Transcript Lecture 01.ppt
OPERATIONS MANAGEMENT
MGT 460
Self Introduction
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Dr. Arshad Zaheer
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Education:
PhD, MS(Engineering Management), MS (E-Commerce), MBA
Reviewer of International Journals Ph.D/M.Phil Supervisor/External Reviewer Publications in International journals Books//Monographs Articles in Edited Books
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Self Introduction
Dr. Arshad Zaheer
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National and International Conferences Workshops Administrative Experience Teaching Experience Areas of Interest Research Software Expertise
(SPSS, AMOS, VPLS)
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Course Outline
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Introduction to Operations Management Productivity Measurement Competitiveness and Strategy Managing Quality Linear Programming Transportation Models Assignment Methods Forecasting Project Management
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Course Outline
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Decision Making Tools Learning Curves Inventory Management Operations Strategy in a Global Environment Location Strategies Layout Strategies Supply Chain Management Human Resources and Job Design
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Course Objectives
• Learning operational management techniques that could be applied to real world problems • understand the strategic role of operations management in creating and enhancing a firm’s competitive advantages • understand key concepts and issues of OM in both manufacturing and service organizations • apply analytical skills and problem-solving tools to the analysis of the operations problems • letting students apply the relevant management technique to the correct situation operations • letting students understand operational management results and draw the correct conclusion from them
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Reference Material
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Operation Management by Jay Heizer, Barry Render and Jagadeesh Rajashekhar
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Operations Research: An Introduction by Hamdy A. Taha
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Operations Management by William J. Stevenson
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Online search
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Course Plan and Requirements
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Lectures Assignments Quizzes Sessional Marks Distribution
Lecture 1 Introduction to Operations Management Dr. Arshad Zaheer
Lecture Outline
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Management Operations Value-Added Operations Interfaces Definition of Operations Management Nomenclature Goods and Services Responsibilities of Operations Manager New Trends in OM
Management What is Management?
Management is the scientific study concerning the different activities (like POSDCORB) in order to maximize profit, minimizing cost and to optimize productivity
Operations What is ‘Operations’?
‘Operations’ consists of activities related to the production of goods and services. ‘Goods Oriented Operations’ consists of manufacturing and assembly operations ‘Service Oriented Operations’ consists of, health care, transportation, Education, retailing etc.
Operations as core function ‘Operations’ function is the core of most business organizations Inputs are converted to Valuable outputs after transformation process
Value-Added The difference between the cost of inputs and the value or price of outputs.
Inputs Land Labor Capital Feedback Value added Transformation/ Conversion process Feedback Control Outputs Goods Services Feedback
Food Processor Inputs Raw Vegetables Metal Sheets Water Energy Labor Building Equipment Processing Outputs Cleaning Making cans Cutting Cooking Packing Labeling Canned vegetables
Inputs Hospital Process Processing Outputs Doctors, nurses Examination Healthy Hospital Surgery patients Medical Supplies Monitoring Equipment Laboratories Medication Therapy
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Why Organizations need Operations Manager An operations Manager controls the processes by which value is added from conversion of inputs to outputs.
Production and Operations Management Production is the creation of goods and services Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs
What Is Operations Management?
The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing
Organizing to Produce Goods and Services
Essential functions:
Finance/accounting – allocation of resources, investment decisions, tracks how well the organization is doing, pays bills, collects the money
Marketing – Front line activity, generates demand Production/operations – creates the product
Distribution Operations Interfaces Industrial Engineering Maintenance MIS Public Relations Operations Purchasing Accounting Personnel
What Is Operations Management?
Operations management (OM) is the area of management which is concerned with administration of business practices especially overseeing, designing and controlling the process of production set of activities that creates value in the form of goods and services by transforming inputs into outputs with maximum level of efficiency ensuring profitability for the organization
Nomenclature
• Production Management • Production and Operations Management (POMA) • Operations Management • Operations Research (Interdisciplinary Subject) • Grey Areas
Operations Research Operations research is the development and collection of techniques based on mathematics and other scientific approaches that finds solutions to your problems.
Difference between Operations Management and Research 1. OR relies on mathematical modeling and OM relies on practical scenarios/industrial cases.
2. OR is domain and tool of Engineers while OM is considered to be one of the critical tools of Managers.
Why Study OM?
OM is one of three major functions (marketing, finance, and operations) of any organization
We want ( and need ) to know how goods and services are produced
We want to understand what operations managers do
OM is such a costly part of an organization
What Operations Managers Do Basic Management Functions
Planning
Organizing
Staffing
Leading
Controlling
Responsibilities of Operations Management Planning – Capacity – – – – – – Location Products & services Make or buy Layout Projects Controlling – – Scheduling Inventory Quality Organizing – Degree of centralization – Staffing – – Subcontracting Hiring/laying off – Use of Overtime Directing Incentive plans – – Issuance of work orders Job assignments
The Critical Decisions
Design of goods and services
What good or service should we offer?
How should we design these products and services?
Managing quality
How do we define quality?
Who is responsible for quality?
Table 1.2 (cont.)
The Critical Decisions
Process and capacity design
What process and what capacity will these products require?
What equipment and technology is necessary for these processes?
Location strategy
Where should we put the facility?
On what criteria should we base the location decision?
Table 1.2 (cont.)
The Critical Decisions
Layout strategy
How should we arrange the facility?
How large must the facility be to meet our plan?
Human resources and job design
How do we provide a reasonable work environment?
How much can we expect our employees to produce?
Table 1.2 (cont.)
The Critical Decisions
Supply chain management
Should we make or buy this component?
Who are our suppliers and who can integrate into our e-commerce program?
Inventory, material requirements planning, and JIT
How much inventory of each item should we have?
When do we re-order?
Table 1.2 (cont.)
The Critical Decisions
Intermediate and short –term scheduling
Are we better off keeping people on the payroll during slowdowns?
Which jobs do we perform next?
Maintenance
Who is responsible for maintenance?
When do we do maintenance?
Table 1.2 (cont.)
New Challenges in OM From
Local or national focus
Batch shipments
Low bid purchasing
Lengthy product development
Standard products
Job specialization To
Global focus Just-in-time Supply chain partnering
Mass customization
Rapid product development, alliances Empowered employees, teams
Characteristics of Goods
Tangible product
Consistent product definition
Production usually separate from consumption
Can be inventoried
Low customer interaction
Service Definitions
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Services are deeds, processes or performances.
OR
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A service is a time-perishable, intangible experience performed for a customer acting in the role of a co producer
Characteristics of Service
Intangible product
Produced and consumed at same time
Often unique
High customer interaction
Inconsistent product definition
Often knowledge-based
Frequently dispersed
Goods-service continuum Steel production Automobile fabrication Low service content High goods content House building Road construction Dressmaking Farming Increasing goods content Increasing service content Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing High service content Low goods content
Ethics and Social Responsibility Challenges facing operations managers:
Developing and producing safe, quality products
Maintaining a clean environment
Providing a safe workplace
Honouring community commitments