1. ISMT 161: Introduction to Operations Management1 Production and Operations Management CHAPTE R 1

2. ISMT 161: Introduction to Operations Management2 Operations Management u Operations function consists of all activities directly related to producing goods or providing services.

3. ISMT 161: Introduction to Operations Management3 Business Operations Overlap Marketing Production/ Operations Finance

4. ISMT 161: Introduction to Operations Management4 A supply chain Management Perspective Operations Management and coordinate - Serving the customers and making profit Operations Distribution SuppliesDemand Customers Flows in both directions Information flow: demand data, inventory, etc. Material flow: moving of goods, rework, recycling, etc Financial flow: cash receivable, consignment contracts, etc.

5. ISMT 161: Introduction to Operations Management5 Types of Operations

6. ISMT 161: Introduction to Operations Management6 Value-Added zThe difference between the cost of inputs and the value or price of outputs. Inputs Land Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback Value added

7. ISMT 161: Introduction to Operations Management7 Food Processor

8. ISMT 161: Introduction to Operations Management8 Hospital Process

9. ISMT 161: Introduction to Operations Management9 Examples zMany of the idea originated from manufacturing (why?) zThe line between service and manufacturing is blurring zThe methodology and practice now start to move to the service industry (why?) zCan you think of any Operations Management ideas in the ancient Chinese history?

10. ISMT 161: Introduction to Operations Management10 Decision Making zSystem Design (long term) ycapacity ylocation yarrangement of departments yproduct and service planning yacquisition and placement of equipment

11. ISMT 161: Introduction to Operations Management11 Decision Making zSystem operation (short term) ypersonnel yinventory yscheduling yproject management yquality assurance

12. ISMT 161: Introduction to Operations Management12 Major Characteristics of Production Systems zDegree of standardization zType of operation yproject yjob shop yrepetitive production ycontinuous processing

13. ISMT 161: Introduction to Operations Management13 Manufacturing or Service? Tangible Act

14. ISMT 161: Introduction to Operations Management14 Key Differences zCustomer contact zUniformity of input zLabor content zUniformity of output zMeasurement of productivity zQuality assurance These differences are beginning to fade in many cases

15. ISMT 161: Introduction to Operations Management15 Manufacturing vs. Service

16. ISMT 161: Introduction to Operations Management16 Responsibilities of Operations Managers zPlanning yCapacity yLocation yProducts and services yMake or buy yLayout yProjects yScheduling zControlling yInventory yQuality z Organizing yDegree of centralization ySubcontracting z Staffing yHiring/laying off yUse of Overtime z Directing yIncentive plans yIssuance of work orders yJob assignments

17. ISMT 161: Introduction to Operations Management17 Models zA model is an abstraction of reality. yPhysical ySchematic yMathematical What are the pros and cons of models? Tradeoffs

18. ISMT 161: Introduction to Operations Management18 Systems Approach “The whole is greater than the sum of the parts.” Suboptimization

19. ISMT 161: Introduction to Operations Management19 Quantitative Approaches zLinear programming zQueuing Techniques zInventory models zProject models zStatistical models

20. ISMT 161: Introduction to Operations Management20 Pareto Phenomenon zA vital few things are important for reaching an objective or solving a problem. z80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?

21. ISMT 161: Introduction to Operations Management21 Recent Trends zGlobal competition zOperations strategy zTotal quality management (TQM) zFlexibility zTime reduction

22. ISMT 161: Introduction to Operations Management22 Recent Trends (Continued) zTechnology zWorker involvement zReengineering zEnvironmental issues zService