operations management for competitive...

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Islamic University of Gaza - Palestine

Department of Industrial Engineering

Assistant Prof. Abed Schokry

Integrated Production Systems

First Semester 2011- 2012


Operations Management For CompetitiveAdvantage

CHASE AQUILANO JACOBS

McGraw Hill Higher Education, ninth edition

Generated by Foxit PDF Creator © Foxit Softwarehttp://www.foxitsoftware.com For evaluation only.

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Chapter 1

Introduction to Operations Management


Chapter 1: Learning Outcomes

• You should be able to:

– Define the term operations management

– Compare and contrast service and manufacturing operations

– Describe the operations function and the nature of the operations manager’s job

– Identify the two major aspects of process management

– Describe the key aspects of operations management decision making

– Briefly describe the historical evolution of operations management

– Identify current trends in business that impact operations management


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Overview: Introduction to the Field

• Operations Management

• Why Study Operations Management?

• Production System Defined

• Operations as a Service

• Plan of This Book

• Historical Development of OM

• Current Issues in OM


What is Operations Management?

Operations management (OM) is defined as the design,

operation, and improvement of the systems that create and

deliver the firm’s primary products and services.


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What is Operations Management? (Cont.)

What is operation?

– The part of a business organization that is responsible for producing goods or services

• How can we define operations management?

– The management of systems or processes that create goods and/or provide services


The Operations Function consists of all activities directly related to producing goods or providing services.

A primary function of the operations manager is to guide the system by decision making.

– System Design Decisions

– System Operation Decisions

Role of the Operations Manager


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Why Study Operations Management?

OperationsManagement

Business Education

Systematic Approachto Org. Processes

Career Opportunities

Cross-Functional Applications


What is a Production System?

A production system is defined as a user of resources to

transform inputs into some desired outputs.


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Transformations

• Physical--manufacturing

• Locational--transportation

• Exchange--retailing

• Storage--warehousing

• Physiological--health care

• Informational--telecommunications


Goods are physical items that include raw materials, parts, subassemblies, and final products.

• Automobile, Computer, Oven, Shampoo

Services are activities that provide some combination of time, location, form or psychological value.

• Air travel, Education, Haircut, Legal counsel

Good or Service?


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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?)


Core services are basic things that customers want from products they purchase.

Core Services Definition


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Core Services Performance Objectives


Flexibility

Quality

Speed

Price (or cost Reduction)


Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way.

Value-Added Services


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Value-Added Service Categories


Information

Problem Solving

Sales Support

Field Support


I. Operations Strategy and Managing Change

1. Introductionto OM

2. Operations Strategy and Competitiveness

3. Project Management

III. SupplyChain Design

8. Supply Chain Strategy

9. Strategic Capacity Management

10. Just-in-Time Outsourcing and Lean Systems

IV. Planning and Controlling the Supply Chain

11. Forecasting

12. AggregatePlanning

V. Revisingthe System

13. InventoryControl

14. Materials Requirements

Planning 16. Consulting and Reengineering

17. Synchronous Manufacturing & Theory of Constraints

II. Product Designand Process

Selection

4. UnderstandingProcesses

5. Manufacturing

Product &Process Des.

6. ServiceProducts and

Process Design

7. QualityManagement

Pla

n o

f T

his

Bo

ok


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Historical Development of OM

• JIT and TQC.

• Manufacturing Strategy Paradigm.

• Service Quality and Productivity.

• Total Quality Management and Quality Certification.


Historical Development of OM (cont’d)

• Business Process Reengineering.

• Supply Chain Management.

• Electronic Commerce.


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Current Issues in OM

• Effectively consolidating the operations resulting from mergers.

• Developing flexible supply chains to enable mass customization of products and services.

• Managing global supplier, production and distribution networks.

• Increased “commiditization” of suppliers.

• Achieving the “Service Factory”.

• Achieving good service from service firms.


Scope of Operations Management

MIS: Management Information System

HRM: Human Resources Management

QA: Quality Assurance


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Why Manufacturing Matters

• Over 18 million workers in manufacturing jobs

• Accounts for over 70% of value of U.S. exports

• Average full-time compensation about 20% higher than average for all workers

• Manufacturing workers more likely to have benefits

• Productivity growth in manufacturing in the last 5 years is more than double that of the U.S. economy


Why Study OM?

• Every aspect of business revolves around operations

• Many service jobs are closely related to operations– Financial services– Marketing services– Accounting services– Information services

• There is a significant amount of interaction and collaboration amongst the functional areas

• It provides an excellent vehicle for understanding the world in which we live


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Career Opportunities in OM

• Industrial engineer

• Operations manager

• Production manager

• Inventory manager

• Quality analyst and or Quality manager

• Production analyst

• And others


OM-Related Professional Societies in USA

• APICS - The Association for Operations Management

• American Society for Quality (ASQ)

• Institute for Supply Management (ISM)

• Institute for Operations Research and Management Science (INFORMS)

• The Production and Operations Management Society (POMS)

• The Project Management Institute (PMI)

• Council of Supply Chain Management Professionals (CSCMP)


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Decision Making

• Most operations decisions involve many alternatives that can have quite different impacts on costs or profits

• Typical operations decisions include:

– What: What resources are needed, and in what amounts?

– When: When will each resource be needed? When should the work

be scheduled? When should materials and other supplies be

ordered?

– Where: Where will the work be done?

– How: How will he product or service be designed? How will the

work be done? How will resources be allocated?

– Who: Who will do the work?


End of Chapter 1


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