1. Introduction to OM Chapter 1

7/25/2019 1. Introduction to OM Chapter 1

1/87

Heizer, Render, Griffin

Operations Management

Canadian Edition

Chapter 1: Operations and Productivity

Copyright 2014 PearsonCanada Inc.

Slides adapted for Canada by Mats Gerschman


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ADM 3301 ~ Rim Jaber

O!t"ine

#$at %s Operations Management&

Organizing 'o (rod!)e Goods And *er+i)es#$ *t!d OM&

#$at Operations Managers Do

Ho- '$is .oo/ %s Organized


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ADM 3301 ~ Rim Jaber 3

O!t"ine Contin!ed

'$e Heritage Of Operations Management

Operations %n '$e *er+i)e *e)tor

Differen)es .et-een Goods And *er+i)es Gro-t$ Of *er+i)es

*er+i)e (a

E)iting 2e- 'rends %n OperationsManagement


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O!t"ine Contin!ed

'$e (rod!)ti+it C$a""enge

(rod!)ti+it Meas!rement

(rod!)ti+it 4ariab"es(rod!)ti+it and t$e *er+i)e *e)tor

Et$i)s and *o)ia" Responsibi"it


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6earning Ob7e)ti+es

When you complete this chapter,When you complete this chapter,you should be able to:you should be able to:

Define Operations management (OM)Define Operations management (OM)

Explain the distinction betweenExplain the distinction between

goods and sericesgoods and serices

Explain the difference betweenExplain the difference between

!roduction and productiity!roduction and productiity


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6earning Ob7e)ti+es


Describe or Explain :Describe or Explain :" brief history of operations" brief history of operations

managementmanagement

#areer opportunities in operations#areer opportunities in operationsmanagementmanagement

$he future of the discipline$he future of the discipline


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6earning Ob7e)ti+es


#ompute single%factor productiity#ompute single%factor productiity

#ompute multifactor productiity#ompute multifactor productiity

&dentify the critical ariables in&dentify the critical ariables inenhancing productiityenhancing productiity


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ADM 3301 ~ Rim Jaber :

#$at %s Operations

Management&

Productionis t$e )reation of goods

and ser+i)es

Operations management (OM)is

t$e set of a)ti+ities t$at )reates +a"!e

in t$e form of goods and ser+i)es btransforming inp!ts into o!tp!ts


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ADM 3301 ~ Rim Jaber ;

< Transformations:= ($si)a" transformationsman!fa)t!ring

=6o)ationa" transformationstransportation

=E)$ange operationsretai"ing=*torage operations-are$o!sing

=($sio"ogi)a" operations$ea"t$ )are

= %nformationa" transformationste"e)omm!ni)ations


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Organizing to (rod!)e Goods and

*er+i)es

'o )reate goods and ser+i)es, a""

organizations re>!ire t$ree essentia"

f!n)tions?

Mar/eting

(rod!)tion@operations

inan)e@a))o!nting


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< Mar/eting=Gets )!stomers,

Generates demand

< Operations

=Creates t$e goods or ser+i)es

< inan)e@A))o!nting

= 'ra)/s $o- -e"" t$e organizationis doing, pas bi""s, )o""e)ts t$emone

1995 Corel Corp.

ORGA2%BA'%O2A6 2C'%O2*


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Organizationa" C$arts

Operations

$eller'cheduling

#hec #learing

#ollection

$ransactionprocessing

acilitiesdesign*layout

+ault operations

Maintenance

'ecurity

inance

&nestments'ecurity

eal estate

"ccounting

"uditing

Mareting

-oans #ommercial

&ndustrial

inancial

!ersonal

Mortgage

$rust Department

#ommercial .an

ig!re 11AF


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Organizationa" C$arts

Operations/round support

e0uipmentMaintenance

/round Operations

acility maintenance #atering

light Operations

#rew scheduling lying #ommunications Dispatching

Management science

inance*accounting

"ccounting !ayables eceiables /eneral -edger

inance

#ash control &nternational exchange

"irline

Mareting

$raffic

administration

$ariffs (pricing)

'ales

"dertising

eserations 'chedules

ig!re 11.F


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< '$e s!))ess of an organization depends not on"

on $o- -e"" ea)$ area performs, b!t a"so on

$o- -e"" t$e areas interface-it$ ea)$ ot$er

< Eamp"e?

=Marketingis responsib"e for assessing )!stomer

-ants and needs, and for )omm!ni)ating t$ose to

operations peop"e s$ort termF and to design peop"e"ong termF

%2'ERDE(E2DE2C O 'HE 'HREE

MAJOR 2C'%O2*


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=Marketing needs from operationst$e

man!fa)t!ring or ser+i)e "ead time

=Finance and operationsmanagement

)ooperate b e)$anging information and

epertise in? .!dgeting, E)onomi)

ana"sis of in+estment proposa"s, and(ro+ision of f!nds

%2'ERDE(E2DE2C O 'HE 'HREE

MAJOR 2C'%O2*


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#$ *t!d OM&

OM is one of t$ree ma7or f!n)tions

mar/eting, finan)e, and operationsF of an

organization

#e -ant and needFto /no- $o- goods

and ser+i)es are prod!)ed

#e -ant to !nderstand -$at operations

managers do

OM is s!)$ a )ost" part of an organization


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Options for %n)reasingContrib!tion

Table 1.1Copyright 2014 Pearson Canada Inc.


