Chapter 1 Overview

1
Chapter 1 - Overview

• Operations Management Definition, Functions,
  Evolution

2
Definition Operations
3
Resources (Inputs)

• Material
• Labor
• Equipment
• Capital
• Land
• Buildings

• Technology
• Energy
• Knowledge
• Information
• Time
• Other?

4
Definition Management

• Activities involved in
• Planning
• Organizing
• Leading
• Controlling
• Other terms staffing, directing, etc.
• Directed to achieving organization goals

5
Definition Operations Management

• The value-added activities of planning,
  organizing, leading, and controlling involved in
  converting resources into goods and/or services.
  

6
Organizational Scope of OM

• Applies to all organizations
• Manufacturing
• Service (banks, insurance, health care)
• Wholesale retail
• Schools
• Religious institutions and charities
• Political parties, trade groups, unions
• Etc., etc., etc.

7
Primary Business Functions
8
OM Topics - 1

• Definition and evolution of OM
• Customers and competitiveness
• Strategy and productivity
• Quality management
• Types of operations (project, job, batch,
  repetitive, continuous flow)
• Product design
• Process planning and capacity management

9
OM Topics - 2

• Facility location and layout
• Work measurement
• Forecasting
• Inventory management
• Aggregate demand

10
OM Topics - 3

• Work scheduling
• Maintenance and reliability
• Supply chain management (including purchasing,
  inventory control, MRP, lean operations JIT)
• Project management

11
Why Study OM ?... because

• Its required for Business majors.
• It impacts us all
• It takes place in all organizations
• It reflects the rapidly changing world
• Many of you will be working directly in this area
• All managers need to possess some knowledge and
  skills covered here

12
Evolution of OM pre-1400

• Ancient government, military, religious
• Pyramids, Great Wall, some trade
• Most business small, local, family

13
Evolution of OM 1400-1900

• Renaissance exploration, trade, banking,
  manufacturing 1400-1700
• Division of labor (Adam Smith), interchangeable
  parts (Eli Whitney), and the steam engine (James
  Watt) 1700s
• Transportation RR, steel and steamships 1800s

14
Evolution of OM 1900s - 1

• Scientific management (1900-1920)
• Frederick W. Taylor (1856-1915)
• Industrial engineer
• Father of Scientific Management
• Published The Principles of Scientific Management
  in 1911
• ( Henry Gantt and Harrington Emerson)

15
Evolution of OM 1900s - 2

• Time and motion study
• Frank Lillian Gilbreth
• Assembly line and standardization
• Henry Ford
• Inventory management model
• F.W. Harris

16
Evolution of OM 1900s - 3

• Quality
• SPC Walter Shewhart,
• Acceptance Sampling H.G. Romig H.F. Dodge

17
Evolution of OM 1900s - 4

• Motivation
• Hawthorne studies Elton Mayo
• Hierarchy of needs Abraham Maslow, Frederick
  Hertzberg
• Theory X and Theory Y Douglas McGregor
• Theory Z William Ouchi
• Operations research various

18
Evolution of OM WW II

• Focus on output
• Post-war conditions of various countries
• U.S. capacity consumer demand money women
  in the workplace GI bill
• Changes in emphasis Production gt Mktg gt Cost
  management gt Mergers Acquisition
• Compare to Europe and Japan

19
Evolution of OM 1970

• Effects of Oil Embargo 1 and 2
• Role of Quality
• Understanding of Lean Operations (JIT)
• Recent trends
• See next slide

20
Recent Trends

• Global markets
• TQM
• Worker involvement
• Technology
• Reengineering
• Lean operations (JIT)
• Elimination of waste
• Customer satisfaction
• Shortening of time spans

• MRP II, ERP
• Extensive outsourcing
• Supply Chain Mgmt
• E-commerce B2C, B2B
• Internet brokering and application hosting
• Cost containment
• Business relocation
• Downsizing

21
Globalization issues - 2009

• Quality
• Communications
• Logistics
• Financial
• Legal

• Economic
• Cultural
• Sociological
• Political
• Theoretical