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- 1. Operations Management Operations and Productivity Chapter 1
- 8. What Is Operations Management? Production is the creation of goods and services Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs
- 9. Organizing to Produce Goods and Services
- 13. Functions - Bank Operations Finance/ Accounting Marketing Check Clearing Teller Scheduling Transactions Processing Security Commercial Bank © 1984-1994 T/Maker Co.
- 14. Functions - Airline © 1984-1994 T/Maker Co. Operations Finance/ Accounting Marketing Ground Support Flight Operations Facility Maintenance Catering Airline
- 15. Functions - Manufacturer Operations Finance/ Accounting Marketing Production Control Manufacturing Quality Control Purchasing Manufacturing
- 16. Organizational Charts Commercial Bank Operations Teller Scheduling Check Clearing Transactions processing Facilities design/layout Vault operations Maintenance Security Finance Investments Security Real Estate Accounting Auditing Marketing Loans Commercial Industrial Financial Personal Mortgage Trust Department
- 17. Organizational Charts Airline Operations Ground support equipment Maintenance Ground Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications Dispatching Management science Finance & Accounting Accounting Payables Receivables General Ledger Finance Cash control International exchange rates Marketing Traffic administration Reservations Schedules Tariffs (pricing) Sales Advertising
- 18. Organizational Charts Manufacturing Operations Facilities: Construction:maintenance Production & inventory control Scheduling: materials control Supply-chain management Manufacturing Tooling, fabrication,assembly Design Product development and design Detailed product specifications Industrial engineering Efficient use of machines, space, and personnel Process analysis Development and installation of production tools and equipment Finance & Accounting Disbursements/credits Receivables Payables General ledger Funds Management Money market International exchange Capital requirements Stock issue Bond issues and recall Marketing Sales promotions Advertising Sales Market research
- 19. Why Study OM?
- 21. Options for Increasing Contribution
- 22. What Operations Managers Do Plan - Organize - Staff - Lead - Control
- 29. Where are the OM Jobs
- 30. Where are the OM Jobs
- 32. The Heritage of Operations Management
- 33. Significant Events in Operations Management
- 34. The Heritage of Operations Management Division of labor (Adam Smith 1776 and Charles Babbage 1852) Standardized parts (Whitney 1800) Scientific Management (Taylor 1881) Coordinated assembly line (Ford/Sorenson/Avery 1913) Gantt charts (Gantt 1916) Motion study (Frank and Lillian Gilbreth 1922 Quality control (Shewhart 1924; Deming 1950) Computer (Atanasoff 1938) CPM/PERT (DuPont 1957)
- 35. The Heritage of Operations Management - Continued Material requirements planning (Orlicky 1960) Computer aided design (CAD 1970) Flexible manufacturing system (FMS 1975) Baldrige Quality Awards (1980) Computer integrated manufacturing (1990) Globalization(1992) Internet (1995)
- 46. Operations in the Service Sector
- 49. Service Economies Proportion of Employment in the Service Sector
- 52. Goods Contain Services / Services Contain Goods Automobile Computer Installed Carpeting Fast-food Meal Restaurant Meal Auto Repair Hospital Care Advertising Agency Investment Management Consulting Service Counseling Percent of Product that is a Good Percent of Product that is a Service 0 25 50 75 100 25 50 75 100
- 53. Organizations in Each Sector – Table 1.4 7.2 Pacific Gas & Electric, American Airlines, Santa Fe R.R, Roadway Express Utilities, transportation 20.6 Walgreen’s, Wal-Mart, Nordstroms Trade (retail, wholesale) 24.3 New York City PS108, Notre Dame University, San Diego Zoo Professional services, education, legal, medical % of all Jobs Example Service Sector
- 54. Organizations in Each Sector – Table 1.4 4.5 U.S., State of Alabama, Cook County Public Administration 5.2 McDonald’s, Hard Rock Café, Motel 6, Hilton Hotels, Walt Disney Paramount Pictures Food, Lodging, Entertainment 6.5 Citicorp, American Express, Prudential, Aetna, Trammel Crow Finance, Insurance, Real Estate 7.1 Snelling & Snelling, Waste Management, Pitney-Bowes Business & Repair Services % of all Jobs Example Service Sector
- 55. Organizations in Each Sector – Table 1.4 2.4 King Ranch Agriculture 0.4 Homestake Mining Mining 7.0 Bechtel, McDermott Construction 14.8 General Electric, Ford, U.S. Steel, Intel General % of all Jobs Example Manufacturing Sector
- 56. Organizations in Each Sector – Table 1.4 Summary 24.6% Manufacturing 75.4% Service % of all Jobs Sector
- 57. Development of the Service Economy 1850 75 1900 25 50 75 2000 40 50 60 70 1970 75 80 85 90 95 2000 Percent United States Canada France Italy Britain Japan W Germany 1970 2000 Services Industry Farming 250 200 150 100 50 0 80 %70 60 50 40 30 20 10 0 U.S. Employment, % Share Services as a Percent of GDP U.S. Exports of Services In Billions of Dollars Year 2000 data is estimated
