Introduction to

Operations Management

1. Know the definition of operations management

2. Understand the history of OM
3. Understand the responsibilities of operations manager
4. Understand why we need to study OM Haunan Damar, S.S.T., MBA
Operations are all around us!
1. The best way to look at operations is to start looking around
you
2. Everything that you can see around a business has been
processed by an operation
3. Everything you consume today were produced by operation
4. Operations create everything you buy, sit on, wear, eat,
throw etc.
Operations is the set of activities within an organization that creates
value to customers toward their needs in the form of goods and
services by transforming inputs into outputs.

Operations

Inputs Transformation Outputs

Strategy Human Resource Finance Marketing

Significant
Events in OM
● Division of Labor (Smith 1776)
● Standardized parts (Whitney 1800)
● Scientific Management (Taylor 1881)
● Assembly Line (Ford 1913)
● Gantt Charts (Gantt 1916)
● Motion Study (Gilberth 1922)
● Digital Computer (Atanasoff 1938)
● Quality Control (Deming 1950)
● CPM/PERT (DuPont 1957)
● Material Requirement Planning (Orlicky
1960)
● Computer Aided Design (1970s)
● Flexible Manufacturing (1075)
● Baldrige Quality Awards (1980)
● Globalization (1992)
● Internet (1995)
● Mass Customization (2000s)
● Corona Virus (2019)
Operations Management

The activity of
managing the
resources which are
devoted to the
production and
delivery of products
and services.
Transforming resources…
● Facilities
● Staff
Customer
Manufacturing Operations
Inputs Transformation Process Outputs

Transformed resources…
Value-added
● Materials
● Information
 Responsibilities of Operations Management
● Planning ● Controlling
○ Capacity ○ Inventory
○ Location ○ Quality
○ Procurement of goods and services ○ Cost
○ Make or buy decisions ● Organization
○ Standardization
○ Layout
○ Subcontracting
○ Projects ○ Process selection
○ Scheduling ● Staffing
○ Market share ○ Hiring/layoff
○ Risk mitigation ○ Use of overtime
○ Plan B? ○ Incentive plans
○ Forecasting

“Matching the supply with demand”

Why study OM...
1. It is one of the major functions of any organization, Marketing, Finance, HR,
OM
2. Need to know how companies organize for productive enterprise
3. OM is such a costly part of an organization
4. To understand how goods and services are produced and organization
compete on products/services
5. to understand what operations managers do and how to improve the
productivity