2. Introduction to Operation Management Pertemuan 01 Mata kuliah: J0444 - Manajemen Operasional Tahun: 2010

3.  Multi Channel Learning  Self Study  Face to Face (On Class)  eLearning “Binus Maya”  GSLC (Off)  Mempersiapkan field trip  Tugas :  Binus Maya (wajib dikerjakan)  Lainnya (dosen bersangkutan)  Aturan keterlambatan masuk ruang kuliah  Tata Tertib di dalam kelas Mekanisme Perkuliahan

4. Learning Objectives Define the term operations management Identify the three major functional areas of organizations and describe how they interrelate Compare and contrast service and manufacturing operations Describe the operations function and the nature of the operations manager’s job Identify and define productivity

5. Operations Management Operations Management is: The management of systems or processes that create goods and/or provide services Operations Management affects: –Companies’ ability to compete –Nation’s ability to compete internationally

6. The Economic System Transforms Inputs to Outputs The economic system transforms inputs to outputs at about an annual 2.5% increase in productivity (capital 38% of 2.5%), labor (10% of 2.5%), management (52% of 2.5%) Land, Labor, Capital, Manageme nt Goods and Services Feedback loop InputsProcessOutputs

7. 1-7 Automobile assembly, steel making Home remodeling, retail sales Automobile Repair, fast food Goods-service Continuum Computer repair, restaurant meal Song writing, software development GoodsService Surgery, teaching

8. Food Processor InputsProcessingOutputs Raw VegetablesCleaning Canned vegetables Metal SheetsMaking cans WaterCutting EnergyCooking LaborPacking BuildingLabeling Equipment

9. Hospital Process InputsProcessingOutputs Doctors, nursesExaminationHealthy patients HospitalSurgery Medical SuppliesMonitoring EquipmentMedication LaboratoriesTherapy

10. Manufacturing or Service? Tangible Act

11. Characteristics of Goods  Tangible product  Consistent product definition  Production usually separate from consumption  Can be inventoried  Low customer interaction © 1995 Corel Corp.

12. Characteristics of Service  Intangible product  Produced & consumed at same time  Often unique  High customer interaction  Inconsistent product definition  Often knowledge-based  Frequently dispersed © 1995 Corel Corp.

13. Key Differences 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 6. Production and delivery 7. Quality assurance 8. Amount of inventory 9. Evaluation of work 10. Ability to patent design

14. Goods vs Service CharacteristicGoodsService Customer contactLowHigh Uniformity of inputHighLow Labor contentLowHigh Uniformity of outputHighLow OutputTangibleIntangible Measurement of productivityEasyDifficult Opportunity to correct problemsHighLow InventoryMuchLittle EvaluationEasierDifficult PatentableUsuallyNot usual

15. Operations Management includes: –Forecasting –Capacity planning –Scheduling –Managing inventories –Assuring quality –Motivating employees –Deciding where to locate facilities –Supply chain management –And more... Scope of Operations Management

16. Types of Operations OperationsExamples Goods ProducingFarming, mining, construction, manufacturing, power generation Storage/TransportationWarehousing, trucking, mail service, moving, taxis, buses, hotels, airlines ExchangeRetailing, wholesaling, banking, renting, leasing, library, loans EntertainmentFilms, radio and television, concerts, recording CommunicationNewspapers, radio and television newscasts, telephone, satellites

17. Key Decisions of Operations Managers What What resources/what amounts When Needed/scheduled/ordered Where Work to be done How Designed Who To do the work

18. Organizational Functions Marketing –Gets customers  Operations  creates product or service  Finance/Accounting  Obtains funds  Tracks money © 1995 Corel Corp.

19. Functions - Bank Operations Finance/ Accounting Marketing Check Clearing Teller Scheduling Transactions Processing Security Commercial Bank © 1984-1994 T/Maker Co.

