Introduction to Operations Management

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?1?

• ??????
• Introduction to Operations Management

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?????? chapter objective

• ?????????????????????
• ????????????????????????
• ???????????????????????????????
• Define operations management, know the three
  major functional areas of organizations
• Compare and contrast service and manufacturing
  operations, the operations function and the
  nature of the operations managers job.
• Two major aspects of process management, the key
  aspects of operations management decision making,
  business current trends impact on operations
  management.

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1.1 ?? introduction

• ?????????????????????? Operations is that part of
  a business organization that is responsible for
  producing good and/or services.
• ???????????????????????,????????????????While the
  operations function is responsible for producing
  products and /or delivering services, it needs
  the support and input from other areas of the
  organization.
• ??????????????? The three basic functions of
  business organizations

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1.1???????? operations management and supply
chain

• ???????????????Operations and supply chains
  exist at the same time.
• ????
• ??????????????????????Involved in the management
  of systems or processes that produce goods and/or
  provide services.
• ???
• ?????????????? Includes transforming or
  converting inputs into outputs.
• ????????????????????The essence of the operations
  function is to add value during the
  transformation process.

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????????A simple of supply chains

• ???(supply chain)
• ???????????????????,??????????????A sequence of
  activities and organizations involved in
  producing and delivering a good or service.
• ??????,??????????????Supply chains are both
  external and internal to the organization.

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????the transformation process

• ???????????????????? The essence of the
  operations function is to add value in the
  transformation process.
• ????(value-added)?????????(???)??????The
  difference between the cost of inputs and the
  value of price of outputs

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??-??????The goods-service continuum
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????????????The differences between production
of goods and delivery of services

• ????? Output can be
• ????(tangible output),????????????????????????????
  ????
• Such as automobile, eyeglasses, a golf ball bag
  and a refrigerator anything that we can see or
  touch.
• ????,??????????????????????????????????????
• Intangible output, such as a physicians
  examination, TV and auto repair, lawn care, and
  the projections of a file in a theater are
  examples of services.

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?????????? The differences between manufacturing
and service

• ???????????????????????,????????????The major
  difference between manufacturing and service
  manufacturing is goods- oriented, service is
  act-oriented.
• ???????The differences include
• 1.????????Degree of customer contact.
• 2.???????Uniformity of input.
• 3.???????Labor content of jobs.
• 4.???????Uniformity of output.
• 5.?????????Measurement of productivity.
• 6.??????????Production and delivery at the same
  time.
• 7.?????Quality assurance.
• 8.?????Amount of inventory.
• 9.?????Evaluation of work.
• 10.?????Ability to patent design.

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1.2 ???? Process Management

• ???????????????Process management is a key aspect
  of operations management.
• ??????????Three categories of business
  processes

?????? Three Categories of Business Processes ?? Description
?????? Upper-management processes ??????????These govern the operation of the entire organization.
????? Operational processes ????????????These are core processes that make up the value stream.
????? Supporting processes ????????These support the core processes.
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1.2 ???? Process Management


Supplier(s)

Customer(s) Input(s) from one
Transformation Or more suppliers
A business organization, a department, or an
individual operation
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???? Process variation

• ???????? Four basic sources of variation

???? Four Sources of Variation ?? Description
????????? Variety of goods or services being offered ??????????,?????????????? The greater the variety of goods and services offered, the greater the variation in production or service requirements.
???????? Structural variation in demand ???????????,????? These variations include trends, and seasonal variations. . These are generally predictable.
???? Random variation ?????????????????????????????????? Natural variation is present in all processes. Generally, it cannot be influenced by managers.
?????? Assignable variation ?????????????????????????????? Variation that has identifiable sources. This type of variation can be reduced or eliminated by analysis and corrective action.
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1.3 ??????????????Scope of operations
management based on service