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ADM 3301 ~ Rim Jaber 1;

#$at Operations

Managers Do

("anning

Organizing

*taffing

6eading

Contro""ing

.asic Management unctions.asic Management unctions


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'en Criti)a" De)isions$en Decision "reas$en Decision "reas #hapter(s)#hapter(s)

Design of goods and serices 3 Managing 0uality 4, 4 'upplement !rocess and capacity 5, 5 'upplement

design -ocation strategy 6 -ayout strategy 7 8uman resources and 9, 9 'upplement

;ob design

'upply%chain 99, 99 'upplementmanagement &nentory management, 9&$ 'cheduling 9?, 93 Maintenance 95

Table !"


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'en Criti)a" De)isions$en Decision "reas$en Decision "reas #hapter(s)#hapter(s)

Design of goods and serices 3 Managing 0uality 4, 4 'upplement !rocess and capacity 5, 5 'upplement

design -ocation strategy 6 -ayout strategy 7 8uman resources and 9, 9 'upplement

;ob design

'upply%chain 99, 99 'upplementmanagement &nentory management, 9&$ 'cheduling 9?, 93 Maintenance 95

Table !"


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'$e Criti)a" De)isions

Design of goods and ser+i)es #$at good or ser+i)e s$o!"d -e offer& Ho- s$o!"d -e design t$ese prod!)ts and

ser+i)es&Managing >!a"it Ho- do -e define >!a"it& #$o is responsib"e for >!a"it&

Table !" (cont!)


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(ro)ess and )apa)it design

#$at pro)ess and -$at )apa)it -i"" t$ese

prod!)ts re>!ire&

#$at e>!ipment and te)$no"og is ne)essar

for t$ese pro)esses&

6o)ation strateg

#$ere s$o!"d -e p!t t$e fa)i"it&

On -$at )riteria s$o!"d -e base t$e "o)ation

de)ision&Table !" (cont!)


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6ao!t strateg Ho- s$o!"d -e arrange t$e fa)i"it and

materia" f"o-& Ho- "arge m!st t$e fa)i"it be to meet o!r

p"an&H!man reso!r)es and 7ob design Ho- do -e pro+ide a reasonab"e -or/

en+ironment&

Ho- m!)$ )an -e epe)t o!r emp"oees toprod!)e&

Table !" (cont!)


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*!pp")$ain management

*$o!"d -e ma/e or b! t$is )omponent&

#$o are o!r s!pp"iers and -$o )an integrate

into o!r e)ommer)e program&

%n+entor, materia" re>!irements p"anning,

and J%'

Ho- m!)$ in+entor of ea)$ item s$o!"d -e

$a+e&

#$en do -e reorder& Table !" (cont!)


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%ntermediate and s$ort=term s)$ed!"ing

Are -e better off /eeping peop"e on t$e

paro"" d!ring s"o-do-ns&

#$i)$ 7obs do -e perform net&

Maintenan)e

#$o is responsib"e for maintenan)e&

#$en do -e do maintenan)e&

Table !" (cont!)


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#$ere are t$e OM Jobs&

'e)$no"og@met$ods a)i"ities@spa)e !ti"ization *trategi) iss!es Response time (eop"e@team de+e"opment C!stomer ser+i)e !a"it Cost red!)tion %n+entor red!)tion (rod!)ti+it impro+ement


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I 011 (earson Ed!)ation, %n) p!b"is$ing as (renti)e Ha""

Opport!nities

Figure !"


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ADM 3301 ~ Rim Jaber ;

Certifi)ations

A(%C*, t$e Ameri)an (rod!)tion and%n+entor Contro" *o)iet

E)e""en)e Canada *tandards Co!n)i" of Canada %nstit!te for *!pp" Management

%*MF (ro7e)t Management %nstit!te (M%F Co!n)i" of *!pp" C$ain Management

(rofessiona"s


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'$e Heritage of Operations Management


