Chapter 1 Overview

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Chapter 1 - Overview

• Operations Management Definition, Functions,
  Evolution

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Definition Operations
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Resources (Inputs)

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Definition Management

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

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Definition Operations Management

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

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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.

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Primary Business Functions
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OM Topics

• Competitiveness, strategy, productivity
• Quality management
• Types of operations (project, job, batch,
  repetitive, continuous flow)
• Forecasting and aggregate demand
• Supply chain management (including purchasing,
  inventory control, MRP, JIT)
• Project management
• Product and service design, capacity planning
• Process design, facility location and layout

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Why Study OM?

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Evolution of OM pre-1900

• Ancient government, military, religious
• Pyramids, Great Wall, some trade
• Most business small, local, family
• Renaissance exploration, trade, banking,
  manufacturing 1400-1700
• Division of labor, interchangeable parts, and the
  steam engine 1700s
• Transportation RR, steel and steamships 1800s

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Evolution of OM 1900s

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

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Evolution of OM 1900s

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

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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

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Evolution of OM 1970

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

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Recent Trends

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

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