• ??????????Use an airline as an example

???? activities ?? description
?? Forecasting ??????????? Weather, seat demand for flights
???? Capacity planning ???????????????Maintain cash flow and make a reasonable profit.
?? Scheduling ????????????,???????????????Scheduling of planes for flights and for routine maintenance scheduling of pilots, flight attendants and so on.
???? Managing Inventories ??,????????????? Managing inventories such items as foods and beverages, first-aid equipment.
???? Assuring quality ?????????????? ???????? Assuring flying and maintenance quality efficiency and courtesy.
??????? Motivating and training employees ?????????????? are very important in all phases of operations.
???? Locating facilities ??????????????? The service location based on managers decisions.
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1.3 ???????????????Scope of operations
management based on goods

• ????????,?????????
• Take a bicycle factory as an example to describe
  an
• assembly operation

???? Activities ?? Description
????? Buying components ??,??????????????????????? Components include such as frames, tires, wheels, gears and other items from suppliers.
????? Fabrication ????????????,??????????????????? Forming frames, making the gears and chains, and buying mainly raw materials and a few parts and materials.
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1.3 ??????? Scope of operations management

• ??????????????????
• A primary function of an operations manger is to
  guide the production system
• ????(system design)
• ????????????,??????????These decisions require
  long-term commitments. They are typically
  strategic decisions.
• ????(system operation)
• ???????????
• These are tactical and operational decisions.
• ??????Other areas of operations function
• ?? Purchasing
• ???? Industrial engineering
• ?? Distribution
• ?? Maintenance

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1.4 ?????????Why learn about operations
management?

• ????????? The motive to learn operations
  management
• ????????Every aspect of business
• ??????????????,?????????Through learning about
  operations and supply chains, you will have
  better view of business.
• ???????????????????Many career opportunities in
  the operations management and supply chains
  fields.

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??????????????The three major functions of
business organizations overlap
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?????????Operations interfaces with supporting
functions
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1.5 ????decision making

• ???????????The key decisions affecting the
  entire organization
• ?? What
• ??????????????What resources will be needed, and
  in what amounts?
• ?? When
• ????????????????????????????????????? When will
  resources be needed? When should the work be
  scheduled? When should materials and other
  supplies be ordered? When is corrective action
  needed?
• ?? Where
• ???????? Where will the work be done?
• ??How
• ????????????????????????How will the product or
  service be designed? How to accomplish the work?
  How will the resources be allocated?
• ?Who
• ??????? Who will do the work.

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?????????The general method of decision making

• ?? Models
• ???? Quantitative approaches
• ???? Performance metrics
• ?????? Analysis of trade-offs
• ????? Degree of customization
• ???? A systems approach
• ?????? Establishing priorities
• ?? Ethics

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?? Models

• ???????????????
• Models are classified as physical, schematic, or
  mathematical
• ???? Physical models
• ??????,???????????????
• Such as miniature cars. The advantage is their
  visual correspondence with reality.
• ???? Schematic models
• ?????????????????????? Less resemblance to the
  physical reality. The advantage is easy to
  construct and change.
• ???? Mathematical models
• ????????????
• Most abstract. The advantages is easy to handle.
  

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????Quantitative Approaches

• ??????????,???????????????Use Quantitative
  approaches to solve problem in order to obtain
  mathematically optimal solutions to managerial
  problems.
• ????(linear programming)
• ????????????????? Used for optimum allocation
  of scarce resources
• ????(queuing techniques)
• ??????????????Useful for analyzing situations
  in waiting lines form.
• ????(inventory models)
• ???????????Used to control inventories.

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????Quantitative Approaches

• ????(project models)
• ???????(program evaluation and review technique,
  PERT)????(critical path method,
  CPM),???????????????????
• PERT and CPM are usefully for planning,
  coordinating, and
• control-line large-scale projects
• ????(forecasting techniques)
• ???????????
• Used in planning and scheduling.
• ????(statistical models)
• ????????????
• Used in many areas of decision making

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???? Performance Metrics

• ?????????????,????????????????????????????????????
  ? Metrics can be used to manage and control
  operations. Metrics include those related to
  profits, costs, quality, productivity,
  flexibility, assets, inventories, schedules, and
  forecast accuracy.

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??????Analysis of Trade-Offs

• ?????????????????????????????????? Decision
  makers can have better understand the
  consequences of the decisions they must make by
  listing the advantages and disadvantages- the
  pros and cons.

