chapter 1 stevenson book.ppt slides of 1st

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1. 1-1Introduction to Operations Management
William J. Stevenson
Operations Management
8
th edition

2. 1-2Introduction to Operations Management
CHAPTER
1
Introduction to
Operations Management
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

3. 1-3Introduction to Operations Management
Operations ManagementOperations Management
The management of systems or processes
that create goods and/or provide services
Organization
Finance Operations Marketing
Figure 1.1

4. 1-4Introduction to Operations Management
Value-AddedValue-Added
The difference between the cost of inputs
and the value or price of outputs.
Inputs
Land
Labor
Capital
Transformation/
Conversion
process
Outputs
Goods
Services
Control
Feedback
FeedbackFeedback
Value added
Figure 1.2

5. 1-5Introduction to Operations Management
Steel production
Automobile fabrication
Home remodeling
Retail sales
Auto Repair
Appliance repair
Maid Service
Manual car wash
Teaching
Lawn mowing
High percentage goods
Low percentage service
Goods-service ContinuumGoods-service Continuum
Low percentage goods
High percentage service
Figure 1.3

6. 1-6Introduction to Operations Management
Food ProcessorFood Processor
Inputs ProcessingOutputs
Raw VegetablesCleaning Canned
vegetables Metal Sheets Making cans
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment
Table 1.2

7. 1-7Introduction to Operations Management
Hospital ProcessHospital Process
Inputs ProcessingOutputs
Doctors, nursesExaminationHealthy
patientsHospital Surgery
Medical SuppliesMonitoring
Equipment Medication
Laboratories Therapy
Table 1.2

8. 1-8Introduction to Operations Management
Production of Goods vs. Delivery of ServicesProduction of Goods vs. Delivery of Services
Production of goods – tangible output
Delivery of services – an act
Service job categories
Government
Wholesale/retail
Financial services
Healthcare
Personal services
Business services
Education

9. 1-9Introduction to Operations Management
Key DifferencesKey Differences
1.Customer contact
2.Uniformity of input
3.Labor content of jobs
4.Uniformity of output
5.Measurement of productivity
6.Production and delivery
7.Quality assurance
8.Amount of inventory

10. 1-10Introduction to Operations Management
Operations Management includes:
Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
Scope of Operations ManagementScope of Operations Management

11. 1-11Introduction to Operations Management
The operations function
Consists of all activities directly related to
producing goods or providing services

12. 1-12Introduction to Operations Management
U.S. Manufacturing vs. Service Employment
0
20
40
60
80
100
455055606570758085909500
Year
P
e
r
c
e
n
t
YearMfg.Service
4579 21
5072 28
5572 28
6068 32
6564 36
7064 36
7558 42
8044 46
8543 57
9035 65
9532 68
0030 70
Figure 1.4

13. 1-13Introduction to Operations Management
Responsibilities of Operations ManagementResponsibilities of Operations Management
Products & services
Planning
–Capacity
–Location
–
–Make or buy
–Layout
–Projects
–Scheduling
Controlling/Improving
–Inventory
–Quality
Organizing
–Degree of centralization
–Process selection
Staffing
–Hiring/laying off
–Use of Overtime
Directing
–Incentive plans
–Issuance of work orders
–Job assignments
–Costs
–Productivity
Table 1.6

14. 1-14Introduction to Operations Management
Key Decisions of Operations ManagersKey Decisions of Operations Managers
What
What resources/what amounts
When
Needed/scheduled/ordered
Where
Work to be done
How
Designed
Who
To do the work

15. 1-15Introduction to Operations Management
Business Operations OverlapBusiness Operations Overlap
Operations
Finance
Figure 1.5
Marketing

16. 1-16Introduction to Operations Management
Operations InterfacesOperations Interfaces
Public
Relations
Accounting
Industrial
Engineering
Operations
Maintenance
Personnel
Purchasing
Distribution
MIS
Legal

17. 1-17Introduction to Operations Management
Trends in BusinessTrends in Business
Major trends
The Internet, e-commerce, e-business
Management technology
Globalization
Management of supply chains
Agility