Introduction to Operations Management

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Introduction to Operations Management

• Dr. Kishore Morya

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Learning Outcomes

• What is operations management?
• Why study operation management?
• Production System defined
• Operations as a service
• Historical development of OM
• Current Issues in OM

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Operations Management is

• The business function responsible for planning,
  coordinating, and controlling the resources
  needed to produce products and services for a
  company

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Operations Management is

• A management function
• An organizations core function
• In every organization whether Service or
  Manufacturing, profit or Not for profit

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Typical Organization Chart
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What is Role of OM?

• OM Transforms inputs to outputs
• Inputs are resources such as
• People, Material, and Money
• Outputs are goods and services

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OMs Transformation Process
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OMs Transformation Role

• To add value
• Increase product value at each stage
• Value added is the net increase between output
  product value and input material value
• Provide an efficient transformation
• Efficiency means performing activities well for
  least possible cost

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Goods Services

• Manufacturing
• Tangible product
• Product can be inventoried
• Low customer contact
• Longer response time
• Capital intensive

• Services
• Intangible product
• Product cannot be inventoried
• High customer contact
• Short response time
• Labor intensive

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On the other hand

• Both use technology
• Both have quality, productivity, response
  issues
• Both must forecast demand
• Both will have capacity, layout, and location
  issues
• Both have customers, suppliers, scheduling and
  staffing issues
• Manufacturing often provides services
• Services often provides tangible goods

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• What is Production System?
• A production system is defined as a user of
  resources to transform inputs into some desired
  outputs

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Processes and Operations
Internal and External Customer
Processes Operations
INPUTS Workers Managers Equipments Facilities Mate
rials Services Land Energy
OUTPUTS Goods Services
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3
5
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Information on Performance
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• Transformation

• Physical--manufacturing
• Locational--transportation
• Exchange--retailing
• Storage--warehousing
• Physiological--health care
• Informational--telecommunications

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What is a Service and What is a Good?

• If you drop it on your foot, it wont hurt you.
  (Good or service?)
• Services never include goods and goods never
  include services. (True or false?)

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• Why study Operations Management?

Systematic Approaches to Org. Processes
Operations Management
Careers Opportunities
Business Education
Cross Functional Applications