01 Intro To OM

1-OM Operations Management
The OM is the science and art of ensuring that goods and services are created and delivered successfully to customers .
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The conversion Process

Manufacturing organizations generally transform some tangible inputs into some tangible output Value-Added: The difference between the cost of inputs and the value or price of outputs.
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Scope of Operations Management
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2-Nature of Operations Management

Planning provides the basis for future activities by developing strategies ,goals,and objectives and establishing guidelines ,actions and schedules for meeting them . Organizing is the process of bringing together the resources people ,materials ,equipments ,technology information and capital necessary to perform planned activities . Directing is the process of turning plans into realities by assigning specific tasks and responsibilities to employees motivating them and co coordinating their effort . Controlling evaluating performances and applying corrective measures is necessary to ensure that plans are achieved .
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3- Goods and services

Goods are tangible Services are intangible Customers participate in many service processes ,activities and transactions Demand for services are more difficult to predict than the demand for goods . Services cannot be stored as physical inventory . Service management skills are paramount to a successful service encounter . Service facilities typically need to be in close proximity to the customer Patents do not protect services
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4-Customer Benefit Package

A customer benefit package is a clearly defined set of tangible (Goods content) and intangible (Service Content) features that the customer recognizes ,pays for uses or experiences . A primary good or service is the core offering that attracts customers and responds to their primary wants and needs . Peripheral goods or services are those that are not essential to the primary good or service ,but enhance it .
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5-Processes and value chains

Processes are the building blocks for the creation of goods and services . A Process is a sequence of activities that is intended to create a certain result such as a physical good or service or information . Support processes purchasing managing inventory ,customer support R&D General management processes HR/MIS,Finance/Controlling e.g. of process-- Sales order process ,Production order process A transformation process involves the creation of value in terms of time ,place ,information ,entertainment ,exchange or form utility .
Value chain
A value chain is a network of facilities and processes that describes the flow of goods and services, information and financial transactions from suppliers through the facilities and processes that create goods and services and delivers them to customers . Supply chain is the portion of value chain that focuses primarily on the physical movement of goods and materials and supporting flows of information and financial transactions through the supply ,production and distribution processes .
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6-Quantitative methods in Operations Management

Quantitative Tools Problem specific Line balancing ,facility Location and layout etc Quantitative tools are based on Models General Tools statistical methods and techniques .e.g. linear programming ,simulation, waiting line theory .. A model is basically a set of assumptions that characterize a decision situation and allow us to draw conclusions about the real situation through some type of analysis
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7--The Historical Evolution
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History
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History
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History
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8-Quality Revolution
Post 2nd world war Japan leaned heavily on W Edwards Deming and Joseph Juran Embraced Quality .By 1970 their products ruled the world . The Q R started in 1980 ;If Japan can why cant we ? Quality became an obsession . In 1987 US Govt established the Malcolm Baldridge National Quality Award .This Baldridge program has been instrumental in bringing quality to the attention of Top Management
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Using Models on OM
A model is a set assumptions that characterize a decision situation and allow us to draw a conclusion about the real situation through some type of analysis Using EXCEL we can develop and use a variety of models to assist us in making key OM decisions .we will learn how to develop and use models and interpret the results in OM .
An assumption in BEPV is that the costs and revenues are occurring simultaneously .Not true .Time is not a critical variable is an assumption .
What is a Model
A model can come in many shapes, sizes, and styles. It is important to emphasize that a model is not the real world but merely a human construct to help us better understand real world systems. In general all models have an information input, an information processor, and an output of expected results. Key features in common with the development of any model is that: simplifying assumptions must be made; boundary conditions or initial conditions must be identified; the range of applicability of the model should be understood.
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Quantitative decision tools

Costs and prices are constant over time not true Unit variable cost and unit prices do not vary .Not true quantity discounts are frequent. Facilities and capacity remains infinite Not true .As the output increases or decreases the firm may change technology requiring variable fixed costs . Models are extremely useful if properly applied .
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Goods and Services Characteristics
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Service Revolution
1955 .In US 50% of the work force was employed in service sector . Today it is 4 out of every 5 jobs are in Service sector . Moreover the 50% goods producing industries Jobs are service related /HR/FI etc Meaning if you are working in US You are most likely working in Service sector . However Manufacturing is not Dead .It is alive and kicking .
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The Challenges
Consumers . Workers Environment . Technology
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Organization Structure
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Scale of services vs. Product Dominance
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OM Strategic Decision Areas
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Conversion Process
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Functions within an Organization
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Customization and design

Quality means much more Lean production system Just in Time Agile Manufacturing
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GDP
GDP Rate of Growth Infrastructure Development . Service Sector Growth Shift of Manufacturing Industries Out Sourcing etc
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GDP $ 1.73 Trillions
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Operations strategy
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01 Intro To OM

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01 Intro To OM

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1-OM Operations Management

The conversion Process

Scope of Operations Management

2-Nature of Operations Management

3- Goods and services

4-Customer Benefit Package

5-Processes and value chains

6-Quantitative methods in Operations Management

7--The Historical Evolution

Quantitative decision tools

Goods and Services Characteristics

Scale of services vs. Product Dominance

OM Strategic Decision Areas

Functions within an Organization

Customization and design

GDP $ 1.73 Trillions

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