- 58. Exciting New Challenges in Operations Management
- 59. Changing Challenges for the Operations Manager
- 60. Changing Challenges for the Operations Manager
- 62. The Economic System Transforms Inputs to Outputs The economic system transforms inputs to outputs at about an annual 2.5% increase in productivity (capital 38% of 2.5%), labor (10% of 2.5%), management (52% of 2.5%) Land, Labor, Capital, Management Goods and Services Feedback loop Inputs Process Outputs
- 63. Typical Impact of Quality Improvement As productivity improved Costs were pared Wages increased Parts per man hour 95 100 105 110 115 Year A Year B Year C Cost per unit decreased $1.50 $1.75 $2.00 $2.25 Year A Year B Year C Average worker's annual cash compensation increased 24000 25000 26000 27000 Year A Year B Year C
- 69. Jobs in the U.S
- 71. Investment and Productivity in Selected Nations
- 73. The Challenge of Social Responsibility Increasing emphasis on business and social responsibility
Notas del editor
- At this point: 1. Introduce yourself - your students are likely to want to know something about your qualifications and interests - overall, where you are coming from. 2. Have students introduce themselves. Ask why they are taking this class. If you are fortunate enough to have a Polaroid camera, take pictures of each student for later posting on a class “board” so both they and you get to know each other. 3. Discuss both choice of textbook and development of syllabus. 4. If you are expecting students to work in teams, at east introduce the choice of team members. If at all possible, have students participate in a team building or team study exercise. It works wonders. Most student have been told to work in teams in prior classes, but have never examined exactly what a team is and how it works. One hour spent in a team building/examination exercise saves many hours and avoids many problems later on.
- Two additional points: 1. Any activity is an “operation” 2. No company produces only “goods” - service is a greater or lesser part of any product. (Discuss this in more detail later)
- Here is the point at which you can add to your discussion of the three business functions. In an effort to encourage student participation, you might allow students to lead the discussion as to the nature of each function, while you lead the discussion as to the relationship of the individual functions to the larger business. Initiate a class discussion about how these functions expand as the firm grows and how new activities have become important (i.e., MIS and Human Resources)
- One might ask students to consider: - marketing => deciding what is needed - finance => securing resources - operations => doing it! What are the limitations of this perspective?
- Students can do the math! It may be useful to show a more detailed breakdown of cost-of-goods-sold, and illustrate the contribution to cost-of-goods sold of marketing, finance/accounting, and operations. It may also be helpful to use this data to introduce and illustrate fixed and variable costs and their relationship to net contribution.
- This is the typical breakdown one finds in many business courses. It may be helpful to the students if you discuss each of these elements in relationship to something you or they have done. Work on a group project, for example, can provide a useful vehicle for the discussion.
- This slide introduces the 10 decision areas of Operations Management. These decision areas form the structure of the text. You may either go through this list quickly, and hold an enriched discussion using some of the slides that follow; or ask the students to give you examples of specific decisions from each area. As mentioned before - you may forego looking for precise answers at this point - and simply try to get them thinking and involved.
- Using this and subsequent slides, you might go through in more detail the decisions of Operations Management. While greater detail is provided by these slides than the earlier one, you may still decide to have the students contribute examples from their own experience.
- Ask your students for input here. Look for positions that they or their parents have filled. You might also ask them (a) what positions they are seeking upon graduation; and (b) to “predict” how demand for workers in each of these areas is likely to change over time, and why. Finally, have them consider the skills required of the occupants of each position
- You should stress that the time-based historical perspective is only one way to look at the development of Operations Management, outcome focus is another.
- You might ask students why standardization is so important. If their answers do not raise the issue, here is a good time to introduce the concept of “setup.” Discussion of Whitney also raises issues of quality control, and even worker training.
- Some students argue that Taylor’s main objective was to get more from the workers. You might discuss the difference between trying to get more out of the workers and trying to improve their efficiency.
