Operations Management

Models are beneficial because they:

-Are generally easy to use and less expensive than dealing directly with the actual situation. -Require users to organize and sometimes quantify information and, in the process, often indicate areas where additional information is needed. -Increase understanding of the problem. -Enable managers to analyze what-if questions. -Serve as a consistent tool for evaluation and provide a standardized format for analyzing a problem. -Enable users to bring the power of mathematics to bear on a problem.

supply chain manager

-Have a general knowledge of materials management, information systems, and basic statistics. -Direct, monitor, evaluate, and motivate employee performance. -Be knowledgeable about shipping regulations. -Manage budgetary accounts -Manage projects

Social media product manager

-Identify ways to increase consumer engagement. -Analyze the key performance indicators and recommend improvements. -Lead cross-functional teams to define product specifications. -Collaborate with design and technical to create key product improvements. -Develop requirements for new website enhancements. -Monitor the competition to identify need for changes.

Production Supervisor

-Manage a production staff of 10-20. -Ensure the department meets daily goals through the management of productivity. -Enforce safety policies. -Coordinate work between departments. -Have strong problem-solving skills, and strong written and oral communication skills.

Three limitations of models:

-Quantitative information may be emphasized at the expense of qualitative information. -Models may be incorrectly applied and the results misinterpreted. The widespread use of computerized models adds to this risk because highly sophisticated models may be placed in the hands of users who are not sufficiently knowledgeable to appreciate the subtleties of a particular model; thus, they are unable to fully comprehend the circumstances under which the model can be successfully employed. -The use of models does not guarantee good decisions.

four basic sources of variation

1. Variety of goods or services being offered 2. Structural variation in demand 3. Random variation 4. Assignable variation

______________ supplies information to management on costs of labor, materials, and overhead, and may provide reports on items such as scrap, downtime, and inventories.

Accounting

_______________ supplies information to management on costs of labor, materials, and overhead, and may provide reports on items such as scrap, downtime, and inventories.

Accounting

Finance and operations management personnel cooperate by exchanging information and expertise in such activities as:

Budgeting. Budgets must be periodically prepared to plan financial requirements. Budgets must sometimes be adjusted, and performance relative to a budget must be evaluated. Economic analysis of investment proposals. Evaluation of alternative investments in plant and equipment requires inputs from both operations and finance people. Provision of funds. The necessary funding of operations and the amount and timing of funding can be important and even critical when funds are tight. Careful planning can help avoid cash-flow problems.

Points of comparison between manufacturing and service:

Degree of customer contact. Many services involve a high degree of customer contact, although services such as Internet providers, utilities, and mail service do not. When there is a high degree of contact, the interaction between server and customer becomes a "moment of truth" that will be judged by the customer every time the service occurs. Labor content of jobs. Services often have a higher degree of labor content than manufacturing jobs do, although automated services are an exception. Uniformity of inputs. Service operations are often subject to a higher degree of variability of inputs. Each client, patient, customer, repair job, and so on presents a somewhat unique situation that requires assessment and flexibility. Conversely, manufacturing operations often have a greater ability to control the variability of inputs, which leads to more-uniform job requirements. Measurement of productivity. Measurement of productivity can be more difficult for service jobs due largely to the high variations of inputs. Thus, one doctor might have a higher level of routine cases to deal with, while another might have more difficult cases. Unless a careful analysis is conducted, it may appear that the doctor with the difficult cases has a much lower productivity than the one with the routine cases. Quality assurance. Quality assurance is usually more challenging for services due to the higher variation in input, and because delivery and consumption occur at the same time. Unlike manufacturing, which typically occurs away from the customer and allows mistakes that are identified to be corrected, services have less opportunity to avoid exposing the customer to mistakes. Inventory. Many services tend to involve less use of inventory than manufacturing operations, so the costs of having inventory on hand are lower than they are for manufacturing. However, unlike manufactured goods, services cannot be stored. Instead, they must be provided "on demand." Wages. Manufacturing jobs are often well paid, and have less wage variation than service jobs, which can range from highly paid professional services to minimum-wage workers. Ability to patent. Product designs are often easier to patent than service designs, and some services cannot be patented, making them easier for competitors to copy.

Primary factors between managing the production of products and managing services:

Forecasting and capacity planning to match supply and demand Process management Managing variations Monitoring and controlling costs and productivity Supply chain management Location planning, inventory management, quality control, and scheduling

Supporting functions of operations

Legal, Public relations, accounting, MIS, Personnel/Human Resources

Physical models

Look like their real-life counterparts

_____________________ is concerned with providing management with the information it needs to effectively manage. This occurs mainly through designing systems to capture relevant information and designing reports. MIS is also important for managing the control and decision-making tools used in operations management.

Management information systems (MIS)

______________ must work closely together to successfully implement design changes and to develop and produce new products.

Marketing, design, and production

_______________ also interacts with other functional areas of the organization, including legal, management information systems (MIS), accounting, personnel/human resources, and public relations.

Operations

____________processes that either provide services or create goods.

Operations

The role of operations in a business include

Operations is what businesses do. Operations are processes that either provide services or create goods. Operations take place in businesses such as restaurants, retail stores, supermarkets, factories, hospitals, and colleges and universities. In fact, they take place in every business organization. Moreover, operations are the core of what a business organization does.

