BSHM 161 CHAPTER 1-4

Operations management

is the administration of business activities to accomplish goals, achieve higher productivity, and maximize profitability.

Operations management

is the branch of management that administers the complete production timeline of a service/ product from the input stage to the finished stage, including planning, organizing, and supervising the operations, manufacturing and production processes, and service delivery to lead to the desired outcome of high-quality product/service that meets the demands of the customers.

Operations management (OM) 

is the administration of business practices to create the highest level of efficiency possible within an organization.

Adam Smith

Father of modern economics

Adam Smith

One of the first people to address the issues of operations management .

1776

In ___ Smith wrote "The Wealth of Nations," in which he described the division of labor.

The Wealth of Nations

In 1776 Smith wrote ”______” in which he described the division of labor.

Smith

According to ___, if workers divided their tasks, then they could produce their products more efficiently than if the same number of workers each built products from start to finish.

Frederick Winslow Taylor and Ford

During the industrial revolution, machinery allowed factories to grow in capacity and greatly increased their output. Despite this growth, there was considerable inefficiency in production. Two individuals helped to overcome these inefficiencies in the early 20th century.

Taylor

developed a scientific approach  (SCIENTIFIC MANAGEMENT) for operations management, collecting data about production, analyzing this data and using it to make improvements to operations.

Taylorism

A scientific approach  (SCIENTIFIC MANAGEMENT) for operations management, collecting data about production, analyzing this data and using it to make improvements to operations. 

also known as “___”

Scientific Analysis
Standardization

Worker Selection and Training

Performance Monitoring
Division of Labor

Core Principles of Taylorism

Operations management

is the heart of any organization.

Goods

-things we buy or use.

Services

Jobs people do to help other people

production

Creation of goods and services is called ____.

A good is an "______" if it is useful to people but scarce in relation to its demand so that human effort is required to obtain it.

economic good

free goods

______, such as air, are naturally in abundant supply and need no conscious effort to obtain them. 

SERVICES

are the non-physical, intangible parts of our economy, as opposed to goods, which we can touch or handle.

Services

_______, such as banking, education, medical treatment, and transportation make up the majority of the economies of the rich nations. They also represent most of the emerging nations’ economies.

Repair and Maintenance

Government

Food and Lodging

Transportation 

Education

Medical

Operations in the Service Sector

Inputs–Transformation–Outputs Model

Efficiency and Effectiveness

Decision Areas in OM

Strategic Role of OM

Key Concepts in Operations Management

Inputs

Raw materials, labor, equipment, information, capital.

Transformation process

Conversion of inputs into outputs (manufacturing, service delivery, logistics, etc.).

Outputs

Goods and services delivered to customers.

Efficiency

Doing things right (minimizing costs, time, and waste).

Effectiveness

Doing the right things (meeting customer expectations and quality).

Product design

Process design

Capacity planning

Quality management

Inventory management

Scheduling

Supply chain management

Decision Areas in OM

Product design

What to produce or offer.

Process design – How to produce it.

How to produce it

Capacity planning

How much to produce.

Quality management

Ensuring standards are met.

Inventory management

– Balancing stock to meet demand.

Scheduling

Planning operations and workforce.

Supply chain management

Coordinating suppliers and distributors.

Strategic Role of OM

Supports overall business strategy by improving productivity, lowering costs, ensuring quality, and enabling innovation.

Operation Manager

are responsible for ensuring the quality of their company's products and services meets or exceeds customer expectations

Operations Management

is the area of management concerned with designing, overseeing, and improving the processes involved in producing goods and services.  It ensures that business operations are efficient (using minimal resources) and effective (meeting customer requirements).

Operations Management

is about managing processes, people, and resources to produce goods and services effectively and efficiently.

Operations Management

in hotels and restaurants is about managing people, processes, and resources (like food, rooms, and staff) to deliver excellent guest experiences efficiently and effectively.

Importance of Operations Management

Customer satisfaction

Cost control
Competitive advantage

Sustainability

Customer satisfaction

– Delivering quality products/services on time

Cost control

– Reducing waste and improving productivity.

Competitive advantage

– Through efficiency, innovation, and speed.

Sustainability

– Using resources responsibly and reducing environmental impact.

Productivity

is commonly defined as a ratio between the output volume and the volume of inputs.

Productivity

it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output.

Productivity

is considered a key source of economic growth and competitiveness and, as such, is basic statistical information for many international comparisons and country performance assessments.

You

Team 

People/Client

To increase productivity there are 3 basic word you need to know:

Meaning

Energy

Triggers

Ability

To increase your productivity you need this things:

Work Environment

Training & Career Development Opportunities

Processes

Pay Structure

Employee Wellness

Diversity

Technology And Production Factors

Tools

Workplace Ergonomics

VARIABLES AFFECTING PRODUCTIVITY

Work Environment

As you can imagine, no one enjoys working in a negative or toxic environment. Make sure to create a workplace atmosphere that is based on your company's values, where your employees feel supported, valued, and safe.

honesty and cooperation

Put ____ and ________ first, remember to reward your employees when they deserve it.

Employee wellness

has become a popular topic over the past few years, and it refers to the physical and mental health of your team members.

Technology

has become an integral part of a modern working environment.

Workplace Ergonomics

- Apart from organizational factor, there are also other factors in the work environment that can decrease or increase productivity.

