding –Non Value-Adding  Ex.: Tool Crib (Excess Travel)  Ex.: Registering for Classes Old Way (Waiting)

Production Chain Raw Material Extraction Materials Processing Parts Fabrication or Formation Sub- Assembly Assembly Packing and Finishing >>>>>>>>>>>>Mining Steel- Making Making Pistons from Steel Assemb- ling Pistons in Engines Assemb- ling Engines in Cars Painting and Finishing

IN-LINE EXERCISE: See if you can match the following activities for producing frozen dinners with the appropriate production chain activity: Packing and sealing food cartons Raw material extraction Harvesting vegetablesMaterials processing Mixing vegetables with other dinner ingredients Parts fabrication or formation Cleaning, sorting, and sterilizing vegetables Assembly Cutting and dicing vegetables Packing and Finishing Answer

Function

Functional Roles Technical Core Technical Core –Example: Ford Knowledge to Support Other Functions Knowledge to Support Other Functions –Example: Finance needs to understand JIT Technical Support Technical Support –Example: Hospital As Part of Other Functional Role As Part of Other Functional Role –Example: Accounting Firm

Careers and Jobs Operations Manager, plant manager, director of manufacturing Operations Manager, plant manager, director of manufacturing Material Manager Material Manager Purchasing Manager Purchasing Manager Inventory Manager Inventory Manager Production Control and Scheduling Manager Production Control and Scheduling Manager Quality Manager Quality Manager Facility Manager Facility Manager Logistics Planner Logistics Planner Operations Planning Analyst Operations Planning Analyst

Modern History of Operations Management Production Has Been in Existence a Long Time Prior to Markets, Cottage Industries, Farms First Factories – Textile Industry in England Subsistence Production Disappointed Merchants Centralization of Production in Factories Exploitation

Discussion Questions Since the beginning of human history, nature guided how humans lived. When it was hot, people hunted, planted, and prepared for the winter. When it was cold, people stayed indoors; when dark, they slept, etc. Only in the last 150 years have people dramatically changed how they live. Consider: is it really "normal" and "human" to wake up at 6:00 a. m. 5 days a week, get in a box on wheels and go to a building away from home for 9 hours, then return home for a few hours, sleep, and do it all again the next week -- for 50 weeks a year with an arbitrary two week break for vacation!!?? Wouldn’t it seem bizarre for a time traveler from the 18 th century observing all this? Since the beginning of human history, nature guided how humans lived. When it was hot, people hunted, planted, and prepared for the winter. When it was cold, people stayed indoors; when dark, they slept, etc. Only in the last 150 years have people dramatically changed how they live. Consider: is it really "normal" and "human" to wake up at 6:00 a. m. 5 days a week, get in a box on wheels and go to a building away from home for 9 hours, then return home for a few hours, sleep, and do it all again the next week -- for 50 weeks a year with an arbitrary two week break for vacation!!?? Wouldn’t it seem bizarre for a time traveler from the 18 th century observing all this? Discussion Points: Technology imperative drives lifestyle today, while nature drove it in the past; desires created by market development affect our values; circumstances we are born into affect our free will vs. determinism. We have more free will in some ways, but limits in how we live in other ways. Mobility, for example is prolific in industrialized societies; cozy. pastoral lifestyles are ever more difficult, but with effort, free will allows us to pursue such a possibility. (Back to Website)

Major Events Industrial Revolution Industrial Revolution Scientific Management Scientific Management Human Relations Movement Human Relations Movement Modern Age Development Modern Age Development Information Revolution and Internet Information Revolution and Internet Globalization Globalization

Industrial Revolution Great Invention (Steam Engine, etc.) Great Invention (Steam Engine, etc.) Raw Materials in New World Raw Materials in New World Publication of Wealth of Nations Publication of Wealth of Nations –Capitalism –Division of Labor –Innovation (Product and Process) Interchangeable Parts Interchangeable Parts

Industrial Revolution A period of great invention A period of great invention Invention of steam engine (James Watt) Invention of steam engine (James Watt) Substitution of machine labor for human labor Substitution of machine labor for human labor

Industrial Revolution Availability of Coal and Iron in the “New World” – Massive Consumption of Raw Materials

Industrial Revolution

Capitalism Capitalism –Wealth of Nations –Adam Smith

Capitalism

Capitalism

Capitalism

Capitalism

Profit and Competition

Capitalism

Division of Labor and Specialization

Pin and Needle Manufacturing

Interchangeable Parts Eli Whitney

Scientific Management Frederick Taylor “One Best Way” Time and Motion Bethlehem Steel

“Herr Schmidt” Shoveling Coal

Scientific Management Time and Motion Studies

Ford and Innovation

Ford and the Assembly Line

Productivity Increases Standard of Living

Human Relations Movement

Hawthorne Studies

Human Relations Movement People Aren’t Machines!

Modern Age Development Operations Research

REVOLUTION

INFORMATION AGE

FLEXIBLE MANUFACTURING SYSTEMS ROBOTICS COMPUTER INTEGRATED MANUFACTURING WORLD WIDE WEB INTERNET E-COMMERCE

GLOBALIZATION

DEVELOPING NATIONS AND DEVELOPED NATIONS

GLOBALIZATION AND THE UNITED STATES 1920’s to 1960’s – –Mass Production – –Increased Standard of Living 1970’s to 1990’s – –Stagflation, “rust belt,” decline? – –Greater flexibility, global competition, rapidly changing technology, high productivity 2,000 to present – –Intense global competition – –China and India – –Developing Nations – High growth rates – –Developed Nations – Productivity Advantage Challenge of Course – Prevent Poor Management Knowledge

Competitiveness is defined as: the degree to which a nation can, under rapidly changing market conditions, produce goods and services that meet the test of international markets, while simultaneously expanding the real incomes of its citizens.

Measures of Competitiveness include (among many others): GDP—gross domestic product import/export ratio (the lower the better) increases in productivity More...