Operations Management

Course # MGT 5504

Faculty
Md. Motaharul Islam Assistant Professor (Mgt.)
Bangladesh Open University Cell-01711066605 E-mail: motaharul2002@yahoo.com

Lecture-1 Introduction to Operations Mgt.

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Objectives
To understand wide ranges of Ops Mgt decisions and its interrelationships with other functions of the business. To identify various Ops strategies.  To understand design aspect of business.  To enhance knowledge on resource mgt both in manufacturing & Services
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Recommended Books
Operations Management, 11th edition by Davis, Chase, Aquilanos Principle of Ops Mgt, 3rd Edition by Jay Heizer and Barry Render

Introduction to OM:CH-1
OM is a function related to design, operations and improvement of productions system that create primary products or services.
Operations Management Management of the conversion process which transforms inputs such as raw material and labor into outputs in the form of finished goods and services.

This function is essential to systems producing goods and services in both profit and non-profit organization.

Production is the creation of goods and services.

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A conceptual model on Operations and Technical Management System

A production system consist of :(figure below) Inputs
Workers Managers Equipt Facilities Materials Services Land Energy
Information on performance
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External Environment (Markets)

Customer or Client Participation

Technical Management (Process) 1-----2-------3-------4-----5

Outputs Goods Services

Conceptual Model (Cont...)

Process is an activity or group of activities that transforms inputs into the finished goods or services. Examples for Factory, airlines, schools, hospital........ Managers must understand the fundamentals of the Operations because Each section of organization has it own identity and is connected with operations. Each section has to deal with the transformation process, quality, technology and staffing issues.
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Need and importance of OM OM is the one of the three basic functions. (marketing, finance and operation/production OM guides how best way the goods and services can be produced. What are the duties and responsibilities of operations managers. Managers must give emphasis on OM as it is the most costly part of the organization.
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What types of decisions are involved in managing operations?

Quality Management Services and product Design Process and Capacity Design Location Layout Design
Who is responsible for quality? How do you do we define the quality? What product or service should we offer? How to design those? What process will these product require and in what order? Where should we put the facility? How should we arrange the facility? How large would be the facility?

Human Resources and How do we provide good environment? How much can we Job design
expect to produce?
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Operations Decisions (continue...)

Supply-Chain Management Inventory Management
Should we make or buy this component? Who are our good suppliers and how many should we have? How much inventory should we have? When do we re-order?

Is subcontracting productions a good Project Scheduling idea? Are we better off keeping people on the payroll during slowdowns?

Maintenance

Who is responsible for maintenance?

How does operations differ from other functions?

Types of Organizations Manufacturing Constructions Transportation Healthcare Wholesaling Retailing Bank Government Functions required
Accounting Distributions Engineering Operations Finance Human Resources Marketing

Skills Areas
Quantitative method Organizational Behavior General Management Information System Economics International Business Business Ethics and Law

OM as a Functions

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Differences between Manufacturing and Services More like a Manufacturing Organization More like a Service Organization

Physical, durable product Intangible, perishable

Output can be inventoried Output can be inventoried High customer contact Short response time Local markets Small facilities Labor intensive Quality not easily measured
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Low customer contact Long response time Regional, national or international markets Large facilities Capital intensive Quality easily measured

Similarities between Manufacturing and Services

Manufacturers just do not offer the products but provides warranty as services. Service providers can not inventoried outputs but they must inventory the inputs. Every one in the organization have some customer contact, directly or indirectly both in manufacturing and service organization.
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Most goods contain a service and most services contain a good

100%Goods
Automobiles Computers Fast-Food Meals Restaurant Meal Auto Repair Hospital care Advertising Agency Investment management Counseling services/teaching Counseling

0%

Services 100%

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Trends in Operations Management

The growth of the services sectors Productivity Changes Global competitiveness Quality Time Technological Changes Environmental, Ethical and diversity issues
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Current Issues in OM
Coordinate the relationships between mutually supportive but separate organizations. Optimizing global supplier, production, and distribution networks. Increased co-production of goods and services Managing the customers experience during the service encounter Raising the awareness of operations as a significant competitive weapon
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