Professional Documents
Culture Documents
GRADUATE SCHOOL
Prayer:
Let us pray…
Amen.
Energizer:
Banana Dance
Words of Wisdom:
At the end of the discussion fellow masterands should be able to understand the
following:
- Identify the three major areas of organizations and describe how they
interrelate,
- Describe the operations function and the nature of the operations manager’s
job,
management.
Chapter 1 Summary:
Introduction
production of goods or services. Goods are physical items and services are activities
you do for others in exchange of payment. Operations define the success or failure
scheme and analyzing investments. Marketing and operations are the primary, or
“line”, function. Marketing is responsible for assessing customers’ needs and wants,
selling and promoting the organization’s goods and services. Operations are
into outputs known as transformation process. In ensuring the quality of the product
feedbacks are used to compare previous product to the current whether corrective
Organization
Inputs:
Land Transformation Outputs:
Labor /Coversion Goods
Process
Capital Servies
Information
Figure 1.2 The operations function involves the conversion of inputs into outputs
Feedback
The essence of the operations function is to add value during the
Feedback Feedback
transformation. The value-added is the Control
difference between the cost of inputs and the
value or price of outputs. The value of the outputs are measured based on the
consumers capacity to buy or buying powers. Thus, money generated from the value
- Information
- Time
- Legal Constraints
- Government Regulations
Table 1.1 Examples of Inputs, Transformation, and Outputs.
Goods Services
Surgery, teaching
Figure 1.3
Songwriting, software development
Base on the figure the greater the customer is involve, the more challenging
Goods and services often work hand in hand but the two have basic
differences. Goods are tangible outputs-anything that we can see or touch, on the
Manufacturing and service are often different in terms of what is done but are
is act-oriented.
2. Capacity planning – ability to maintain the company cash flow and make
profit.
operation.
standardization.
teammates.
Types of Operations
1. Goods Producing
2. Storage/transportation
3. Exchange
4. Entertainment
5. Communication
and controlling, scheduling, project management and quality assurance. Tactical and
operational decisions and this is not possible without the operations manager who is
a vital stake in this system. System design determines the parameters of the whole
operation.
Operations functions:
equipment.
customer.
Operations Manager
services and has the chief role of planning and decision making. An operation
- When: when will each resource be needed? When should the work be
- How: how will the product or service be designed? How will the product be
a. Models
representation)
- Schematic models are more abstract than physical counterparts; that is, they
drawings)
- Mathematical models are the most abstract: they do not look like their real-
1. Are generally easy to use and less expensive than dealing directly with the
actual situation.
information.
b. Quantitative Approaches
- Linear programming
- Queuing techniques
- Inventory models
- Project models- PERT (Program Evaluation and Review Technique) and CPM
- Forecasting techniques
- Statistical models
c. Performance Metrics
All managers use metrics to manage and control the operations it includes; profit,
accuracy.
d. Analysis of Trade-offs
trade-off decision. This decision is taking considerations into the effect of each
factors affected.
e. System Approach
A system can be defined as a set of interrelated parts that must work together.
This emphasizes interrelationships among subsystems, but its main theme is that
Establishing Priorities
In reality managers discover certain factors are more important than others.
Recognizing this enables the managers to direct their efforts to what is to be done to
Pareto Phenomenon which means that all things are not equal; some things
(few) will be very important in achieving goals, objectives or solve problems, and
In making decisions, managers should consider how their decision will affect
environment. Managers sometime with best intentions makes mistakes and this is
the reason why managers should act responsibly and correct those mistakes quickly.
Operations managers, like all managers make ethical decisions and ethical issues
Product safety- products that minimizes the risk for injury to users and
environmental friendly.
The environment- not doing things that will harm the environment.
Closing facilities- taking account the impact to the community and honoring
commitments.
Worker’s rights- respecting the rights of employees and dealing with their
Environmental Concerns
processes that use resources in ways that it will not harm the ecological system that
support human existence, both present and future. Operations managers are central
50% or more of all jobs are in operations management or related fields. This
requires the operations manager to build and promote working together. Working
together will establish collaboration and will involve exchange of information and will
investments.
needs, and for communicating those to the operation people and to design people.
Marketing sill supply valuable information of what competitors are doing and through
this the operations will try to develop the products according to the preference of the
consumers. Operations can supply information about capacities and judge the
manufacturability of the designs. Marketing will also need the lead time which is the
time between ordering the product and receiving it. This will give the customer the
realistic time frames to estimate how long will their orders take.
decisions, and keeping each other informed with their strength and weaknesses.
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and overhead, and many reports on items such as scraps, downtime, and
inventories.
