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Seminar
On
Operations
Management

Submitted To: Submitted By:

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 Operations Management
 Operations Management Concepts
 The Basics Of Operations Management
 Models
 Differences Between Services and Goods
 Basic Functions of the Business Organization
 Business Functions are Interconnected
 Historical Evolution of OM
 Refernces
 What is operations?
◦ The part of a business organization that is
responsible for producing goods or services

 What is operations management?

◦ The management of systems or processes that
create goods and/or provide services

 Operations management affects:

◦ Companies’ ability to compete

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◦ Refers to the management of the production system
that transforms inputs into finished goods and
services.
 Production system: the way a firm acquires inputs then
converts and disposes outputs.
 Operations managers: responsible for the
transformation process from inputs to outputs.
◦ Operations management seeks to increase the
quality, efficiency, and responsiveness of the firm.
 Seeks to provide a competitive advantage.
◦ Quality: goods and services that are reliable and
perform correctly.
 Quality allows customers to receive the performance that
they expect.
◦ Efficiency: the amount of input to produce a given
output.
 Less input required lowers cost and waste.
◦ Responsiveness to customers: actions taken to
respond to customer needs.
 Firm can react quickly and correctly to customer needs
as they arise.
 Operations Management
◦ The process of managing the resources that are
needed to produce an organization’s goods and
services.
◦ Operations managers focus on managing the “five
Ps” of the firm’s operations:
 People, plants, parts, processes, and planning and
control systems.

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 Types of Models:
◦ Physical Models
 Look like their real-life counterparts
◦ Schematic Models
 Look less like their real-life counterparts than physical
models
◦ Mathematical Models
 Do not look at all like their real-life counterparts

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 Information Asymmetry
 Intangible
 Inventory
 Customer Contact
 Response Time
 Labor Intensity
 Organization

Finance Operations Marketing

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 Operations

Finance Marketing

MIS 373: Basic Operations Management 10

 Industrial Revolution
 Scientific Management
 Human Relations Movement
 Decision Models and Management Science
 Influence of Japanese Manufacturers

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 Pre-Industrial Revolution
◦ Craft production - System in which highly skilled workers use
simple, flexible tools to produce small quantities of customized
goods
 Some key elements of the industrial revolution
◦ Began in England in the 1770s
◦ Division of labor - Adam Smith, 1776
◦ Application of the “rotative” steam engine, 1780s
◦ Cotton Gin and Interchangeable parts - Eli Whitney, 1792
 Management theory and practice did not advance
appreciably during this period

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 Movement was led by efficiency engineer,
Frederick Winslow Taylor
◦ Believed in a “science of management” based on
observation, measurement, analysis and improvement of
work methods, and economic incentives
◦ Management is responsible for planning, carefully
selecting and training workers, finding the best way to
perform each job, achieving cooperate between
management and workers, and separating management
activities from work activities
◦ Emphasis was on maximizing output

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 Frank Gilbreth - father of motion studies
 Henry Gantt - developed the Gantt chart
scheduling system and recognized the value of
non-monetary rewards for motivating employees
 Harrington Emerson - applied Taylor’s ideas to
organization structure
 Henry Ford - employed scientific management
techniques to his factories
 Moving assembly line
 Mass production

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 The human relations movement emphasized the
importance of the human element in job design
◦ Lillian Gilbreth
◦ Elton Mayo – Hawthorne studies on worker motivation,
1930
◦ Abraham Maslow – motivation theory, 1940s; hierarchy
of needs, 1954
◦ Frederick Hertzberg – Two Factor Theory, 1959
◦ Douglas McGregor – Theory X and Theory Y, 1960s
◦ William Ouchi – Theory Z, 1981

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 F.W. Harris – mathematical model for inventory management,
1915
 Dodge, Romig, and Shewart – statistical procedures for
sampling and quality control, 1930s
 Tippett – statistical sampling theory, 1935
 Operations Research (OR) Groups – OR applications in warfare
 George Dantzig – linear programming, 1947

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 Refined and developed management practices that
increased productivity
◦ Credited with fueling the “quality revolution
◦ Just-in-Time production

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