Transcript Key Topics - Academics | Saint Michael's College

Key Topics
 Define Operations Management
 Give examples (Inputs – Processes – Outputs)
 Service operations vs. goods production
 Current Challenges in Operations Management
 Quality attributes for services and products
 Total quality management tools
 What is supply chain management
The Big Picture!
Marketing
Demand
Forecasting
Facility
Design
Sales
Management
Advertising
Distribution
Process
Choice
Operations
Management
Product
Management
Capacity
Technology
Management
Systems
Information
Systems
Risk
Management
Motivation
Product
Design
Organizational
Effectiveness
Business
Strategy
Finance
Leadership
Group
Dynamics/Teams
Networking
Telecommunications
Market
Research
Customer
Satisfaction
JIT
Planning &
Control
Inventory
Management
Quality
Product
Pricing
Product
Costing
Organizational Behavior
Investment
Analysis
Cash
Flow
Valuation
Budgeting
Accounting
Operations Management
 Production: creation of goods and services
 Operations management (OM) is defined as the design,
operation, and improvement of the systems that create
(transform inputs into outputs) and deliver the firm’s
primary products and services
 Each part of the organization, not just operations, must
design and operate processes and deal with quality,
technology and staffing issues
Processes and Operations
Internal and
external customers
Inputs
•
•
•
•
•
•
•
•
Workers
Managers
Equipment
Facilities
Materials
Services
Land
Energy
Processes and
operations
1
Outputs
3
• Services
5
2
4
Information on
performance
• Goods
Small Group Activity
 Identify the inputs, processes, and outputs
for:



Saint Michael’s College
Fletcher Allen Hospital
Ben and Jerry’s Ice Cream
Growth in the Goods and Services Sectors
Services
Services
$4,000
(Billions)
80
60
40
$3,000
$2,000
Goods Production
Goods Production
2000
1998
1996
1994
1992
1990
1988
1986
2000
1998
1996
1994
1992
1990
1988
1986
1984
$1,000
20
1984
Millions of Workers
100
Options for Increasing Contribution
Marketing
Option
Current
Finance &
Accounting
Option
Finance
Costs: -50%
OM Option
Production
Costs: -20%
$100,000
$100,000
$100,000
Sales
Revenue :
+50%
$150,000
Cost of Goods Sold -80,000
-120,000
-80,000
-64,000
Sales
Gross Margin
20,000
30,000
20,000
36,000
Finance Costs
-6,000
-6,000
-3,000
-6,000
Net Margin
14,000
24,000
17,000
30,000
Taxes @ 25%
-3,500
-6,000
-4,250
-7,500
Contribution
10,500
18,000
12,750
22,500
Significant Events in Operations Management
Continuum of Characteristics
More like a
manufacturing
organization
•
•
•
•
•
Physical, durable product
Output that can be inventoried
Low customer contact
Long response time
Regional, national, or
international markets
• Large facilities
• Capital intensive
• Quality easily measured
More like
a service
organization
• Intangible, perishable product
• Output that cannot be
inventoried
• High customer contact
• Short response time
• Local markets
• Small facilities
• Labor intensive
• Quality not easily measured
New Challenges in OM
From
To
 Local or national focus
 Global focus
 Batch shipments
 Just-in-time
 Low bid purchasing
 Supply chain partnering
 Lengthy product
 Rapid product
development
development, alliances
 Standard products
 Mass customization
 Job specialization
 Empowered employees,
teams
Competitive Priorities
Cost
Quality
Time
Flexibility
1.
2.
3.
4.
5.
6.
7.
8.
Low-cost operations
High-performance design
Consistent quality
Fast, Reliable delivery
On-time delivery
New development speed
Customization
Volume flexibility
Operating system capabilities and strengths required to serve
customers and outperform competitors
Southwest Airline’s Low Cost Competitive
Advantage
Small Group Activity
 What makes a quality good?
 What makes a quality service?
Dimensions of Quality for Goods
 Operation
 Reliability & durability
 Conformance
 Serviceability
 Appearance
 Perceived quality
Quality
Service Quality Attributes
Reliability
Responsiveness
Tangibles
Competence
Understanding
Access
Security
Courtesy
© 1995 Corel Corp.
Credibility
Communication
Seven Tools for TQM
Supply-Chain Management
Supply Chain Management is primarily
concerned with the efficient integration of
suppliers, factories, warehouses and stores so
that merchandise is produced and distributed in
the right quantities, to the right locations and at
the right time, and so as to minimize total system
cost subject to satisfying service requirements.
SCM, is a strategic weapon that seeks to
synchronize a firm’s functions and those of its
suppliers to match the flow of materials, services,
and information with customer demand
Integrated Supply Chain
Phase 1:
Independent
supply-chain
entities
Suppliers
Phase 2:
Internal
integration
Suppliers
Purchasing
Production
Distribution
Purchasing Production Distribution
Internal supply chain
Materials management department
Phase 3:
Supply-chain
integration
Suppliers
Internal
supply
chain
Customers
Integrated supply chain
Customers
Customers