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1

Goods & Services Services Intangible product

Product cannot beinventoried

High customer contact

Short response time

Labor intensive

Manufacturing Tangible product

Product can beinventoried

Low customer contact

Longer response time

Capital intensive

Wiley 2010

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Production:

Application of resources such as people and

machinery to convert materials into finished goods and services.

Production and Operations Management:

Managing people

and machinery in converting materials and resources into finished

goods and services.

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What Operations and Supply Chain

Managers Do

What is Operations Management?

design, operation, and improvement ofproductive systems

What is Operations? a function or system that transforms inputs

into outputs of greater value

What is a Transformation Process? a series of activities along a value chainextending from supplier to customer

activities that do not add value are superfluous

and should be eliminated

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Transformation Process

Physical: as in manufacturing operations Locational: as in transportation or warehouse

operations

Exchange: as in retail operations

Physiological: as in health care

Psychological: as in entertainment

Informational: as in communication

Copyright 2011 John Wiley & Sons, Inc. 1-4

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How is Operations Relevant

to my Major?

Accounting

InformationTechnology

Management

As an auditor you must understand the

fundamentals of operations

management.

IT is a tool, and theres no better place toapply it than in operations.

We use so many things you learn in an

operations classscheduling, leanproduction, theory of constraints, and

tons of quality tools.


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How is Operations Relevant

to Major?

Economics

Marketing

Finance

Its all about processes. I live byflowcharts and Pareto analysis.

How can you do a good jobmarketing a product if youre unsureof its quality or delivery status?

Most of our capital budgetingrequests are from operations, andmost of our cost savings, too.


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Evolution of Operations and

Supply Chain Management

Craft production process of handcrafting products or

services for individual customers

Division of labor dividing a job into a series of small tasks

each performed by a different worker

Interchangeable parts standardization of parts initially asreplacement parts; enabled massproduction


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Evolution of Operations and

Supply Chain Management

Scientific management

systematic analysis of work methods

Mass production

high-volume production of a standardized product fora mass market

Lean production

adaptation of mass production that prizes quality and

flexibility


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Todays run down


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Historical Events in

Operations Management

Era Events/Concepts Dates Originator

Industrial

Revolutio

n

Steam engine 1769 James Watt

Division of labor 1776 Adam Smith

Interchangeable parts 1790 Eli Whitney

ScientificManagement

Principles of scientific

management1911 Frederick W. Taylor

Time and motionstudies 1911Frank and LillianGilbreth

Activity schedulingchart

1912 Henry Gantt

Moving assembly line 1913 Henry FordCopyright 2011 John Wiley & Sons, Inc. 1-11

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HumanRelations

Hawthorne studies 1930 Elton Mayo

Motivation theories

1940s Abraham Maslow

1950s Frederick Herzberg

1960s Douglas McGregor

OperationsResearch

Linear programming 1947 George Dantzig

Digital computer 1951 Remington Rand

Simulation, waiting

line theory, decision

theory, PERT/CPM

1950s Operations researchgroups


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QualityRevolution

JIT (just-in-time) 1970s Taiichi Ohno (Toyota)

TQM (total quality

management)1980s

W. Edwards Deming,

Joseph Juran

Strategy andoperations

1980s Wickham Skinner,Robert Hayes

Reengineering 1990sMichael Hammer,

James Champy

Six Sigma 1990s GE, Motorola


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Era Events/Concepts Dates OriginatorInternetRevolution

Internet, WWW, ERP,supply chain management

1990s ARPANET, Tim

Berners-Lee SAP,

i2 Technologies,

ORACLE, DellE-commerce 2000s Amazon, Yahoo,

eBay, Google, andothers

Globalization WTO, European Union,Global supply chains,Outsourcing, ServiceScience

1990s

2000s

China, India,emergingeconomies


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EraEvents/Conce

pts

Dat

esOriginator

GreenRevolution

Global warming,An InconvenientTruth, Kyoto

Today Numerousscientists,statesmenandgovernments


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Wiley 2010 16

Todays OM Environment

Customers demand better quality, greaterspeed, and lower costs

Companies implementing lean systemconceptsa total systems approach toefficient operations

Recognized need to better manageinformation using ERP and CRM systems

Increased cross-functional decision making

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Evolution of Operations and Supply

Chain Management

Supply chain management

management of the flow of information, products, and services across a

network of customers, enterprises, and supply chain partners

1-17Copyright 2011 John Wiley & Sons, Inc.

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Copyright 2011 John Wiley & Sons, Inc.Copyright 2011 John Wiley & Sons, Inc.

Globalization

Why go global? favorable cost

access to international markets

response to changes in demand

reliable sources of supply latest trends and technologies

Increased globalization

results from the Internet and falling trade barriers

1-18

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Productivity and Competitiveness

Competitiveness degree to which a nation can produce goods andservices that meet the test of international markets

Productivity ratio of output to input

Output sales made, products produced, customers served,

meals delivered, or calls answered

Input

labor hours, investment in equipment, material usage,or square footage


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Strategy and Operations

How the mission of a company isaccomplished

Provides direction for achieving a

mission Unites the organization

Provides consistency in

decisions Keeps organization moving in the

right directionCopyright 2011 John Wiley & Sons, Inc. 1-20

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Copyright 2011 John Wiley & Sons, Inc.Copyright 2011 John Wiley & Sons, Inc.

Strategic Planning

1-21

Missionand Vision

CorporateStrategy

OperationsStrategy

MarketingStrategy

FinancialStrategy

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Positioning the Firm

Cost

SpeedQuality

Flexibility1-22

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Positioning the Firm: Cost

Waste elimination relentlessly pursuing the removal of all

waste

Examination of cost structure looking at the entire cost structure for

reduction potential

Lean production providing low costs through disciplined

operations


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Production control creates a well-definedset of procedures for coordinatingpeople, materials, and machinery.

1) Planning

2) Routing

3) Scheduling

4) Dispatching

5) Follow-up

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International Organization for Standardization (ISO)-

mission is to promote the development of standardized

products to facilitate trade and cooperation across

national borders.

Representatives from more than 146 nations.

ISO 9000 series of standards sets requirements for

quality processes.

Nearly half a million ISO 9000 certificates have been

awarded to companies around the world.

ISO 14000 series also sets standards for operations that

minimize harm to the environment
http://www.iso.org/iso/en/iso9000-14000/index.htmlhttp://www.iso.org/iso/en/iso9000-14000/index.html

8 nov.pptx

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