Welcome to the

Operations Management
Course… ☺

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 Fall 2022 – Class Logistics
◼ We will have in-class sessions at SolBridge (Sec 2 – 706; 13.00 hrs,
Tue/Thu)

◼ However, some students are not yet here in Korea and are sorting out their
travel / Quarantine / etc.
◼ SolBridge has extended a brief grace period of for such students and you may
attend the class online for those initial few days
◼ I will be happy to support you online

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For Students who are
currently online:
Once you join the meeting,
Please Enter your
Registration number followed
by your name in the chat
window (RegNo._Full name)
RegNo. – is your student number
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Syllabus & Textbook

Please go through your Syllabus

(LMS Course-Summary at the top of
the course page)

Pedagogy

Student Expectations

Course Evaluation Components

Textbook

Session Plan

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 Introduction to
Operations Management
These slides are only for the learning purposes of the
Operations Management course. Do not distribute these
slides. Slides are not a substitute for readings / textbook
and are only meant to complement the textbook and
readings.

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 Operations Management defined
◼ The management (Design, Operation and Improvement) of the
system that create & deliver the firm’s products & services

◼ Such a system is the production system

◼ Produces both products & services
◼ Involved in a process of Transformation of Inputs into Outputs using
some Resources
Few
Value added Examples??
Inputs Transformations
Land Transformation/ Outputs
Goods
Labor Conversion ◼ Physical
Services
Capital process
◼ Locational
Feedback
◼ Exchange

Control ◼ Storage
Feedback Feedback ◼ Physiological

◼ Informational

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 Success depends on…..

◼ Clever integration of a great

operations-related strategy

◼ Processes to deliver products

and services

◼ Analytics to support the

decisions needed to manage
the firm

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Operations & Supply Chain
Supply
Operations
Chain
Manufacturing and Processes that
service processes move information,
used to transform material and cash
resources into to and from the
products firm

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 Manufacturing Products Vs Delivering Services
Characteristic Manufacturing Service Characteristic Manufacturing Service

Output Tangible Intangible Measurement of productivity Easy Difficult

Customer contact Low High Opportunity to correct High Low

quality problems

Uniformity of input High Low Inventory High Low

Labor content Low High Evaluation Easier More

Difficult

Uniformity of output High Low Patentable Usually Not Usually

Farming Restaurant?? S/W Dvpmt??

Products??

Steel production Home remodeling Auto Repair Maid Service Teaching

Automobile fabrication Retail sales Appliance repair Manual car wash Surgery

High percentage goods Low percentage goods

Low percentage service High percentage service
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 Why Study Operations Management?
◼ Source of creating value to customers through
competitiveness (Effectiveness + Efficiency)

◼ Makes business education complete (holistic)

◼ Provides a systematic way of looking at

organizational processes

◼ Presents interesting career opportunities

◼ OM tools & concepts are used across functions of

an organization: Interface

Industrial
Engineering
Maintenance
Distribution

Purchasing Public
Operations Relations

Legal
Personnel

Accounting MIS 10
Operations vs. Sales Strategy
ABC Inc.
60% of sales $ in supply chain

Current gross profit = $10,000

Increase profits to $15,000 (50%)

CURRENT OPERATIONS SALES

SITUATION STRATEGY STRATEGY
Sales $100,000 $100,000 $125,000
Cost of materials $60,000 (60%) $55,000 (55%) $75,000 (60%)
Production costs $20,000 (20%) $20,000 (20%) $25,000 (20%)
Fixed costs $10,000 (10%) $10,000 (10%) $10,000 (8%)
Profit $10,000 (10%) $15,000 (15%) $15,000 (12%)
Efficiency, Effectiveness, and Value

◼ Efficiency - doing something at the lowest possible cost

◼ Effectiveness - doing the right things to create the most

value for the company

◼ Value - quality divided by price

◼ Quality - the attractiveness of the product,
considering its features and durability
How Does Wall Street Evaluate Efficiency?

◼ Earnings growth is largely a function of profitability

◼ Profits can be increased through higher sales or lower

cost

◼ Highly efficient firms usually do well during recessions

◼ Benchmarking - a process in which one company

studies the processes of another company (or industry)
to identify best practices
Management Efficiency Ratios
Dell Supply Chain-Early 2000s

Accounts Payable Cycle

~45 days – The credit time that
Dell has to pay its suppliers

Inventory Cycle - The

days sales of
inventory ~6 days

Accounts Receivable Cycle

~ 10 days in advance! 15
 Possible Careers in OSCM

Hospital Department store

Plant manager Branch manager
administrator manager

Call center Supply chain Purchasing Quality control

manager manager manager manager

Business
Lean
process Production
improvement Project manager
improvement control analyst
manager
analyst

Facilities Chief operating

manager officer

Watch the video: What do Operations Managers do? (Link on LMS week1)
 Current Issues & Trends in OM
◼ Effective consolidation of operations during
Mergers

◼ Developing flexible supply chains

◼ Managing global supply, production and
distribution networks
◼ Achieving the ‘Service Factory’
◼ Increasing market pressures for rapid new
product development
Enterprise (and Beyond) IT,
Internet, e-Commerce,
Globalization, Technology led
Miniaturization, Big-Data, Mobility,
Social Media, Cloud, Supply Chain
Focus, Outsourcing, Global
Standards & Norms, Sustainability

◼ Cost Reduction – low-cost country sourcing,

Services off-shoring

◼ Uncertain environment! – It has become the

norm
Watch videos on OM & Future trends –
LMS Week 1
◼ Value addition, Value addition, Value addition –
The Only Mantra!
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Thank you

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