Systems for production have existed since ancient times. The Great Wall of
China, Ankor Wat, Borobudur, the palaces of Persepolis, and the roads of the Incan
empire provide existence of the human ability to organize for production. These
examples are classified as “public works” projects and the production as of the
modern sense are from modern factory system and had their roots in the industrial
revolution.
Industrial Revolution
Began in the 1770s in England and spread across Europe and to the United
States during the 19th century. Prior to this, goods were produced in small shops by
craftsmen and their apprentices. The system, it was common for one person to be
responsible for making a product. They were only using simple tools but during the
18th century, innovation changed the production system by using machines instead
Craft production which requires highly skilled workers use simple, flexible
tools to produce small quantities of customized goods. This was slow and production
cannot be done by volume. This was where factories began to spring when the
Scientific Management
In this era Frederick Winslow Taylor or known as the father of scientific
that will best identify the best thing to do. He believed that management is
responsible for planning, carefully selecting and training workers, finding the best
way to perform each job, achieving cooperation between management and workers,
and separating management activities from work activities. Thus, Taylor’s method
workers, and developed a widely used system for scheduling, called Gantt
Charts.
During the 20th century, automobiles were building using product or assembly
lines and this made a tremendous impact on production. Ford introduced mass
interchangeable parts, parts of a product made to such precision that they do not
have to be custom fitted and was attributed by Eli Whitney. Eli was an American
inventor who applied the concept of assembling musket in the late 1700s.
Ford also introduced the division of labor concept, which Adam Smith wrote
about in The Wealth of Nations (1776). This means that during the operation the
assembly line is divided into series of small tasks, and individual workers are
job design. Lillian Gilbreth who is a psychologist focused on the human factor in
work, has to do something with work fatigue, and soon focused on motivation. Elton
Mayo made a study on the relationship between physical and technical aspects of
work and found out that worker motivation affects the productivity. Abraham Maslow
Douglas McGregor added the Theory of X and Theory of Y, this theory looked into
two spectrums; life at work, and have to be controlled-rewarded and punished- to get
them good. These theories gave an impact to working commitments and empowered
employee cooperation.
who developed one of the first models in 1915: mathematical model for inventory
statistical procedures for sampling and quality control. In 1935, L.H.C. Tippett
quality procedures. These made them very competitive and in which their
Major Trends
and services.
product or service.
or opportunities.
Topic Objectives:
At the end of the discussion fellow masterands should be able to understand the
following:
- List the five reasons for the poor competitiveness of some companies,
- Define the term strategy and explain why it is important for competitiveness,
and to countries,
- And list some of the reasons for poor productivity and some ways of
improving.
Chapter 2 Summary:
relative to other organizations that offer similar products or services. Operations and
marketing have major impact on competitiveness. Strategy relates to the plans that
important in this regard. Productivity relates to the effective use of resources, and it
Competitiveness
How effectively an organization meets the needs and wants of the customers
consumers.
3. Advertising and promotion are ways the organizations can inform potential
customers.
product and service design, cost, location, quality, response time, flexibility, inventory
1. Product and service design- should reflect joint efforts of many areas of the
products.
technical support.
10. Managers and workers- people at the heart and soul of the organization.
2. Failing to take advantage of the strengths and opportunities, and /or failing to
4. Placing too much emphasis on product and service design and not enough on
Strategy
Mission and Goals- Mission is the reason for the organizations existence and
mission statement states the purpose of the organization. Goals provide the detail
Simple Example:
Mission
Strategy Formulation
Functional goals
To formulate an effective strategy, senior managers must take into account
“Manufacturing Strategy”, the order qualifiers which are characteristics that the
better than the competition. These characteristics include; price, delivery, reliability,
1. Economic Conditions-
2. Political Conditions
3. Legal Environment
4. Technology
5. Competition
6. Markets
1. Human Resources
3. Financial Resources
4. Customers
6. Technology
7. Suppliers
8. Others
formulated for the organizations advantage. The following questions bellow should
be addressed:
8. How will the organization differentiate its products and/or services from
competitors?
PIMS
business strategy. The data base consist of over 3, 000 profile of businesses.
Sustainability Strategy
corporate governance and sets goals for design and delivery of products and
services.
Global Strategy
As globalization has increased, many companies realized that strategic
companies face problems in what works in one country or region may not work in
another and this is why strategies should be carefully crafted taking considerations
Operations Strategy
that is used to guide the operations function. A narrow scope, dealing primarily with
to accomplish the tasks. Some reduction were achieved during; planning time,
product/service design time, processing time, changeover time, delivery time, and
Productivity
Output
Productivity = Input
Productivity has important implications for business organization like for non-
the increase in productivity from one period to the next relative to the productivity in
Computing Productivity
one input (multifactor productivity), or on all inputs (total productivity). The measure
Formula:
Number of motel rooms cleaned per worker = Number of motel rooms cleaned
Number of Workers