Operations Management (OM): Systematic design, direction, and control of processes transforming inputs into services/products.
Process: Activity that takes inputs, transforms them, and yields outputs.
Operation: Collection of resources, performing all or part of a process.
Supply-Chain Management (SCM): Synchronization of a firm’s processes with suppliers and customers to match flows with demand.
Supply Chain: Inter-related processes within and across firms that produce a service or product for customers.
Nested Process: Process existing within another process (useful for decomposing systems).
Cross-Functional Integration: Operations links with Marketing, Finance, HR, Accounting, MIS, etc.
Operations Manager’s Responsibilities: Convert materials/inputs into goods/services; design, run, and improve processes cost-effectively.
Universal Customer/Supplier Logic: Every person/process has internal/external customers and relies on internal/external suppliers.
Service vs. Manufacturing Continuum:
Manufacturing: Physical, durable output; inventoriable; low customer contact; long response time; capital intensive; quality easily measured.
Service: Intangible, perishable output; non-inventoriable; high customer contact; short response time; labor intensive; quality hard to measure.
Guiding Principle: Each activity should add value; eliminate waste/cost.
Core Process: Delivers value directly to external customers.
Linked Processes:
Supplier-Relationship Process
New Service/Product Development
Order-Fulfillment Process
Customer-Relationship Process
Support Processes
Common Supply-Chain Processes: Outsourcing, Warehousing, Sourcing, Customer Service, Logistics, Cross-docking.
Basic Formula: \text{Productivity} = \dfrac{\text{Value of Outputs}}{\text{Value of Inputs}}
Types: Labor productivity (single-factor), Multifactor productivity.
Managerial Role: Measure, analyze, and enhance productivity via process redesign, technology, training.
Covid-19 Aftermath: Remote work, supply shortages & disruptions, inflationary pressures.
Sustainability: Meeting present needs without compromising future generations (economic, environmental, social).
Humanitarian Logistics: Planning & control of flows to alleviate suffering.
Definition: Ongoing automation of traditional industry via smart technology.
Smart Technologies: Manufacturing (sensors, cyber-physical, real-time analytics), Product (embedded connectivity, self-diagnostics), Supply (integrated data, predictive logistics).
Base Technologies: Cloud, edge computing, 5G, big-data analytics.
Manufacturing Execution Systems (MES): Computerized systems tracking, documenting, and optimizing production.
Artificial Intelligence (AI): Machines that sense, comprehend, act, learn (e.g., machine learning, NLP).
Internet of Things (IoT): Networked objects with sensors/actuators collecting & sharing data (OM Uses: asset monitoring, predictive maintenance, smart inventory).
Additive Manufacturing (AM / 3-D Printing): Builds objects layer-by-layer (Operations Implications: mass customization, spare-parts on demand, decentralized production).
Process Innovation: Evaluate each activity for value-added contribution; redesign to eliminate waste.
Two Guiding Principles:
Every function must design & operate processes that participate in the supply chain while addressing quality, technology, and staffing.
Each function maintains its identity yet is inter-connected through shared processes.
Sustainability highlights ethical duty to future generations.
Industry 4.0 raises questions about workforce displacement; need for up-skilling.
Humanitarian logistics illustrates broader social responsibility of OM.
Basic Productivity: P = \dfrac{\text{Outputs}}{\text{Inputs}}
Labor Productivity: P_L = \dfrac{\text{Output Value}}{\text{Labor Hours}}
Multifactor Productivity: P_M = \dfrac{\text{Output Value}}{\sum \text{Resource Costs}}