Transcript Operations Management (OM 360)

Operations Management
COB 300C
Dr. Michael Busing
08-28-02
Some Definitions of Operations
Management
• Management of productive resources
• Design and control of systems responsible
for productive use of:
– raw materials (or supplies for service
operations)
– people (direct and indirect workforce)
– equipment/facilities (factories or service
branches)
– information (planning and control systems)
Operations Management (COB 300 C)versus
Management Science (COB 291)
• OM is a field of management
• Management Science is the application of
quantitative methods to decision making in
all fields
• OM decisions are made in the context of the
firm as a whole -- starting with customers
(i.e., the marketplace) and explicitly
considering a firm’s corporate strategy.
The Production System
• The production system is the heart of OM.
– Uses resources to transform inputs into some
desired output.
Inputs
•
•
•
•
•
•
RMH - patients
BW3 - hungry/thirsty customers
General Motors - sheet steel, engine parts
JMU - high school students
Pier One - shoppers
Target Distribution Center - stockkeeping
units (SKU’s)
Transformations
• RMH - health care procedures
• BW3 - preparation/service of food/drink
• General Motors - fabrication and assembly
of cars
• JMU - imparting of knowledge and skills
• Pier One - filling of orders
• Target Distribution Center - storage and
redistribution
Desired Outputs
•
•
•
•
•
•
RMH - healthy individuals
BW3 - satisfied customers
General Motors - high quality cars
JMU - educated and employable individuals
Pier One - sales to satisfied customers
Target Distribution Center - right item at
right place at right time.
Why Study Operations Management?
• OM activities are at the core of all business organizations
regardless of what business they are in
• At least 35% of all jobs are in OM related areas
– customer service, quality assurance, production
planning and control, scheduling, job design, inventory
management
• Other functional areas such as information systems,
finance, accounting, human resources, logistics, marketing,
purchasing, etc. are all interrelated with OM activities.
Operations Management
Professional Societies
• American Production and Inventory Control
Society (APICS)
• American Society for Quality (ASQ)
• National Association of Purchasing
Management (NAPM)
Functions Within Business
Organizations
• Organizations are formed to pursue goals
that are achieved more efficiently by the
concerted efforts of a group of people than
by individuals working alone.
• Organizations are either profit or nonprofit.
Functions Within Business
Organizations
• Three Basic Functions
– finance
– marketing
– production/operations
• Functions must interact to achieve the goals
and objectives of the organization.
• Success depends not only on the individual
functional area, but on the interface.
Operations as it Relates to Other
Disciplines
Functions Within Business
Organizations
Personnel
/Human
Resource
s
OM/Finance Interrelationship
• Budgeting: Operating performance standard costs versus actual costs
• Economic Analysis: Evaluation of various
plant/equipment alternatives
• Funding/Provision of funds: Cash Flow
issues - how much/when
OM/Marketing Interrelationship
• Advertising/pricing decisions are made by
marketing people.
• Marketing is closest to customer
wants/needs and can communicate these to
operations (short and long term
requirements).
• Marketing is in tune with competition.
OM/HR Relationship
• Aggregate Planning
– Hiring/Firing Decisions
– Undertime/Overtime Issues
• Workplace Safety Issues
• Quality/Training Programs
• Productivity/Motivation Issues
Current Event
Operations System design versus
operation
• System Design Decisions: involves
decisions that relate to system capacity,
geographic location of facilities,
arrangement of departments and placement
of equipment, product and service planning,
and acquisition of equipment.
Operations System design versus
operation
• System Operation Decisions: management
of personnel, inventory planning and
control, scheduling, project management,
and quality assurance
Operations System design versus
operation
• System design essentially determines many
of the parameters of system operation.
– e.g., cost, space capacities, and quality
Differentiation Features of
Operations Systems
• Degree of Standardization (standardized
versus customized) - volume versus cost
• Type of operation (job shop versus
assembly line versus flow)
• Goods versus Services
– customer contact, uniformity of input, labor
content, uniformity of output, measurement of
productivity, quality assurance.