306 CH 1
306 CH 1
306 CH 1
Operations Management
Operations Management
by
© 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
© Wiley 2005 3
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
© Wiley 2005 9
OM Decisions
© Wiley 2005 10
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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