What is
“Operations Management”?
(and why should you care?)
Dr. Ron Lembke, Ph.D.
University of Nevada, Reno
Reaching me
Email:
ronlembke@unr.edu
• Phone:
(775) 682-9164
• WWW:
http://business.unr.edu/faculty/ronlembke
• Don’t call my house, and I won’t call yours.
When emailing, please include “352” in the subject line.
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Who Are You? (This is Homework)
In an email, please tell me the following:
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Your name
Email address
Where From
Major
Interests / Hobbies
Musical interests
when you anticipate graduating
any experience you have had that might be relevant to
this course
The Goal
What is the goal of a company?
Efficent & Effective
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Efficiency: Doing things with the least use of
resources
Effectiveness: Doing the right thing at the right
time.
Value = Quality / $
What is Operations Management?
• Managing the systems or processes that create
goods and/or provide services (p.4)
Goods vs. Services
• Car
• Coffee at Starbucks
• Oil Change
Growth of Service Economy
80
70
60
50
Services
Industry
Farming
40
30
20
10
0
1850
75
1900
25
50
75
2000
Why OM is the most important area
• Marketing gets people to buy our product
• Finance makes sure we have the money to
operate
• Accounting keeps track of what we spend
• Management keeps people on task
• I/S makes sure systems work to support
everyone else
• Operations actually makes the thing we
sell. Without operations, you can’t have a
company.
Why Do You Care?
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Satisfying Customers depends on Operations
You must understand and work in or with
Operations:
• Finance: Depr, Cash Flow, Make vs. Buy
• Acctg: Cost estimates, Overhead, Inv valuation
• Mktg: What can be done?
• HR: job descr, standards, incentives
• MIS: production, shipping, billing, receiving
Operations as Service
Everybody’s in service
Core services: done correctly, customized to
their needs, delivered on time, priced
competitively
Value-added services: make life easier, help do
jobs easier:
Information on product – data, specs
Problem solving – help internal, external customer
Sales support – demo product trying to sell
Field support – replace parts quickly
Decisions of OM
1. Quality: what do customers want?
2. Goods & Service Design: what to sell?
3. Process & Capacity Design: how to make it and how much
capacity to have? When add more? Where? How?
4. Location Selection: where to build?
5. Layout Design: how to design facilities?
Decisions of OM
6. Human Resource & Job Design: what skills and how many
people needed?
7. Supply chain management: vendor management, who use as
suppliers?
8. Inventory: how much and where?
9. Scheduling: HR, facility needs, when?
10. Maintenance: how much, when?
Current OM Issues
Flexible supply chains for mass customization of products and
services
Global supplier, production, and distribution networks
Commoditization of suppliers – “plug compatibility”
Enhancing value-added services
Maximizing use of internet to share information, coordinate
production
Continuous Improvement
IGNORE YOUR TEETH,
AND THEY’LL GO AWAY
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It used to be you had to be “good enough”
Now, you must be looking for ways to make your
customer happy, and meet their future needs
If you aren’t someone else is, and is going to take
your business
Sustainability
• Minimizing the company’s
environmental impact
• Minimize the impact of operations
• It’s the carbon, stupid
• Pollution is bad, too
• 97% of climate scientists
• As for the 3 percent of scientists who
remain unconvinced, their average
expertise is far below that of their
colleagues, as measured by
publication and citation rates