INTRODUCTION TO OPERATIONS MANAGEMENT
I. What is operations management?
-- Operation: the creation of goods and services
-- Elements of the operations system:
 Inputs
 Transformation Process
 Outputs
 Feedback
-- Operations Management: systematic planning, directing, and
controlling of the transformation process
-- Differences between production and service
 Tangible products
 Make to stock
 For sale
 Physical transform
 Large geographical market
 Low customer contact
 Capital intensive
 Easier quality measurement
II. History of OM
 Industrial revolution (1770’s-90’s)– steam engine, division
of labor, interchangeable parts
 Scientific management (1910’s)– time and motion studies,
Gantt chart, coordinated assembly line
 Human relations movement (1930’s-60’s) – work environment,
employer-employee relationship, motivation theories
 Management science (1947-60’s) – linear program, simulation,
waiting line theory, decision theory, PERT/CPM, MRP
 Japanese production system (1970’s-80’s) – Lean production,
JIT, TQM
 Computer in OM (1970's - )- CAD/CAM, FMS, CIM
 New challenges in OM - the service economy, environment
awareness
-- Recent Trend
 Global Marketplace
 Total Quality Management, Worker Involvement
 Corporate Downsizing, Business Reengineering, Lean Production
 Flexibility, Time Reduction
 Technology
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Environmental Issues
Supply-chain Management
Outsourcing
III. Why study OM?
-- Three major functions of any organization:
 Marketing - create demand, identify markets, etc.
 Finance/Accounting - track performance, pay bills, collect
revenue, etc
 Operations - create products
-- To find out HOW goods and services are created.
-- Operations cost the most for any organization
-- To examine career opportunities in OM.
IV. The productivity challenge and OM
-- Definition:
-- Can be difficult to measure, especially for service industry
-- Productivity increases improve standard of living
-- Productivity variables:
 Labor – health, skill, education, training, knowledge
 Capital – investment in equipment and technology
 Management – effective use of labor, capital, and technology
-- Factors that affect the US productivity growth:
 Education
 Capital and technology investment
 The service sector
-- Components of OM Mission and Strategy
Quality management
Process design
Layout
Purchasing
Inventory
V. OM Related Jobs
Product design
Location
Human resources and job design
Scheduling
Reliability and maintenance