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Chapter 01-introduction to om
- 5. Operations Management
(System’s View)
Management of Decisions and Activities Needed
to Effectively and Efficiently Transform the Inputs
of an Operating System to Throughput of the
System
© Dr. Mehdi Kaighobadi, FAU
Food for thought: What is the difference between “output” and “throughput?
- 6. Operations and Supply
Management
A Different View
Management of Decisions and Activities Needed to Effectively
and Efficiently Transform the Inputs of an Operating System to
Outputs of the System and Deliver them to the Right
Customers, at the Right Time and Place, and with the Right
Quality/Quantity.
© Dr. Mehdi Kaighobadi, FAU
- 7. Operations and Supply
Management
Key words/concepts in the definition:
Right Product
Customer (Consumers?) – What’s the difference?
Delivery (speed vs. consistency)
Quality
Quantity
Efficiency
Effectiveness
Value
Integrated view
© Dr. Mehdi Kaighobadi, FAU
- 8. Types of Transformations
(NOT mutually exclusive)
Physical (Manufacturing). Transform “A” into “B”
Location (Transportation) Move “A” from location X to
location Z
Exchange (Retailing) – Be a middleman
Storage (Warehousing) – Store for future use
Physiological (Healthcare) – Change a patient physically
and/or mentally.
Informational (Telecommunication) – Facilitate
exchange of data and info.
© Dr. Mehdi Kaighobadi, FAU
- 9. A Typical Supply Network
Notice that the word “chain” was not used; “network” was used)
© Dr. Mehdi Kaighobadi, FAU
- 10. “Goods” versus “Services”
Manufacturing Processes
Tangible output
Low consumer contact
Homogenous output
Output can be inventoried
Long lead time
Capital and labor intensive
Quality/Productivity is less
difficulty to define and thus
measure
Product and Process are
distinguished from each other.
Services Processes
Intangible output
High consumer contact
Heterogeneous output
Output cannot be inventoried
Shorter lead time
Labor and information intensive
Quality/Productivity is harder to
define and thus measure
Services are offered in “Service
Package” form
“Product” and “process” are
often the same.
© Dr. Mehdi Kaighobadi, FAU
- 11. “Goods” and “Services”
Not a B&W Classification!
100% 75% 50% 25% 0% 100%75%50%25%
Self-service groceries
Automobile
Installed carpeting
Fast-food restaurant
Gourmet restaurant
Auto maintenance
Haircut
Consulting services
Goods Services
© Dr. Mehdi Kaighobadi, FAU
Classifying a firm as “goods producing” or “service” operation is not a B&W case; it is a
matter of degrees.
- 12. Why is “Operations” Important?
It’s like asking why is having a “heart” important in your
health!
Operation is the heart of any organization. (Note that it is
“organization”, not just “business”)
Without operations, other functions have no place in
organization.
Studying operations makes it possible to realize how a
firm integrates its functions around one major goal.
Any organization has two fundamental functions (pared
down to the minimum); they are a) making and b)
delivering. Operations is 100% responsible for the first
and at least 50% for the second.
© Dr. Mehdi Kaighobadi, FAU