Introduction

Prof. Christian Terwiesch

Christian Terwiesch .Operations in a Restaurant Prof.

Operations in an Emergency Room Prof. Christian Terwiesch .

Operations from the Perspective of the Customer Prof. Christian Terwiesch .

Defining a business strategy Prof.Four Dimensions of Performance Cost Quality ▪ Efficiency ▪ ▪ Product quality (how good?) Process quality (as good as promised?) Variety Time ▪ Customer heterogeneity ▪ Responsiveness to demand Important for .Performance measurement . Christian Terwiesch .

Four Dimensions of Performance: Measurements for a Sandwich Store Cost Quality ▪ Efficiency ▪ Product quality (how good?) ▪ Process quality (as good as promised?) Variety Time ▪ Customer heterogeneity ▪ Responsiveness to demand Prof. Christian Terwiesch .

Introduction Efficient Frontier Prof. Christian Terwiesch .

flow time Prof. Christian Terwiesch .customer lead time .flexibility / set-ups .number of options .make-to-order Responsiveness to demand Measured by: .cost per unit .utilization ▪ ▪ Product quality (how good?) => Price Process quality (as good as promised?) => Defect rate Variety Time ▪ ▪ Customer heterogeneity ▪ ▪ Measured by: .Four Dimensions of Performance: Trade-offs Cost Quality ▪ ▪ Efficiency Measured by: .

objective: 80% of incoming calls wait less than 20 seconds .Problem: staffing levels of call centers / impact on efficiency OM helps: Provides tools to support strategic trade-offs Prof. Christian Terwiesch .g. yet operators are almost fully utilized High labor productivity Labor Productivity (e.starting point: 30% of incoming calls wait less than 20 seconds . $/call) Example: Call center of a large retail bank . Comes at the expense of Frequent operator idle time Tradeoff Low Low labor productivity Long waiting times.What Can Ops Management (This Course) Do to Help? Step 1: Help Making Operational Trade-Offs Responsiveness High Very short waiting times.

Inconsistencies in activity network Prof. Christian Terwiesch .g.What Can Ops Management (This Course) Do to Help? Step 2: Overcome Inefficiencies Responsiveness High Current frontier In the industry Competitor A Eliminate inefficiencies Competitor C Low Low labor productivity Competitor B High labor productivity Labor Productivity (e. $/call) Example: • Benchmarking shows the pattern above • Don’t just manage the current system… Change it! Provides tools to identify and eliminate inefficiencies => Define Efficient Frontier Types of inefficiencies: -Poor process design .

Christian Terwiesch .What Can Ops Management (This Course) Do to Help? Step 3: Evaluate Proposed Redesigns/New Technologies Responsiveness High Redesign process New frontier Current frontier In the industry Low Low labor productivity High labor productivity Labor Productivity (e.g. $/call) Example: • What will happen if we develop / purchase technology X? • Better technologies are always (?) nice to have. but will they pay? OM helps: Evaluates system designs before they occur Prof.

Example: The US Airline Industry Prof. Christian Terwiesch .

Example: The US Airline Industry Prof. Christian Terwiesch .

Christian Terwiesch .Introduction Format of the course Prof.

5 weeks) 1. 10% each Final exam with questions from all modules. Quality Requirements / Prerequisites: There are no prerequisites for the course Some modules require statistical knowledge (standard deviation. Responsiveness 5. computers.5 weeks) 2. restaurants. banking. Productivity 3. Product variety 4.Course Outline / Grading / Homework Objective of the course: Understanding and improving business processes Performance measures How-to Mix of industries: healthcare. normal distribution) Homework assignments One large assignment after each module (five assignments). automotive. Christian Terwiesch . etc Course Outline Introduction (0. Process analysis (1. call centers. 50% Prof.

Christian Terwiesch. Gerard.McGraw Hill. 2012 (ISBN 978-0073525204.Text Book Course book Cachon. Irwin . 3rd edition. Christian Terwiesch . Matching Supply with Demand: An Introduction to Operations Management. 507 pages) Prof.

Christian Terwiesch . Heller Professor at the Wharton School Senior Fellow Leonard Davis Institute for Health Economics 573 Jon M.Personal Introduction MBA core course: Operations Management: Quality and Productivity Taught ~ 60 times ~ 4000 MBA students McKinsey Ops Practice ~ 500 new associates Research: Operations Management. PA 19104. focus on Healthcare Management Innovation tournaments and contests Christian Terwiesch terwiesch@wharton.6366 Prof.upenn.edu Andrew M. Huntsman Hall Philadelphia.

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