Chase: Chapter 1
Overview of Operations – Manufacturing and Service
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Why Study Operations (Manufacturing & Services) Management?
OperationsManagement
Business Education
Systematic Approachto Org. Processes
Career Opportunities
Cross-FunctionalApplications
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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