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????? Degree of Customization

• ?????????? Highly customized products or
  services
• ?????????????????
• Such as home remodeling, plastic surgery, and
  legal counseling
• ???????????????????????????????????????
• Tends to be more labor intensive than providing
  standardized products,
• more time consuming, requires more highly skilled
  people and involves
• more flexible equipment.
• ???????????????????? Tend to have much lower
  volume of output than standardized processes and
  have higher price tag.

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???? A System Approach

• ??(system)????????????? A system is a set of
  interrelated parts that much work together.
• ???????,??????????????,?? The organization in a
  business can be a system composed of subsystems.
• ?????? Marketing subsystem
• ?????? Operations subsystem
• ?????? Finance subsystem

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??????Establishing Priorities

• ???,????????????????? Typically, a relatively few
  issues or item are very important than others.
• ?????(Pareto phenomenon)
• ?????????????(??)??????????????,???(??)??? Not
  all the issues are proportionately important. A
  few factors account for a high percentage of the
  occurrence of some event (s), mostly dont.
• ???????????,?????????????,?????????? ?A manager
  should examine each situation, searching for the
  few factors that will have the greatest impact,
  and give them the highest priority.

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?? Ethics

• ???????????????
• ?????????????????
• ?????????????????????????,??????????
• ???????????????????,????????????????
• ??????,???????
• ????????????
• ????????
• ???????????????
• ????????????,?????
• ????????,??????????????

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?? Ethics

• Ethical issues arise in many aspects of
  operations management, including
• Financial statementsaccurately representing the
  organizations financial condition.
• Worker safetyproviding adequate training,
  maintaining equipment in good working condition,
  maintaining a safe working environment.
• Product safetyproviding products that minimize
  the risk of injury to users or damage to property
  or the environment.
• Qualityhonoring warranties, avoiding hidden
  defects.
• The environmentnot doing things that will harm
  the environment
• The communitybeing a good neighbor.
• Hiring and firing workersavoiding false
  pretenses?
• Closing facilitiestaking into account the impact
  on a community, and honoring commitments.
• Workers rightrespecting workers rights,
  dealing with workers problem quickly and fairly.?

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1.6 ?????????The historical evolution of
operations management

• ???? The industrial revolution
• ???? Scientific management
• ?????? The human relations movement
• ?????????Decision models and management science
• ????????? The influence of Japanese manufacturers

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????The industrial revolution

• ??????????????(craft production)? The earliest
  days of manufacturing is using craft production.
• ?????????????????????????,???????????? One or
  few highly skilled workers use simple, flexible
  tools to product small quantities of customized
  goods.
• ????????????????? Disadvantages waste time,
  cost high, no economies of scale
• ??????????????????? The Industrial Revolution
  reduced the need for custom-made goods.

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???? Scientific management

• ??????????.?????
• ??????????????????,??????,???????????
• ????????????????????????????????????????????,?????
  ????????
• ?????????????

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???? Scientific management

• The movement was spearheaded by Frederick
  Winslow, the father of scientific management.
• Taylor believed in a science of management
  based on observation, measurement, analysis and
  improvement of work methods, and economic
  incentives.
• Believed management should be responsible for
  planning, carefully selecting and training
  workers, finding the best way to perform each
  job, achieving cooperation between management and
  workers, and separating management activities
  form work activities.
• Taylors methods emphasized maximizing output.

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?????????????????Other pioneers contributed to
the movement of scientific management
??? ??
???????? ??????,??????????????????
????? ????????,???????????????
??????? ???????????????,??????????????
????? ??????,??????(mass production)??????????????(interchangeable parts)???(division of labor)???
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?????????????????Other pioneers contributed to
the movement of scientific management
Other Pioneers Introduction
Frank Gilbreth The father of motion study. He developed principles of Motion economy that could be applied to incredibly small portions of a task.
Henry Gantt Recognized the value of nonmonetary rewards system and developed Gantt charts for scheduling.
Harrington Emerson Applied Taylors ideas to organization structure and encouraged the use of experts to improve organizational efficiency.
Henry Ford The great industrialist. He introduced mass production to the automotive industry, and used the concept of interchangeable parts and division of labor
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??????The human relations movement

• ????????????????