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*ignifi)ant E+ents in OM

Figure !#


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*%G2%%CA2' E4E2'* %2 OM

'$e %nd!stria" Re+o"!tion?= 1998? Di+ision of 6abor Adam *mit$F

= 1:00? *tandardized (arts E"i #$itneF

*)ientifi) Management?= 1::1? *)ientifi) Management rederi)/ 'a"orF

= 1;13? Coordinated Assemb" 6ine Henri ordF

%nd!stria" (s)$o"og?= 1;? Motion *t!d ran/ 6i""ian Gi"bert$F

= 1;33? Effe)t of En+ironment on Emp"oee (rod!)ti+it

and Moti+ation E"ton MaoF


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33

*%G2%%CA2' E4E2'* %2 OM

De)ision Mode"s and Management *)ien)e?= 1;18? Gantt C$arts Henr GanttF

= 1;19? %n+entor Contro" # HarrisF

= 1;? !a"it Contro" #a"ter *$e-$artF

= 1;3? *amp"ing 'e)$ni>!es 6HC 'ippetF

= 1;0? Operations Resear)$ in Eng"andF

= 1;9? 6inear (rogramming DantzigF

= 1;50? !a"it Contro" Ed-ards DemingF

= 1;501;80? *im!"ation, !e!eing '$eor, De)ision '$eor,

Mat$emati)a" (rogramming, (rogram E+a"!ation and Re+ie-

'e)$ni>!e (ER'F, Criti)a" (at$ Met$od C(MF, Materia"s

Re>!irements ("anning MR(F


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*%G2%%CA2' E4E2'* %2 OM

= 1;901;:0? *oft-are for %n+entor Contro", *)$ed!"ing,

ore)asting= 1;:01;;0? J!st in 'ime J%'F, 'ota" !a"it Management

'MF, Comp!ter %ntegrated Man!fa)t!ring C%MF,

"eib"e Man!fa)t!ring *stems M*F, Comp!ter Aided

Design CADF, Comp!ter Aided Man!fa)t!ring CAMF,Man!fa)t!ring A!tomation (roto)o" MA(F, roboti)s

= 1;;? G"oba"ization

= 1;;5? %nternet

= 000? *mart sstems !t!re based !pon?

management s)ien)e@ information s)ien)e@ b!siness ana"ati)s


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E"i #$itne

$orn %&' died "'

*n %+, recei-ed go-ernment contract

to make .,... muskets Sho/ed that machine tools could

make standardi0ed parts to e1act

specificationsMusket parts could be used in any

musket


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rederi)/ # 'a"or

$orn '& died +'

2no/n as 3father of scientific

management4 *n , as chief engineer for Mid-ale

Steel, studied ho/ tasks /ere done

$egan first motion and time studies

Created efficiency principles


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'a"orKs (rin)ip"es

< Mat)$ing emp"oees to rig$t 7ob< (ro+iding t$e proper training

< (ro+iding proper -or/ met$ods and too"s

!ent" dispersed


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< L%f o! drop it on o!r foot, it -onKt $!rt o!Good or ser+i)e&F

< L*er+i)es ne+er in)"!de goods and goods ne+erin)"!de ser+i)es 'r!e or fa"se&F

< hat about McBonald4sH

= %dentif t$e p$si)a"F prod!)t of M)Dona"dNs&

= *er+i)e or Man!fa)t!ring&

= '$e )ompan )ertain" man!fa)t!res tangib"eprod!)ts, #$ t$en -o!"d -e )onsider M)Dona"dKsa ser+i)e b!siness&

*er+i)e Or Good&


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MA2AC'R%2G (RODC%2GGOOD*F 4ER** *ER4%CE

< Man!fa)t!ring and *er+i)e are oftensimi"ar in terms of /hatis done, b!tdifferent in terms of ho/it is done

< Man!fa)t!ring and ser+i)e organizationsdiffer )$ief" be)a!se man!fa)t!ring is

product


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ADM 3301 ~ Rim Jaber9

GOOD* 4ER** *ER4%CE*

< Can be reso"d

< Can be in+entoried

< *ome aspe)ts of>!a"it meas!rab"e

< *e""ing is distin)t

from prod!)tion

< Rese""ing !n!s!a"

< Diffi)!"t to in+entor

< !a"it diffi)!"t tomeas!re

< *e""ing is part of

ser+i)e

GoodsGoods *er+i)e*er+i)e


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ADM 3301 ~ Rim Jaber :

GOOD* 4ER** *ER4%CE* CO2'%2ED

< (rod!)t istransportab"e

< *ite of fa)i"itimportant for )ost

< Often eas toa!tomate

< Re+en!e generatedprimari" fromtangib"e prod!)t

< (ro+ider, not prod!)t istransportab"e

< *ite of fa)i"it important

for )!stomer )onta)t< Often diffi)!"t to

a!tomate

< Re+en!e generated

primari" fromintangib"e ser+i)e

GoodsGoods *er+i)e*er+i)e


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I 011 (earson Ed!)ation, %n) p!b"is$ing as (renti)e Ha""

Goods and *er+i)es

?utomobileComputer

*nstalled carpeting

Fastospital care

?d-ertising agency:in-estment management

Consulting ser-ice:teaching

Counseling

Percent of Product that is a Good Percent of Product that is a Ser-ice

..I %' '. "' . "' '. %' ..IJ J J J J J J J J


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%nd!str and *er+i)es as

(er)entage of GD(Services Manu$acturing

+ustralia

Canada

China

C*ech,ep

'rance

)ermany

-ong.ong

/apan

Me(ico

,ussian'ed

South+$rica

Spain

0.

0S

2 3

42 3

52 3

62 3

72 3

82 3

92 3

2 3

12 3

2 3

Copyright 2014 Pearson Canada Inc.


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122 ;

42 ;

62 ;

82 ;

2 ;

2 ;

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Documents

1. Introduction to OM Chapter 1