- There are several issues which can be raised here: - the individual nature of individuals (not everyone is suited to the same job) - how does one decide what is “proper” training? - perhaps “a poor workman blames his tools;” but a workman may only be as good as his tools - “a day’s pay for a day’s work” - what is a “day’s work”? How do we decide? How do we arrive at a monetary value for this day’s work?
- Ask the students: So what? Get them to think about task performance at various levels of detail. - How does one determine the most efficient motions to be used? - How does one “balance” the performance of a task so that one limb does not bear an excessive load? - How can one “design a job” before actually performing a task? You might also wish to discuss the book and movies about the Gilbreths and their children.
- Assembly lines are widely accepted and used. Are they actually “God’s gift to repetitive manufacturing?” Have students consider the Volvo experiment where teams were used to build automobiles.
- Have students consider why Dr. Deming’s popularity was so great in Japan, but took such a long time to develop in the U.S.
- Here you might try to make two points: - there are many contributions from outside the OM/business disciplines (one of the most important characteristics of an Operations Manager is the ability to work with or within multiple disciplines) - the greater contribution from the information sciences is not to make things occur faster (automation) but to enable the operations manager to look at problems from a different perspective.
- Gives you a chance to summarize some of the critical events in the evolution of OM.
- Use this and the subsequent slide to get students thinking about some of the changes taking place in OM. Try to help them understand both the causes of the changes and the implications. In particular, have them consider the role of information and of information technology.
- You might pick a company that produces a physical product that will be familiar to the students, ask students to identify the product, and discuss its characteristics. Once the students have identified the physical characteristics of the product, you can ask “What other characteristics does the company believe its product possesses?” This question will often raise the issue of “service.” Companies which might it be helpful to consider include: Xerox - an information management company (not just copiers) McDonalds, Burger King, Wendys - either compare the viewpoints of the three companies, or contrast them to a gourmet restaurant Volkswagen versus Volvo, Mercedes or Rolls Royce.
- Here it is probably useful to look to the students to identify both company and product. You might use the approach of taking one characteristic at a time and asking the students to identify a service that has that characteristic: Unique - wedding planning High customer interaction - health care Inconsistent definition - “consulting” etc.
- At this point, you might approach this and the next several slides by asking students to identify a product (good or service as appropriate) that illustrates each characteristic. You might also ask them to identify products that violate one or more of these distinctions between goods and services.
- This slide should help you make the point that a “product” is seldom only a “good” or only a “service” but usually includes some of each. You might also raise the point that as companies are reaching the limit of evolution of the physical (good), they are tending to add information (a service) to their product. Finally, it is important that the student be able to cite examples illustrating each of the ranges shown in the slide.
- Have your students consider the U.S. Employment Services/Industry/Farming shares. What factors will ultimately act to limit changes in this graph. What about the other two graphs?
- Ask your students to consider why the rate of growth of productivity in the U.S. is so low. As they identify factors, have them link these factors to the resources of capital, labor, and management. This may also be a good point at which to introduce the notions of efficiency (doing a job well), and effectiveness (doing the right job). It may be especially helpful to discuss the conditions under which efficiency or effectiveness becomes the more important.
- This slide may help explain why an increasing productivity is so important if one wishes an increased standard of living.
- The productivity discussion can continue with this slide. One question for students might be: Why is the present rate of productivity improvement in the U.S. less than in the period 1889 to 1973? You might also ask them to consider what happens as the rate of productivity improvement approaches zero. Does this simply mean that the standard of living ceases to rise, or are there more ominous manifestations?
- This slide can be used to introduce multi-factor productivity.
- Ask the students to think about why productivity is so difficult to measure. Have them identify several tasks or jobs, and help them identify some possible productivity measures. Ask them how they would go about making these measurements. Student and faculty productivity certainly provide examples that can generate discussion! You might ask your students if they believe “grades” measure student productivity.
- Here again, faculty and student productivity make useful discussion generators. Students can certainly look at the role of both capital and management in the classroom - and they are likely to be able to tie the three productivity variables to the presentation or teaching methodologies of different faculty.
- You might first ask students to consider the conditions under which each of the key variables is most important. Once the conditions are identified, you might list the conditions on the board or screen and ask students to develop a method for comparing various countries on the basis of these conditions. Where would they place the U.S.? Developing countries? Etc.
- You might ask the students, how, in general, they might expect the figures shown in this graph to change over the next twenty years. In addition, initiate a discussion of how we have moved from “hunting and gathering” to “agriculture” to “manufacturing” to “service.”
- You can use this slide to frame a discussion of service productivity. Ask students to provide examples of services having each characteristic. Once they have done this, ask if they can think of a way to overcome or change the characteristics for that service so as to increase productivity.