Temperature at the workplace

Air quality

Poor Lighting

Hydration

Office Space Layout and Design

Factors that may lead to low productivity include:

Globalization

refers to the process of integration across societies and economies.

Traders

_____ traveled vast distances in ancient times to buy commodities that were rare and expensive for sale in their homelands.

The Industrial Revolution

brought advances in transportation and communication in the 19th century that eased trade across borders.

Age of Exploration

when Europeans in the 1400s set sail across the Atlantic, looking for shorter spice routes to China and India. Many mark the voyages of Christopher Columbus and other sea-faring captains for opening up commercial trade routes across the world as the beginning of globalization

 global strategy

is a strategy that a company develops to expand into the global market. The purpose of developing _______ is to increase sales across the world.

global strategy

includes standardization, and international and multinational strategies.

Standardization

International

Multinational

TYPES OF GLOBAL STRATEGIES

standardization strategy

is characterized by keeping control centralized rather than delegating decisions to local markets.

international strategy

involves importing and exporting products. Using an international strategy can allow you to work with foreign suppliers and sell to customers around the world while keeping your physical premises within your home country.

multinational strategy

The key benefit of using a ______ is the ability to cater your business to individual locations.

multidomestic strategy

A firm using a __________  sacrifices efficiency in favor of emphasizing responsiveness to local requirements within each of its markets.

global strategy

A firm using a _______ sacrifices responsiveness to local requirements within each of its markets in favor of emphasizing efficiency.

transnational strategy

A firm using a __________ seeks a middle ground between a multidomestic strategy and a global strategy.

product strategy

is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so.

A product strategy provides clarity for your company.

It helps you prioritize your product roadmap.

A product strategy improves your team's tactical decisions.

Importance of Product Strategy

Goods and services

Quality Management

Process and Capacity Design

Location

Layout Design and Strategy

Human Resources and Job Design

Supply Chain Management

Inventory

Scheduling

Maintenance

10 Strategic operation management decision 

Forecasting

is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.

Business forecasting

consists of tools and techniques used to predict changes in business, such as sales, expenditures, profits and losses.

business forecasting

The goal of _______ is to develop better strategies based on these informed predictions; helping to eliminate potential failure or losses before they happen.

Financial and operational decisions

are made based on current market conditions and predictions on how the future looks.

Past data

is aggregated and analyzed to find patterns, used to predict future trends and changes. Forecasting allows your company to be proactive instead of reactive.

Helps set goals and plan

Helps budget

Helps anticipate changes within the market

3 ways forecasting can help the organization excel

1. Forecasts are rarely perfect.

2 Forecasts are more accurate for groups or families of items rather than for individual items.
3. Forecasts are more accurate for shorter than longer time horizons

PRINCIPLES OF FORECASTING

1. Determine the purpose of forecasting

2. Evaluate and Analyze your data

3. Select and Test Methods of forecasting

4. Yield Forecasting

5. Monitor the Accuracy of forecasting

STEPS IN FORECASTING PROCESS

QUALITATIVE FORECASTING

QUANTITATIVE FORECASTING

TYPES OF FORECASTING

Qualitative forecasting

is based on information that can’t be measured. It’s especially important when a company’s just starting out, since there’s a lack of past (historical) data. This forecasting technique is best for long-term forecasts, to forecast new business ventures and forecasts of margins.

relies on historical data that can be measured and manipulated. It is best for making short-term forecasts as past trends are more likely to reoccur in the near future than in the long term.

QUANTITATIVE FORECASTING

1. Straight Line Method

2. Moving Average

3. Simple Linear Regression

4. Multiple Linear Regression

FORECASTING METHODS

Straight-line method

is one of the simplest and easy-to-follow forecasting methods. A financial analyst uses historical figures and trends to predict future revenue growth.

Moving averages

are a smoothing technique that looks at the underlying pattern of a set of data to establish an estimate of future values. The most common types are the 3-month and 5-month moving averages.

Simple Linear Regression

Regression analysis is a widely used tool for analyzing the relationship between variables for prediction purposes. In this example, we will look at the relationship between radio ads and revenue by running a regression analysis on the two variables.

multiple linear regression

A company uses __________ to forecast revenues when two or more independent variables are required for a projection.

CPFR (collaborative planning, forecast and replenishment

is an approach which aims to enhance supply chain integration by supporting and assisting joint practices. _____ seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain.

Strategy and Planning
Demand and Supply Management

Execution

Analysis

4 PHASES OF CPFR IN SUPPLY CHAIN COLLABORATION

Strategy and Planning

This phase involves laying down the strategy for collaborative relationships between supply chain partners. The idea is that all organisations involved in partnership share an agreed scope of collaboration, common business goals. Roles, responsibilities and procedures are also set out in the strategy and planning phase.

Demand and Supply Management

This is the element which focuses on sales and order forecasting and the planning of orders.

Execution

This is the phase concerned with the processes of producing, stocking, dispatching, and delivery of materials to end-customers.

Analysis

This element comprises the management of exceptions in the fulfillment process, along with assessment of supply chain performance.

Forecasting

is an excellent example of an activity that is critical to the management of all functional areas within a company.

Marketing

relies heavily on forecasting tools to generate forecasts of demand and future sales.

Finance

uses the tools of forecasting to predict stock prices, financial performance, capital investment needs, and investment portfolio returns.