Ch 1 introduction to Operations Management and Supply Chain

operations management

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

supply chain

a sequence of activities and organizations involving in producing and delivering a good or service

full sequence:

1. suppliers’ suppliers

2. direct suppliers

3. producer

4. distributor

5. final customers

transformation process

inputs are converted to outputs

1. INPUT: land, labor, capital, info

2. VALUE ADDED: transformation/conversion process

3. OUTPUT: goods, services

4. CONTROL

Feedback

measurements taken at avarious points in the transformation process

Control

the comparison of feedback against previously established standards to determine if corrective action is needed

value added

difference between the cost of inputs and the value of outputs

goods

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

services

activties that provide some combination of time, location, form or psychological value

products are typically…

NEITHER PURELY service or PURELY goods-based

The Operations Manager’s Role

System Design Decisions

• strategic, long-term

• capacity

• facility location

• layout

• product/service planning

• equipment acquisition

The Operations Manager’s Role

System Operation Decisions

• tactical/day-to-day

• personnel

• inventory

• scheduling

• project management

• quality assurance

5 decision areas of a Operations Manager’s Role…

1. What: what resources are needed, and in what amounts?

2. When: when will each resource be needed?

3. Where: where will the work be done?

4. How: how will the product or service be designed?

5. Who: who will do the work?

Models & Decision Making:

types of models

1. physical: miniature

2. schematic: map/blueprint

3. mathematical: optimization

Models & Decision Making:

benefits of models

• easier and cheaper than the real system

• enable what-if analysis

• standardize evaluation

trade-offs

definition: giving up one thing in return for something else

analysis: carrying more inventory = higher service but higher cost

3 major organization functions:

1. marketing

2. operations

3. finance

organization function OVERLAP:

• finance and operations:

  • budgeting

  • economic analysis of investment proposals

  • provision of funds

• marketing and operations:

  • demand data

  • product and service design

  • competitor analysis