PRODUCTION & OPERATIONS

MANAGEMENT
INTRODUCTION TO
OPERATIONS
MANAGEMENT

 Operations Management
Operations management deals with process that
produce goods and services
or
Operations management refers to the directions and
control of the processes that converts input into
output

Processes are the fundamental activities that

organizations use to do work and achieve their goals.

What Operations and Supply Chain

Managers Do
What is Operations Management?
design, operation, and improvement of productive systems

What is Operations?
a function or system that transforms inputs into outputs of greater
value

What is a Transformation Process?

a series of activities along a value chain extending from supplier
to customer
activities that do not add value are superfluous and should be
eliminated

Copyright 2011 John Wiley & Sons, Inc.

1-3

Operations as a
Transformation Process
INPUT
Material
Machines
Labor
Management
Capital

TRANSFORMATION
PROCESS

OUTPUT
Goods
Services

Feedback & Requirements

Copyright 2011 John Wiley & Sons, Inc.

1-4

Operations Function
Operations
Marketing
Finance and
Accounting
Human
Resources
Outside
Suppliers

Copyright 2011 John Wiley & Sons, Inc.

1-5

Historical Events in
Operations Management
Era
Industrial
Revolution

Scientific
Management

Events/Concepts

Dates

Originator

Steam engine
Division of labor
Interchangeable parts
Principles of scientific

1769
1776
1790

James Watt

1911

Frederick W. Taylor

Time and motion studies

1911

Frank and Lillian

Gilbreth

Activity scheduling chart

1912

Henry Gantt

Moving assembly line

1913

Henry Ford

management

Copyright 2011 John Wiley & Sons, Inc.

Adam Smith
Eli Whitney

1-6

Historical Events in
Operations Management
Era
Human
Relations

Operations
Research

Events/Concepts

Dates

Originator

Hawthorne studies

1930
1940s
1950s
1960s
1947
1951

Elton Mayo
Abraham Maslow
Frederick Herzberg
Douglas McGregor
George Dantzig
Remington Rand

1950s

Operations research
groups

Motivation theories
Linear programming
Digital computer
Simulation, waiting
line theory, decision
theory, PERT/CPM
MRP, EDI, EFT, CIM

Copyright 2011 John Wiley & Sons, Inc.

1960s,
1970s

Joseph Orlicky, IBM

and others
1-7

Historical Events in
Operations Management
Era

Events/Concepts

Dates Originator

JIT (just-in-time)
TQM (total quality

1970s

Quality

management)
Strategy and

Revolution

operations

1980s
1980s

Reengineering

1990s

Six Sigma

1990s

Copyright 2011 John Wiley & Sons, Inc.

Taiichi Ohno (Toyota)

W. Edwards Deming,
Joseph Juran
Wickham Skinner,
Robert Hayes
Michael Hammer,
James Champy
GE, Motorola

1-8

Historical Events in
Operations Management
Era

Events/Concepts

Dates Originator

Internet
Revolution

Internet, WWW, ERP,

1990s
supply chain management

ARPANET, Tim
Berners-Lee SAP,
i2 Technologies,

E-commerce

Globalization

WTO, European Union,

Global supply chains,
Outsourcing, Service
Science

Copyright 2011 John Wiley & Sons, Inc.

2000s

1990s
2000s

ORACLE, Dell
Amazon, Yahoo,
eBay, Google, and
others
China, India,
emerging
economies
1-9

Historical Events in
Operations Management
Era

Events/Concepts

Dates Originator

Green
Revolution

Global warming, An
Inconvenient Truth, Kyoto

Today

Copyright 2011 John Wiley & Sons, Inc.

Numerous
scientists,
statesmen and
governments

1-10

Productivity and Competitiveness

Competitiveness

degree to which a nation can produce goods and

services that meet the test of international markets

Productivity

ratio of output to input

Output

sales made, products produced, customers served,

meals delivered, or calls answered

Input

labor hours, investment in equipment, material usage,

or square footage

Copyright 2011 John Wiley & Sons, Inc.

1-11

Measures of Productivity

Copyright 2011 John Wiley & Sons, Inc.

1-12

Osborne Industries

C6*C8
C7*C9
C5/C6
C5/C7
C5/C13
Copyright 2011 John Wiley & Sons, Inc.

1-13