1. Information Management and Operations Overview

2. For Next Week No Class on Monday – MLK Holiday For Wednesday, 1/23
Read
Pages 1-27 of Business Intelligence: Making Better Decisions
Pages of Casino Operations Management
Pages 1-14 of Harrah’s Entertainment Inc. – Available on CULearn in the Additional Readings Folder
First CULearn On-Line Quiz will cover these readings – Open 7:30 – 11:30 AM

3. Operations is all about adding value, and creating wealth.

4. In order to know how much
Information
In order to know how much
wealth you are creating (or losing), you must collect and organize relevant information about your operations.

5. Operations – 80-90% Hidden

6. Transformation Definition
Processes
Goods
Services
Labor
Capital
Materials
INPUTS
OUTPUTS
The design, control, and management of processes that transform inputs into finished goods and services for sale to customers
Data
Usable Information
Feedback

7. Transformation Definition
Managers transform inputs into outputs
Example: Accounting Manager
Inputs: data, materials, labor
Transformation: application of accounting principles and knowledge
Outputs: accounting reports, knowledge of performance, ...
All managers have an “operation” to run
Therefore:
All managers are Operations Managers!

8. Continuum of Characteristics
Mining (coal)
Automobiles
Fast Food
Banking
Consulting
Service
Orientation
Manufacturing
Regardless of orientation, information is required to understand
the operation’s performance.

9. Economic Definition Operations is responsible for improving the
“production function” of the firm.
Information is required to understand how well
the organization is performing.

10. Bicycle Manufacturing
Schwinn ’80s
Huffy
Capital Used
(equipment)
per unit
produced
Serotta
Trek
Labor Used
per unit
produced

11. Bicycle Manufacturing
Desirable
Undesirable!
Capital Used
(equipment)
per unit
produced
Efficient
Frontier
Desirable
Desirable
Labor Used
per unit
produced

12. Added-Value Definition
Business Environment
The Firm
Value Chain
Suppliers
Customers
Value is the customer’s subjective evaluation, adjusted for cost, of how well a good or service meets or exceeds expectations.
Note that:
Value is defined in terms of a singular customer
It is a subjective evaluation
The evaluation is compared with an expectation
Expectations can be influenced and do change
Competitors
adapted from Porter, Competitive Advantage, Free Press, 1985

13. Added-Value Definition
Inputs:
Materials
Labor
Demand
Competition
Ideas
Technology
Outputs:
Goods + Services
= “Products”
How?
Marketing and Operations
“touch the product”
Marketing
Operations

14. Added-Value Definition
Operations is the fundamental means by which firms…Add Value
Information is the way to measure this value.

15. How do Firms Add Value? Greater Flexibility Greater Productivity
Greater variety
Customization for customer needs / desires
Useful Innovation
Features, technology
Better performance
New capabilities
Often unrecognized
Greater Productivity
Lower costs and expenses
Lower prices for the customer
Higher Quality
Better performance
Greater durability, reliability, aesthetics, ...
Better Timeliness
Faster response and turnaround
On-time delivery, meet promises

16. Key Points
Operations is all about adding value for customers. Without value, there is no business.

17. Key Points
Usable information must be captured and organized in a way that managers can understand how much value has been added.

18. Key Points
Every manager is an “operations” manager -- responsible for a transformation process; measured in operating terms (productivity, quality, …)