Chase: Chapter 1

Overview of Operations – Manufacturing and Service

3

Why Study Operations (Manufacturing & Services) Management?

OperationsManagement

Business Education

Systematic Approachto Org. Processes

Career Opportunities

Cross-FunctionalApplications

4

Operations ManagementDefinition

Operations management may be defined

as the design, operation, and

improvement of the production system

that creates the firm’s primary products

and services.

What is a Production System?Defined

A production system is defined as a

user of resources to transform inputs into

some desired (value-added) outputs.

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Operations Decision MakingMarketplace

Corporate Strategy

Operations Strategy

Operations Management

Marketing StrategyFinance Strategy

People Plants Parts Processes

Planning and Control

Production System

Materials &Customers

Input

Products &Services

Output

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OM Involves Managing Transformations

Input Output

People Plants Parts Processes Planning and Control

TransformationProcess

(Value Adding)

Transformation is enabled by The 5 Ps of OM:

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Transformations

Physical--manufacturing

Locational--transportation

Exchange--retailing

Storage--warehousing

Physiological--health care

Informational--telecommunications

[211,303,330,331]

[211,435]

[221,330,433]

[211,330,433]

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Core “Factory Services” - that customers want

- these are also called critical performance

objectives of operations function - firms Compete

on these bases.

Quality and Quality Reliability (i.e. make it good)

Flexibility

Speed

Price (or production cost)

What is a Service and What is a Good?

“If you drop it on your foot, it won’t hurt you.” (Good or service?)

“Services never include goods and goods never include services.” (True or false?)

Emerging concept/model in Operations – “every organization is in the service business”

i.e. the facilitating goods concept – if you make a tangible product, you then just facilitating some goods.

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Value-Added Factory Services

- these apply to both internal and external

customers of the firm.

Information

Problem Solving

Sales Support

Field Support

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Development of OM as a Field

ScientificManagement

Moving AssemblyLine

HawthorneStudies

OperationsResearch

HistoricalUnderpinnings

Computers(MRP)

JIT/TQC &Automation

ManufacturingStrategy

Service Qualityand Productivity

TQM & QualityCertification

Business ProcessReengineering

ElectronicEnterprise

Global SupplyChain Mgmt.

OM's Emergenceas a Field

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Current Issues Speeding up the time it takes to get new

products into production.

Developing flexible production systems to enable mass customization of products and services.

Managing and integrating global production networks.

Developing and integrating new production technologies into existing production systems.

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Current Issues

Achieving high quality quickly and keeping it up in the face of restructuring.

Supply chain management challenges: co-production of goods and services

Outsourcing and Globalization pressures – managing global supplier, production and distribution networks

Managing a diverse workforce.

Operations security concerns

Conforming to environmental constraints, ethical standards, and government regulations.

Fast-forward to the Future of Operations/Manufacturing

Extensive use of collaborative product development tools (virtual reality)

Intelligent logistics and process control – extensive use of RFID technologies in planning and control

More customization of the product development process