Ch 1 introduction to OM

what is operations management

• a core business function of every company

• it’s role is to transform organizational inputs into outputs

• responsible for planning, coordinating, controling the resources needed to rpoduce a company’s goods and services

efficient operations management allows a company to perform …

better, cheaper, faster → competitiuve advantage

types of organizations : manufacturing

• tangible products (produced and stored in invetory)

• low customer contact and longer response times

• capital-intensive

types of organizations : services

• intangible products (cannot be produced ahead of time)

• high customer contact and short response time

• labor-intensive

quasimanufacturing organizations

companies may have charachteristics of both manufacturing and service organizations

eg US post service (intangible product of speedy, reliable delivery of letters, documents and packages, yet low customer-contact, large inventory, capital intensive facilities and fleet

operations maganement decisions : strategic decisions

• broad in scope

• long term in nature

• all-encompassing

operations management decisions : tactical decisions

• narrow in scope

• short term in nature

• concerning a small group of issues

hostorical milestones

• products used to be unique and created by hand by skilled craftspeople

• industrial revolution

• scientific management (taylorisme)

• human relations management

• management science

hostorical milestones : industrial revolution

• james watt (176) : steam engine → from human to machine power

• adam smith (1776) : division of labor → specialization

• eli whitney (1790) : interchangeable parts → standardization

hostorical milestones : scientific management (taylorisme)

• frederick Taylor (1900) : salary-contigent performance standards based on scientific tme study

• Henry ford (1913) : moving assembly line → mass production

hostorical milestones : human relations management

• hawthorne effect (1930) : productivity increases if worker are given attention

hostorical milestones : human relations management : factors other than money contribute to productivity

• job enlargement ; doing a larger portion of the total task

• job enrichment : having greater control in the planning

hostorical milestones : management science

• quantitative decision making tools (inventory models, forecasting models..)

• developed to support military logitsics during world war two

• commercialized in the 1970s with the introduction of computers in businesess

computer age

enable processing of large amounts of data and allowed widespread use of quantitative procedures

environmental issues

considered waste reduction, the need for recycling, and product reuse

ISO 14000 certification

Trends in Om zince 1960-1970

computer age

environmental issues

Treends in OM since 1980s :

• just in time systems

• total quality management

• reengineering

• global competition

Treends in OM since 1980s : just in time systems

designed to achieve high-volume production with minimal inventories through elimination of waste and continuous process improvement

Trends in OM since 1980s : total quality management

sought to eliminate cause of production defects and making quality a responsibility of everyone ISO 9000

Treends in OM since 1980s : reengineering

required redesigning a company’s processess in order to provide greater efficiency and cost reduction

Treends in OM since 1980s : global competition

designed operations to compete in global market

Trends in OM since 1990s :

flexibility

time- based competition

supply chain management

Trends in OM since 1990s : flexibility

offered customization on a mass scale

Trends in OM since 1990s : time based competition

based on time, such as speed of delivery

Trends in OM since 1990s : supply chain management

focused on reducing the overall cost of the system that manages the flow of materials and information from suppliers to final customers

Trends in OM zince 2000s :

• electronic commerce

• outsourcing and flattening the world

Trends in OM since 2000s : electronic commerce

uses the internet and wold wide web for conducting business activity

Trends in OM zince 2000s : outsourcing and flattening the world

convergence of technologies that enable outsourcing of virtually any job imaginable from anywhere around th globe

Trends in OM since 2010s

artificial intelligence, machine learning, analytics

Trends in OM since 2010s : artificial intelligence, machine learning, and analytics

applies math and statistics to large volumes of structured and unstructured data to gain unprecedented business insights

computer systems are able to perform tasks that normally require human intelliigence