Welcome
to
Introduction to Operations Management
(SCMA2OM)
Module
7/30/2023
Dr C.Chikandiwa
1
Introduction to Operations
Management (SCMA2OM)
Session 1
Dr Christopher Chikandiwa
7/30/2023
Dr C.Chikandiwa
2
Which organisations/
companies do you want to
work for?
7/30/2023
Dr C.Chikandiwa
3
Organisations/companies ...
7/30/2023
Dr C.Chikandiwa
4
What do you know about
Operations Management?
7/30/2023
Dr C.Chikandiwa
5
First Impressions ...
7/30/2023
Dr C.Chikandiwa
6
Session 1: Process View
Key learning
After following this session you will...
•... think of a company in terms of the processes it covers.
•... understand why customer value is important and know how to measure it.
7/30/2023
Dr C.Chikandiwa
7
The operations function
Definition
•
Operations management is „
the direction and control of the processes that transform inputs into
products and services“.
•Inputs
Materials
Labor
Energy
Capital
(Krajewski and Ritzman 2002, p. 6)
Transformation
Production/
Conversion
Process
•Information System
C.T
Outputs
Products
Services
A more comprehensive view on
Operations Management (OM)
Traditional view: optimization
Modern view: improvement
Product-/ Process-Management
Inventory
Quality
Capacity
output = f(input)
Input
OM
Output
Supplier
OM
Customer
Information
Time
Partnering/ Collaboration
C.T
Lets Get Started
7/30/2023
Dr C.Chikandiwa
10
Course Overview/ Outline
Session
One
Topic
Outline of the course and Relevance of Operations
Management
Two
Three
Four
Five
Six &
Seven
Eight &
Nine
10,11,
12&13
Review Session; Revision
7/30/2023
Dr C.Chikandiwa
11
Course Overview/ Outline
Session
Topic
Prescribed Text
One
Outline of the course and Relevance of Operations Management
Two
Operations
Three
Process Design
Chapter 4
Four
Nature of planning & Control & Capacity Management
Chapters10 & 11
Five
Inventory management
Chapter 12
Six
Supply chain management
Chapter 13
Seven
MRP & ERP
Chapters 14
Eight
Lean Management
Chapter 15
Nine
Project Management
Chapter 16
Ten
Quality Management & TQM
Chapter 17
Eleven
Operations Improvement
Chapter 18
Review Session
Review Session
Management
& Strategy
Chapter 1 - 3
7/30/2023
Dr C.Chikandiwa
12
Introduction to Operations Management
Expected Outcomes
 Discipline-specific knowledge, global business environment
and
competence – Gaining an appreciation of the role of operations
management in organisations.
 Teamwork
and
responsible
leadership
–
Gaining
leadership
competences from the joint developing of case study solutions
 Critical thinking and problem solving skills – Getting new
perspectives on operation and supply chain management issues from
class discussions with fellow students sharing work experiences
7/30/2023
Dr C.Chikandiwa
13
Contacts|
Facilitator: Dr CT Chikandiwa
Office Number: M1-318
Email: chikandiwa@ukzn.ac.za
Phone: 031 260 8882
Administrative Officer: V Rushin
Office M-236, M Block
Tel: 031 260 3281
Email: rushinv@ukzn.ac.za
Email all administrative queries to V Rushin.
7/30/2023
Dr C.Chikandiwa
14
Etiquette
 Reliability – Engagement, presence and timeliness are key pre-requisites
 Diversity – Take the opportunity to learn from each other
 Respect – for your colleagues and lecturers
 Trust – Confidentiality
 Enthusiasm – Enjoy the course, take part, try new ideas
 Professionalism – Behavior on highest standards
 Disturbances – Cell phone, Smart Phones etc. only during the break.!
7/30/2023
Dr C.Chikandiwa
15
OPERATIONS
MANAGEMENT
Managing business operations…......
Manufacturing
Distribution
Transportation
Services
7/30/2023
Dr C.Chikandiwa
16
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
7/30/2023
Dr C.Chikandiwa
17
What is operations management?
Operations Management focuses on the effective management of the
resources and activities that produce and deliver the goods and services of a
business.
» Resources
– People, materials, equipment, information
» Activities/Processes
– Manufacturing, distribution, transportation, purchasing,
planning, scheduling, services, transaction processing, etc.
7/30/2023
Dr C.Chikandiwa
18
Operations management defined
Operations management is the activity of
managing the resources which are devoted
to the production and delivery of products
and services.
