Chapter 1 - Introduction to
Operations Management
Operations Management
by
R. Dan Reid & Nada R. Sanders
2nd Edition © Wiley 2005
PowerPoint Presentation by R.B. Clough - UNH
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What is Operations Management?
The business function responsible for
planning, coordinating, and
controlling the resources needed to
produce a company’s products and
services
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Typical Organization Chart
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Business Information Flow
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OM’s Transformation Role
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Productivity
Outputs
P
Inputs
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Differences between Manufacturers
and Service Operations
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Services:
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Intangible product
Service cannot be
inventoried
High customer contact
Short response time
Labor intensive
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Manufacturers:
Tangible product
Product can be
inventoried
Low customer contact
Longer response time
Capital intensive
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Service and Manufacturers
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All use technology
Both have quality, productivity, & response
issues
All must forecast demand
Each will have capacity, layout, and location
issues
All have customers and suppliers
All have scheduling and staffing issues
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Trends in OM
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Service sector growing
to 80% of non-farm
jobs- See Figure 1-4
Global operations
Demands for higher
quality
Huge technology
changes
Time based competition
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OM Decisions
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Operations Management
Decisions
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Strategic:
Product/Service
Design
Process Selection
Capacity Planning
Facility Location
Facility Layout
Job Design
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Tactical:
Quality Control
Demand Forecasting
Supply Chain
Management
Production Planning
Inventory Control
Scheduling
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