?? ??? ??
1920? ?????? ????????????,????????????
1930? ?????? ??????????????????????????????????,?????????????????
1940? ???????? ????????
1950? ???????? ???????
1960? ????????? ??X???Y???
1970? ????? ??Z???
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??????The human relations movement

• Emphasized the human element in job design

Years Pioneers Introduction
1920 The Gilbreth couple Many studies focusing on worker fatigue and emphasis on motivation in the following decades.
1930 Elton Mayo The studies conducted at the Hawthorne division of Western Electric revealed that in addition to the physical and technical aspects of work, worker motivation is critical for improving productivity.
1940 Abraham Maslow Developed motivation theories.
1950 Frederick Hertzberg Refined motivation theories.
1960 Douglas Mcgregor Added theory X and Theory Y.
1970 Willian Ouchi Added theory Z.
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?????????Decision models and management science

• ??????????????????

?? ??? ??
1915? ??? ????????????
1930? ?????????? ????????????????
1935? ??? ????-????????
????????,??????????????????,?????????????????????????????????? ????????,??????????????????,?????????????????????????????????? ????????,??????????????????,??????????????????????????????????
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?????????Decision models and management science

• The factory movement was accompanied by the
  development of several quantitative techniques

Years Pioneers Introduction
1915 Harris Developed a mathematical model for inventory management.
1930 Dodge?Romig?Shewhart Developed statistical procedures for sampling and quality control.
1935 Tippett Provided the groundwork for statistical-sampling theory.
After World War II, efforts to develop and refine quantitative tools for decision making continued, resulting in decision models for forecasting, inventory management, project management and other areas of operations management. After World War II, efforts to develop and refine quantitative tools for decision making continued, resulting in decision models for forecasting, inventory management, project management and other areas of operations management. After World War II, efforts to develop and refine quantitative tools for decision making continued, resulting in decision models for forecasting, inventory management, project management and other areas of operations management.
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?????????The influence of Japanese manufacturers

• ?????????????????,??
• Japanese manufacturers developed or refined
  management
• practices , emphasized
• ??????? Quality and continual improvement
• ??????? Worker teams and empowerment
• ????? Achieving customer satisfaction
• ???????????????,??????????????(????)???? The
  Japanese led the quality revolution in
  industrialized Countries, also generated
  widespread interest in time-based management
  (just-in-time production).

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1.7 ????????????Key trends and issues in business

• ???????????????
• Must take current trends into account in their
  strategic planning
• ???????????????(e ???)
• The internet, e-commerce, and e-business
• ???? Management of technology
• ????? Globalization
• ????? Management of Supply chains
• ?? Outsourcing
• ?? Agility
• ?????? Ethical behavior

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????????? The need to manage the supply chain

• ?????????????????????????? The following issues
  now make it clear that management of supply
  chains is essential to business success
• ???????? The need to improve operations
• ??????? Increasing levels of outsourcing
• ??????? Increasing transportation costs
• ???? Competitive pressures
• ??????? Increasing globalization
• ??????????? Increasing importance of e-business
• ??????? The complexity of supply chains
• ???????? The need to manage inventories

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????????Elements of supply chain management
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????????Elements of supply chain management
Element Typical Issues Chapter(s)
Customers Forecasting Design Capacity planning Processing Inventory Purchasing Suppliers Location Logistics Determining what products and/or services customer want Predicting the quantity and timing of customer demand. Incorporating customers, wants, manufacturability, and time to market. Matching supply and demand. Controlling quality, scheduling work. Meeting demand requirements while managing the cost of holding inventory. Evaluating potential suppliers, supporting the needs of operations on purchased goods, and services. Monitoring supplier quality, on-time delivery, and flexibility maintaining supplier relations. Determining the location of facilities. Deciding how to best move information and materials. 3, 4 3 4 5, 13 10, 16 12, 13, 14, 15 11 11 8 11
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Thank You !

• ????
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• ??????????
• Continued to Chapter 2
• Competitiveness, Strategy and Productivity