20. Functions - Manufacturer Operations Finance/ Accounting Marketing Production Control Manufacturing Quality Control Purchasing Manufacturing

21. Business Operations Overlap Operations Finance Marketing

22. Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance Personnel Purchasing Distribution MIS Legal

23. Trends in Business Major trends –The Internet, e-commerce, e-business –Management technology –Globalization –Management of supply chains –Outsourcing –Agility –Ethical behavior

24. Other Important Trends Ethical behavior Operations strategy Working with fewer resources Revenue management Process analysis and improvement Increased regulation and product liability Lean production

25. Why Study OM?

26. OM is one of three major functions (marketing, finance, and operations) of any organization. We want (and need) to know how goods and services are produced. We want to understand what operations managers do. OM is such a costly part of an organization.

27. What Operations Managers Do Plan - Organize - Staff - Lead - Control

28. The Critical Decisions Quality management –Who is responsible for quality? –How do we define quality? Service and product design –What product or service should we offer? –How should we design these products and services?

29. The Critical Decisions Process and capacity design –What processes will these products require and in what order? –What equipment and technology is necessary for these processes? Location –Where should we put the facility –On what criteria should we base this location decision?

30. The Critical Decisions Layout design –How should we arrange the facility? –How large a facility is required? Human resources and job design –How do we provide a reasonable work environment? –How much can we expect our employees to produce?

31. The Critical Decisions Supply chain management –Should we make or buy this item? –Who are our good suppliers and how many should we have? Inventory, material requirements planning, –How much inventory of each item should we have? –When do we re-order?

32. The Critical Decisions Intermediate, short term, and project scheduling –Is subcontracting production a good idea? –Are we better off keeping people on the payroll during slowdowns? Maintenance –Who is responsible for maintenance? –When do we do maintenance?

33. New Challenges in OM Local or national focus Batch shipments Low bid purchasing Lengthy product development Standard products Job specialization  Global focus  Just-in-time  Supply chain partnering  Rapid product development, alliances  Mass customization  Empowered employees, teams From To

34. The Challenge of Social Responsibility Increasing emphasis on business and social responsibility

35. Where are the OM Jobs

37. Competitiveness: How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services

38. Businesses Compete Using Marketing Identifying consumer wants and needs Pricing Advertising and promotion

39. Businesses Compete Using Operations Product and service design Cost Location Quality Quick response

40. Businesses Compete Using Operations Flexibility Inventory management Supply chain management Service and service quality Managers and workers

41. Productivity –A measure of the effective use of resources, usually expressed as the ratio of output to input Productivity ratios are used for –Planning workforce requirements –Scheduling equipment –Financial analysis

42. Partial measures – output/(single input) Multi-factor measures – output/(multiple inputs) Total measure – output/(total inputs) Productivity= Outputs Inputs

43. Productivity Growth Current Period Productivity – Previous Period Productivity Previous Period Productivity Productivity Growth =

44. Measures of Productivity Partial Output Output Output Output measures Labor Machine Capital Energy Multifactor Output Output measures Labor + Machine Labor + Capital + Energy Total Goods or Services Produced measure All inputs used to produce them

45. Example : 7040 Units Produced Cost of labor of $1,000 Cost of materials: $520 Cost of overhead: $2000 What is the multifactor productivity?

46. Solution : MFP =Output Labor + Materials + Overhead MFP =(7040 units) $1000 + $520 + $2000 MFP =2.0 units per dollar of input

47. Measurement Problems Quality may change while the quantity of inputs and outputs remains constant External elements may cause an increase or decrease in productivity Precise units of measure may be lacking

48. Productivity Variables Labor - contributes about 10% of the annual increase Capital - contributes about 32% of the annual increase Management - contributes about 52% of the annual increase

49. Key Variables for Improved Labor Productivity Basic education appropriate for the labor force Diet of the labor force Social overhead that makes labor available Maintaining and enhancing skills in the midst of rapidly changing technology and knowledge

50. Service Productivity Typically labor intensive Frequently individually processed Often an intellectual task performed by professionals Often difficult to mechanize Often difficult to evaluate for quality

51. The End