Operations

Management
1 BMGT
25
 History of
2
Operations
Management
 1. The Industrial Revolution – started
31770’s
• development of a number of
inventions (to machine power instead
of human power)
• Important invention for this period was
the steam engine.
• The concept of division of labor was
introduce in this time.
 2. Scientific management – an approach
4 to management promoted by
Frederic k W. Taylor (Started at 20th
century)
 Two features of this c oncept
1. it assumed that workers are motivated
only by money and are limited only by
their physica l ability
2. the approach was the separation of
the planning and doing functions in a
company, which meant the separation
of management and labor.
 Hawthorne studies - The study
5 responsible for creating the human
relations movement, which focused on
giving more consideration to workers’
needs.
•The purpose was to study the effects
of environmental changes, such as
changes in lighting and room
temperature, on the productivity of
assembly-line workers.
6
3. Human relations movement, an
entirely new philosophy based on the
recognition that factors other than
money can contribute to worker
productivity.
• Job enlargement is an approach in
which workers are given a larger
portion of the total task to do.
• Job enrichment, in which workers are
given a greater role in planning.
 4. Management science – (developed
7
by F.W. Harris in 1913). A field of study
that focuses on the
development of quantitative
techniques to solve
operations problems.
5.The Computer Age. (1970s the use
of computers in business)
• data proc essing bec ame easier
• development of material
requirements planning (MRP)
 6. Just-in-time (JIT) –
8
(developed
• 1980’s)
A philosophy designed to
achieve high-volume
production through
elimination of waste and
continuous improvement.

• designed to achieve high-volume

production using minimal amounts
of inventory.
 7. Total Quality Management
9
(TQM)
1980’s
- refers to a quality emphasis
that encompasses the entire
organization,
from supplier to customer.
• seeks to improve quality
by eliminating causes of produc
defects and by making qualityt the
responsibility of in
everyone organization. the
• ISO 9000 certification
1 8. Business process
0 reengineering
- redesigning
to increase
a company’s
efficiency,
processes improve quality, and
reduce costs.

•Reengineering requires asking why

things are done in a certain way,
questioning assumptions, and then
redesigning the processes.
 9. Flexibility - An organizational strategy
1
1 in which the company attempts to
offer a greater variety of product
choices to its
customers.
• example of flexibility is mass customization
- the ability of a firm to produce highly
customized goods and services and to do
it at the high volumes of mass production.

- postponement - keeping the product in

generic form as long as possible and
postponing completion of the product until
specific customer preferences are known.
1
2
10. Time-based competition -
An organizational strategy
focusing on efforts to develop
new products and deliver them
to customers faster than
competitors.
• Time-based competition requires
specifically designing the operations
function for speed.
 11. Supply chain management
1
3
(SCM) 1990’s - involves
managing the flow of
materials and information
from suppliers and buyers of
raw materials all the way to
the final
• It Is c onsists multipl
firms/organizations and customer.
e of
departments to leverage strategic
collaborating
positioning and to improve operating
efficiency.
 12.Electronic commerce (e-commerce) -
1 is the use of the Internet for
4
conducting
business activities, such
as communica tion,and business
data
transa ctions, transfer.
• Business-to-business (B2B) -
• Business-to-customers -
Elec tronic c ommerce between businesses.
(B2C)
commerce between businessesElec
and
tronic
their
customers. exchange, as engaged in by on-
line retailers suc h as Amazon.com
• Customer-to-customer -
c ommerce between
(C2C) Elec tro
customers.
c onsumer auction sites suc h as nic as
eBay. on
 13. Outsourcing and Flattening of
1
5
the World - Outsourcing is
obtaining goods or services
from an outside
provider.
• Outsourcing has been touted as
the
enabling fac tor helps
that companies
achieve the speed needed
and flexibility to be
competitive.
1
What is
6
Operations?
1. The best way to start understanding
the nature of operations is to look
around you
2. Everything you see around you (except
the flesh and blood) has been
processed by an operation
3. Every service you consumed today
(TV station, transportation, lecture,
etc.) has also been produced by an
operation
4. Operations Manager create
everything you buy, sit on, wear,
 Operations Management
1
7
🠶 is the business function that plans, organizes, coordinates,
and controls the resources needed to produce a
company’s goods and services
🠶 Refers to the systematic design, direction, and control
of processes that transform inputs into services and
products for internal, as well as external customers.
 Operation
1 • as a function, meaning the part of
8
the organization which produces
the products and services for the
organization’s external
• as
customers;
an activity, meaning the
management of the processes
within any of the organization’s
functions.

