1. Chapter 1 - Introduction to Operations Managementby
R. Dan Reid & Nada R. Sanders
2nd Edition © Wiley 2005
PowerPoint Presentation by R.B. Clough - UNH
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2. Learning Objectives Define OM Role of OM in business
Decisions that operations managers make
OM differences between service and mfg.
Major historical developments in OM
Identify current trends in OM
Define information flow between OM and other business functions
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3. What is Operations Management?
The business function responsible for planning, coordinating, and controlling the resources needed to produce a company’s products and services
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4. Typical Organization Chart
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5. OM’s Transformation Role
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6. Why OM?
“In business today, the emphasis is not so much on what you make, but on how you do business. Dell makes computers just like every other PC manufacturer.” Quote: KT CEO on CNBC 4/99
The resurgence of American business in the 1990’s capitalized on improved operations.
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7. Differences between Manufacturers and Service Organizations
Services:
Intangible product
Product cannot be inventoried
High customer contact
Short response time
Labor intensive
Manufacturers:
Tangible product
Product can be inventoried
Low customer contact
Longer response time
Capital intensive
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8. Similarities-Service/Manufacturers
All use technology
Both have quality, productivity, & response issues
All must forecast demand
Each will have capacity, layout, and location issues
All have customers and suppliers
All have scheduling and staffing issues
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9. Trends in OM
Service sector growing to 80% of non-farm jobs- See Figure 1-4
Global competitiveness
Demands for higher quality
Huge technology changes
Time based competition
Work force diversity
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10. OM Decisions
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11. Plan of Book-Chapters link to Types of OM Decisions
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12. Historical Development of OM
Industrial revolution Late 1700s
Scientific management Early 1900’s
Human relations movement 1930s to 1960s
Management science Mid-1900s
Computer age s
Just-in-Time Systems (JIT) 1980s
Total quality management (TQM) 1980’s
Reengineering s
Flexibility s
Time-Based Competition 1990s
Supply chain Management 1990’s
Global Competition 1990s
Environmental Issues 1990s
Electronic Commerce Late 1990s
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13. Today’s OM Environment
Customers demand better quality, faster deliveries, and lower costs
Increased cross-functional decision making
Recognized need to better manage information using ERP and CRM systems
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14. Business Information Flow
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15. Chapter 1 Highlights
OM is function that manages the resources that add value
Its role is to transform inputs into products or services
Decisions are many and vary from daily tactical to strategic
Key differences between mfg. and service companies are tangibility of product and degree of customer contact
Historical milestones range from 1700s Industrial Revolution to the modern Electronic Commerce age
OM must understand and implement major process changes like JIT, TQM, supply chain management, and environmental changes
OM works closely with all other business functions
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16. The End
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