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306 CH 1

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Chapter 1 - Introduction to

Operations Management

Operations Management
by

R. Dan Reid & Nada R. Sanders


2nd Edition © Wiley 2005

PowerPoint Presentation by R.B. Clough - UNH

© Wiley 2005 1
What is Operations Management?
The business function responsible for
planning, coordinating, and
controlling the resources needed to
produce a company’s products and
services

© Wiley 2005 2
Typical Organization Chart

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Business Information Flow

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OM’s Transformation Role

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Productivity

Outputs
P
Inputs

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Differences between Manufacturers
and Service Operations
 Services:  Manufacturers:
 Intangible product  Tangible product
 Service cannot be  Product can be
inventoried inventoried
 High customer contact  Low customer contact
 Short response time  Longer response time
 Labor intensive  Capital intensive

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Service and Manufacturers
 All use technology
 Both have quality, productivity, & response
issues
 All must forecast demand
 Each will have capacity, layout, and location
issues
 All have customers and suppliers
 All have scheduling and staffing issues

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Trends in OM
 Service sector growing
to 80% of non-farm
jobs- See Figure 1-4
 Global operations
 Demands for higher
quality
 Huge technology
changes
 Time based competition

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OM Decisions

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Operations Management
Decisions
 Strategic:  Tactical:
 Product/Service  Quality Control
Design  Demand Forecasting
 Process Selection  Supply Chain
 Capacity Planning Management
 Facility Location  Production Planning
 Facility Layout  Inventory Control
 Job Design  Scheduling

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