Production
 is the c reation of goods
and services
1 “operations” ca n take many
9 different forms. The transformation
process can be:
• physical, as in manufacturing
operations;
• locational, as in transportation or
warehouse operations;
• exchange, as in retail operations;
• physiologic al, as in health c are;
• psychologica l, as in entertainment;
or
• informational, as in
communication.
  Goods – are physical items
2
0 of raw
inclusive materials,
subassemblies, such as the engine
parts,
system used in car, and final
products such as computers and
machineries.

 Services - are ac tivities that

provide a combination of time,
location, form, and psychological
value.
 Function of Business Organization
2 Operations as the Technical
1
Core
 Why Study
2
2 OM? We study OM for four
reasons:
1.we study how people
organize themselves for productive
enterprise .

2. We study OM because we want to

know
how goods and services are produced .

3.We study OM to understand

what operations managers .

4.We study OM because it is such a

 What Do Operations (Supply
2 Chain) Managers Do?
3
• Operations are the
managers
improvement people, the realistic, hard-
nosed, make-it-work, get-it-done people;
the planners, coordinators, and
negotiators.

Tasks perform:
1.decision support,
2.process improvement, and
3.organizational performance.
 Managers focused on:
24
1. continuous quality improvement
projects;
2. analyzes methods and
systems for managing
information.;
3. staffing patterns and workflow
for computerized scheduling
systems;
4. consolidating policies, procedures
and practices;
5. developing and implementing
balanced scorecards and
benchmarking reports;
6. designing new process for
2
5 Two Broad Categories
of
Organizations:
1. manufacturing
organizations and
2. service organizations
 Two Primary distinctions
2
6 between these categories.

1. First, manufacturing organizations

produce physical, tangible goods that
c an be stored in inventory before they
are needed.
• By contrast, service organizations
produce intangible products that
cannot be produced ahead of time.
2
7
2. in manufacturing
organizations
Second, most customers have no
direct contact with the operation.
Customer contact occurs through
distributors and retailers.
• For example, a customer buying a
car at a car dealership never
comes into contact with the
automobile factory.
 Characteristics of
2 manufacturing and service
8 organizations
2 Operations in the Service
9 Sector

•Production of goods results in a

tangible output.

•Service, on the other

hand, generally implies an act.
 The majority of service
3
0 1. jobs;
Government (federal, state, local).
2. Wholesale/retail (clothing, food,
appliances, stationery, toys, etc .).
3. Financial services (banking,
stock brokerages, insurance, etc .).
4. Health ca re (doctors, dentists,
hospitals, etc.).
5. Personal services (laundry, dry
cleaning, hair/beauty, gardening, etc.).
6. services (data processing,
Business
business e- delivery, employment
,
etc.). agencies,
7. Education (schools, colleges,
etc.).
 Service Operation
31 Characteristics
• Service involves a much higher degree
of
customer contact than manufacturing.
• Service operations are subject to
greater variability of inputs than
typical manufacturing operations.
• Services often require a higher labor
content whereas manufacturing, with
exceptions, ca n be more ca pital-
intensive (i.e., mechanized).
• Service activities sometimes appear to
be slow and awkward, and output is
more variable.
 Service Operation
3
2
Characteristics
• In service operations, variations in
demand intensity and in requirements
from job to job make productivity
measurement considerably more
diffic ult.
• In many instances customers receive
the service as it is performed (e.g.,
haircut, dental care).
• Quality assurance is more
challenging in services when
production and consumption oc c ur
at the same time
 End of the
presentation
3
3
Thank you
and God
Bless