RSM270 Lecture 1

Introduction and Overview

What is Operations Management?

The management of processes that create goods or provide services.

What would be the Input, Output, and Resources for Tesla vs Disney?

Tesla
Input: Metal, Tyres, Plastic, etc.
Output: Cars.
Resources: Engineers, Machines, etc.
Disney
Input: Customers in Need
Output: Customers satisfied
Resources: attractions

Explain the concept of Operation?

Operations are the processes by which inputs are transformed into outputs. They are done with the aim of creating value (more output than input) by employing feedback.

What is the goal of an Operation?

Create value - that is the sume of the outputs is greater than the sume of the inputs.

Differentiate between a Good and a Service?

Are all goods either goods or services?

No, they fall on the Service-Commodity Goods Continuum where they lie on or between a pure-service and pure-commodity good.

What is Product Service Bundling?

It is when a service offering is incorporated into the good commodity for its existing customers by a company.

Which of the following is True about Goods and Services?

They are both perishable

How do we measure Process Performance?

1. Efficiency: How well are inputs transformed into outputs? Deals with productivity. Is a given level output produced at min cost? Is a max level of produced at a given cost?

2. Effectiveness: Is the right thing being done to create the most value for customers? Is the stated objective being achieved?

What is Effieciency vs Effectiveness Matrix

How do we measure Effieciency? Define it.

Productivity. Output/(Input + Resources)

What are the three kinds of Productivity Measures?

1. Partial Measure of Productivity (PMP): Productivity in terms of a single factor, for example output per unit of labour.

2. Multi-factor Measures of Productivity (MFP): Productivity in terms of many factors, for example output per unit of labour and capital.

3. Total Factor Productivity (TFP): Productivity in terms of all factors, for example output per unit of labour, capital and other resources.

What are the four dimensions of Process Effectiveness/ Value Proposition?

1. Price - lower is better

2. Quality - higher is better

3. Delivery speed - higher is better

4. Flexbility (in volume and product mix) - more is better typically.

Can you attain all four elements of Process Effectiveness/ Value Proposition?

No, at max three are achievable because they all have trade-offs that make achieving the other elements harder.

What is good Operations Management?

Operating at the operations frontier

What is Operations Innovations?

Moving the Operations Frontier outwards

What are the two major decisions in Operations Management?

1. Tactical Decision: Ensuring the firm is on the Operations Frontier.

2. Strategic Decision: The firm is is on the right position on the Operations Frontier by offering the right elements of Process Effectiveness.

What are the two views of Process Success?

1. Efficiency View: Max output for given input. Min

2. Strategic View

What is the goal of a process?

To match demand and supply at the lowest cost.

What is successful Operations Management?

Matching suppy with demand effectively.

What are the Process in Operations Management (Textbook Ch1)

1. Planning: How to meet demand with the available resources?

2. Sourcing: Which suppliers do we select to deliver the goods/ services needed?

3. Making: How do we produce the goods/ service to be delivered?

4. Delivering: How do we move the produce to the coordinators/ customers?

5. Returning: Recieving worn-out/ deffective products

What is the Tripple Bottom Line? (Textbook Ch2)

Bottom Line that considers:

1. Economic Prosperity

2. Social Responsibility

3. Environmental Stewardship

What is the difference between Order Qualifiers and Order Winners? (Textbook Ch2)

Order Qualifiers: Basic dimensesions to even be considered for purchase

Order Winners: Specific Dimensions that differentiate a product and instigate purchase

What is Straddling? (Textbook Ch2)

When a firm tries to match a specfic dimension of a competitor while maintaining its existing position and competitive dimension mix. This is often a failure because the trade-offs lead to inconsistencies.