7/30/2023
Dr C.Chikandiwa
19
The best way to start understanding the nature of ‘operations’ is
to look around you
Everything you can see around you (except the flesh and blood)
has been processed by an operation
Every service you consumed today (radio station, bus service,
lecture, etc.) has also been produced by an operation
Operations Managers create everything you buy, sit on, wear, eat,
throw at people, and throw away
7/30/2023
Dr C.Chikandiwa
20
Back office operation in
a bank
Kitchen unit
manufacturing
operation
They are all
operations
Retail operation
Take-out / restaurant
operation
7/30/2023
Dr C.Chikandiwa
21
The input-transformation-output model:
TRANSFORMED
RESOURCES
MATERIALS
INFORMATION
CUSTOMERS
INPUT
TRANSFORMATION
PROCESS
OUTPUT
GOODS
AND
SERVICES
TRANSFORMING
RESOURCES
FACILITIES
STAFF
7/30/2023
Dr C.Chikandiwa
22
Operations in the Service Sector
Operation in a bank
7/30/2023
Dr C.Chikandiwa
23
Characteristics of Good & Services
Goods
 Tangible product
 Consistent product definition
 Production usually separate from
consumption
 Can be inventoried
 Low customer interaction
7/30/2023
Services
 intangible product
 Produced and consumed at the same
time
 Often unique
 High customer interaction
 Inconsistent product definition
 Often knowledge based
 Frequently dispersed
Dr C.Chikandiwa
24
Goods Versus Services
Goods
 Can be resold
 Can be inventoried
 Some aspects of quality measurable
 Selling is distinct from production
 Product is transportable
Services
 Reselling unusual
 Difficult to inventory
 Quality difficulty to measure
 Selling is part of service
 Provider, not product is transportable
7/30/2023
Dr C.Chikandiwa
25
Goods Versus Services- continued
Goods
 Site of facility important for cost
 Often easy to automate
 Revenue generated primarily from
tangible product
7/30/2023
Services
 Site of facility important for customer
contact
 Often difficult to automate
 Revenue generated primarily from
intangible service
Dr C.Chikandiwa
26
Organisational Functions
PERSONNEL
PURCHASING
OPERATIONS
FUNCTIONS
ENGINEERING
7/30/2023
ACCOUNTING
AND FINANCE
Dr C.Chikandiwa
MARKETING
PRODUCT
DEVELOPMENT
27
Why Study OM?
 OM is one of four major functions (marketing, finance, human and operations) of any
organization.
 We want (and need) to know how goods and services are produced.
 We want to understand what operations managers do.
 OM is such a costly part of an organization.
7/30/2023
Dr C.Chikandiwa
28
Problems OM`s Solve
• Supply Chain/Distribution Network Design
• Production/Inventory Control
»global supply chain
• Transportation Operations
» Vehicle Routing, Fleet Management
• Resource Optimization
» Labor, equipment, space
• Reduce Wait Time
» Emergency Room, Amusement Park
7/30/2023
Dr C.Chikandiwa
29
Problems OM`s Solve
• Facility Design and Layout
» Plant, warehouse, store
• Cost Analysis
» Operations, Marketing, Budgeting
• Process Analysis
» Eliminate, transfer, automate, simplify, combine
• Information Systems Development and Implementation
7/30/2023
Dr C.Chikandiwa
30
New challenges in OM
From
 Local or national
focus
 Batch shipments
 Low bid purchasing
 Length product
development
 Standard products
 Job specialisation
7/30/2023
Dr C.Chikandiwa
To
 Global focus
 Just-in-time
 Supply chain
partnering
 Rapid product
development,
alliance
 Mass customisation
 Empowered
employees, teams
31
Characteristics of OM`s
• A drive to make organisations and activities run smoothly and efficiently
• Communication skills
• Problem solving skills
• Math/ analytical skills
7/30/2023
Dr C.Chikandiwa
32
Introduction to Operations Management
To be a great operations manager you need to...
 Enjoy getting things done – operations management is about doing things.
 Understand customer needs – operations management is about understanding what
‘value’ means for customers.
 Communicate and motivate – operations managers must be ‘people people’.
 Learn all the time – operations management is about learning, because without learning
there can be no improvement.
 Commit to innovation – operations management is about being creative, imaginative, and
(sometimes) unconventional.
 Know your contribution – operations management is about contributing to the effective
working of other functions.
 Be capable of analysing – operations management is about evaluating decisions.
 Keep cool under pressure – operations managers need to be able to remain calm no
matter what problems occur.
7/30/2023
Dr C.Chikandiwa
33
Homework
• Discuss what quality, speed, dependability and flexibility could mean in
the following operations:
a) Restaurant
b) Hospital
c) Bus company
7/30/2023
Dr C.Chikandiwa
34
Q&A
30.07.2023
35
THANK YOU
30.07.2023
36
Back up!
30.07.2023
37
OM History
•
•
•
•
Interchangeable parts - Eli Whitney
» Muskets ~ 1793
Specialization of labor - Charles Babbage
» Early European manufacturing ~ 1835
Time, motion, and work methods
» Frederick Taylor 1881
» Frank Gilbreth 1885
Moving assembly lines - Henry Ford
» Automobiles ~ 1900
7/30/2023
Dr C.Chikandiwa
38
OM History
•
WW-II
» Optimization of military and transport operations
» Radar coverage, antiaircraft systems, submarine
• and ship search and detection, convoy size and U-boat evasion,
deployment of mines, depth charge setting
• 1970’s –1980’s: continuous quality improvement and global
competitiveness
• 1990’s: supply chain design, e-Commerce
7/30/2023
Dr C.Chikandiwa
39
OM History
•
Industrial Management (IM)
» Prior to 1947: College of Engineering
» 1947-1971: Industrial Management Option within the Management
program
» 1972-2002: Industrial Management Major
• Operations Management (OM)
» 2002-Present: OM Major
7/30/2023
Dr C.Chikandiwa
40