Operations Management CustomerFocused Principles

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Operations ManagementCustomer-Focused Principles

• Introduction to Operations Management

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The Operations Function(I)

• Core of the Organization
• Other Functional Areas
• Marketing (demand)
• Finance (money)
• Engineering (design)
• Other? gt support

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Basic Management Responsibilities
The Organization
MoneyManagement
DemandManagement
OperationsManagement
DesignManagement
1-2
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The Operations Function(II)

• Differs Based upon Industry/Organization
• High volume retailing (e.g., WalMart)
• Housing construction (e.g., SDC) Law firms
  (e.g., Bendini, Lambert, Locke)
• Professional football teams (e.g., Denver
  Broncos)
• Accounting firms (e.g., Arthur Anderson)
• Universities (e.g., ASU)
• Others
• Similarities gt Principles of OM

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The Operations Function(III)

• Operation Transformation Process
• Process inputs
• 6 Ms
• Management
• Methods
• Materials
• Machines
• Maintenance
• Personnel
• Also information energy
• Transformation (macro/micro views)
• Outputs (components / finished goods / services

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Operations A Transformation Process
1-1a
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Operations A Transformation Process
Outputs
Goods
TransformationProcesses
Services
1-1
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The Operations Function(IV)

• Measurements
• Characteristics of outputs
• Relation of outputs to inputs (productivity)
• Improving Operations
• Methods
• Technology
• Quality
• Management (not necessarily workers)
• Capital

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Operations Management Time Line
OperationsResearch (1938)
Service-sectorapplications
HawthorneStudies (1927)
ScientificManagement
IndustrialRevolution
Just-in-timeTQM
MRP
1760
1860
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
1-3
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Customers and Requirements(I)

• Customer Concept
• Types
• External
• Internal (next process)
• Focus of TQM
• Everyones Job Serve the Customer
• Improving Customer Satisfaction
• Measure according to wants and needs
• Exhibit 1-5

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General Customer Requirements
QualityFlexibilityService
CostsResponse TimesVariability
1-4
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Customers and Requirements(II)

• Meeting Organizational Requirements
• Competitiveness (market share, satisfaction,
  etc.)
• Productivity
• OM related measures
• Customer satisfaction
• Inventory turnover
• Improved quality
• Improved responsiveness
• Improved flexibility
• Reduced variability
• Value chain (added value concept)

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Customers and Requirements(III)

• Operations Managers
• Associates
• Front line supervisors
• Upper management
• Staff experts