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Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Operations ManagementContemporary Concepts and Cases 5/e
Chapter OneThe Operations Function
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Chapter One Outline
Why Study Operations Management?
Definition of Operations Management
Decisions at Pizza U.S.A.Operations Decisions - A Framework
Cross-Functional Decision Making
Operations as a ProcessContemporary Operations Themes
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Why Study Operations Management?
Every decision is cross-functional in nature.
Operations is a major function in everyorganization.
The principles of process thinking can beapplied across the business.
Operations Decisions - A Framework
Operations Management is an interesting andchallenging field of study.
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Definition ofOperations Management
The operations function of an
organization is responsible for producing
and delivering goods or services of value to customers of the organization.
Operations managers make decisions to
manage the transformation process that converts inputs into desired finished goods
or services
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Key Points in OM Definition
1. Decisions the operations manager must make:
• Process, quality, capacity, inventory
2. Functions in the organization.• Operations, marketing, finance
3. Process: planning and controlling the
transformation process and its interfaces
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Major Decisions at Pizza USAA Framework for OM
Process
– How to produce & deliver
Quality
– Criteria, measurement & process for achieving
Capacity
– Physical facilities & labor
Inventory – What, when & how much?
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Cross-FunctionalDecision Making
Operations as the primary function.
Other primary functions:
–
Marketing – Finance
Supporting functions: all others
Major cross-functional decision makingrelationships (See Table 1.2)
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Operations as a Process
Transformation(Conversion)
Process
Input Output
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Operations as a Process
TransformationFabrication
Input OutputTransformationAssembly
Fabrication: making the parts
Assembly: putting the parts together
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Operations as a Process
(Figure 1.1)
Transformation(Conversion)
Process
Energy
Materials
LaborCapital
Information
Goods orServices
Feedback information for
control of process inputs
and process technology
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Relation of Operations to itsEnvironment
(Figure 1.2)
Operations transformation systemSuppliers
Human
ResourcesMarketing
Accounting Finance MIS
Engineering
SOCIETY
GOVERNMENT
ExternalEnvironment
CUSTOMERS
COMPETITORS
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Contemporary Operations Themes
Service and Manufacturing (differences and
implications)
Customer-Directed Operations
Lean Operations
Integration of Operations and Other Functions
Environmental Concerns and sustainability
Supply Chain Management
Globalization of Operations
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Summary
Why Study Operations Management?
Definition of Operations Management
Decisions at Pizza U.S.A.Operations Decisions - A Framework
Cross-Functional Decision Making
Operations as a SystemContemporary Operations Themes
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End of Chapter One