Production and Process Management Lesson 1 Introduction

About the syllabus Lecturers (in alphabetical order): Ágnes Kotsis, assistant professor András István Kun, assistant professor 2 lecture (Tuesday) and 2 seminar (Thursday) in every week Syllabus will be available on the internet Calculators are needed on the seminars!

About the Requirements The calculation of the final grade is as follows: mid-term test30% end-term test (exam)70%

Compulsory reading Selected chapters from: Stevenson J. William (2009): Operations Management. 10th edition. McGraw-Hill Irvin, London.

Mid-term test Students are required to take the mid- term test. There is only one possibility to retake the mid-term test in the study period. Multiple choices + calculations

Roots of operations management I. Industrial revolution (1770’s) Scientific management (1911) Mass production Standardizing (interchangeable parts) Division of labor Human relations (HR) movement ( ) Decision models (1915, ’s) Influence of Japanese management

Roots of operations management II. Production and production management Production: creation of finished goods (and services) using the factors of production: land, labor, capital (+ enterpreneurship, knowledge) Production magagement: Planning, implementation, and control of industrial production processes to ensure smooth and efficient operation (the activites of managers do to help their firms create goods). Ensures that goods (and services) are produced efficiently; that they are of the right quality, quantity, cost; and that they are produced on time. As service sector becomes larger, concepts of (industrial) production management become influenced by it.

Differences between products and services (can they be distiquished?) Characteristic ManufacturingService 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

Operations management Includes the production of services. The term production has been repleaced by operations. Specialized area in management that converts or transforms resources into goods and services. It managing systems and processes as well.

Process management Process: actions that transform inputs into outputs Upper-managment processes Governance, strategy Operational processes Core processes that make up the value stream Supporting processes These enhances the core processes

Adding value InputsOutputs Transformational processes Feedback Organization Business environment

The Value Chain Suppliers’ Value Chain Customers’ Value Chain

Supply Chain A sequence of activities and organisations involved in producing and delivering goods and services. Supplier Storage } Mfg.StorageDist.RetailerCustomer

The place of operations management between other funcions Head of the Organization Finance Operations Marketing Organziational Functions

Operations overlap Operations Finance Marketing

Operations interfaces ) Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal

Key decisions What to produce / amount to produce When to produce / to order / to supply Where Is the best location for work / process / store etc. How designed Who to do the work (or which team)

Key responsibilities 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

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