___________ and ______ are the two line functions in a business organization.

Operations, sales

______________ is responsible for building and maintaining a positive public image of the organization. Good public relations provides many potential benefits. An obvious one is in the marketplace. Other potential benefits include public awareness of the organization as a good place to work (labor supply), improved chances of approval of zoning change requests, community acceptance of expansion plans, and instilling a positive attitude among employees.

Public relations

__________ approaches to problem solving often embody an attempt to obtain mathematically optimal solutions to managerial problems.

Quantitative

___________ are both external and internal to the organization.

Supply Chains

________________ choices can have a major impact on productivity, costs, flexibility, and quality and customer satisfaction.

Technology

The variety of goods or services being offered.

The greater the variety of goods and services offered, the greater the variation in production or service requirements.

Operations Management

The management of systems or processes that create goods and/or provide services

Upper-management processes

These govern the operation of the entire organization. Examples include organizational governance and organizational strategy.

Supporting processes

These support the core processes. Examples include accounting, human resources, and IT

assignable variation

These variations are caused by defective inputs, incorrect work methods, out-of-adjustment equipment, and so on. This type of variation can be reduced or eliminated by analysis and corrective action.

Structural variation in demand

These variations, which include trends and seasonal variations, are generally predictable. They are particularly important for capacity planning.

random variation

This natural variability is present to some extent in all processes, as well as in demand for services and products, and it cannot generally be influenced by managers.

Three categories of business processes:

Upper-management processes, Operational processes, Supporting processes

Operations management professionals make a number of key decisions that affect the entire organization. These include the following:

What: What resources will be needed, and in what amounts? When: When will each resource be needed? When should the work be scheduled? When should materials and other supplies be ordered? When is corrective action needed? Where: Where will the work be done? How: How will the product or service be designed? How will the work be done (organization, methods, equipment)? How will resources be allocated? Who: Who will do the work?

The essence of the operations function is to:

add value during the transformation process

Variations result in:

additional cost, delays and shortages, poor quality, and inefficient work systems.

Delivery of service generally implies what?

an act

A tangible output is....

anything that we can see or touch

Services

are activities that provide some combination of time, location, form, or psychological value

Schematic models

are more abstract than their physical counterparts; that is, they have less resemblance to the physical reality.

mathematical model

are the most abstract: They do not look at all like their real-life counterparts

Ideally, the ______ of a process will be such that its output just matches demand.

capacity

Various inputs such as ________ are used to create goods or services using one or more transformation processes.

capital, labor, and information

process

consists of one or more actions that transform inputs into outputs

__________ involves the shipping of goods to warehouses, retail outlets, or final customers.

distribution

__________ is responsible for securing financial resources at favorable prices and allocating those resources throughout the organization, as well as budgeting, analyzing investment proposals, and providing funds for operations.

finance

Three basic functional areas of business organizations are:

finance, marketing, and operations

Service jobs that are closely related to operations are:

financial, marketing, accounting, and information

In _____________ organizations, the value of outputs is measured by the prices that customers are willing to pay for those goods or services.

for-profit

The operations function includes many interrelated activities, such as:

forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities, and more.

Functions and activities include:

forecasting, purchasing, inventory management, information management, quality assurance, scheduling, production, distribution, delivery, and customer service.

_____________ are physical items that include raw materials, parts, subassemblies such as motherboards that go into computers, and final products such as cell phones and automobiles

goods

Operations produce ________.

goods and services

The _________ the degree of customer involvement, the more challenging it can be to design and manage the operation.

greater

A primary function of an operations manager is to...

guide the system by decision making

purchasing

has responsibility for procurement of materials, supplies, and equipment.

___________ is often concerned with scheduling, performance standards, work methods, quality control, and material handling.

industrial engineering

System Design

involves decisions that relate to system capacity, the geographic location of facilities, arrangement of departments and placement of equipment within physical structures, product and service planning, and acquisition of equipment

System Operation

involves management of personnel, inventory planning and control, scheduling, project management, and quality assurance

model

is an abstraction of reality, a simplified representation of something.

supply chain

is the sequence of organizations—their facilities, functions, and activities—that are involved in producing and delivering a product or service.

Value-added

is the term used to describe the difference between the cost of inputs and the value or price of outputs.

One important piece of information marketing needs from operations is the manufacturing or service ___________ in order to give customers realistic estimates of how long it will take to fill their orders.

lead time

The ______ department must be consulted on contracts with employees, customers, suppliers, and transporters, as well as on liability and environmental issues.

legal

The ________ department must be consulted on contracts with employees, customers, suppliers, and transporters, as well as on liability and environmental issues.

legal

_______________ is responsible for general upkeep and repair of equipment, buildings and grounds, heating and air-conditioning; removing toxic wastes; parking; and perhaps security.

maintenance

________ is responsible for assessing consumer wants and needs, and selling and promoting the organization's goods or services.

marketing

Managers use __________ to manage and control operations.

metrics

Facilities of supply chain

might include warehouses, factories, processing centers, offices, distribution centers, and retail outlets.

In ______________ organizations, the value of outputs (e.g., highway construction, police and fire protection) is their value to society; the greater the value-added, the greater the effectiveness of these operations.

nonprofit

Marketing's focus is on...

on selling and/or promoting the goods or services of an organization. Marketing is also responsible for assessing customer wants and needs, and for communicating those to operations people (short term) and to design people (long term).

________ is responsible for producing the goods or providing the services offered by the organization. It is considered the core of what the organization does.

operations

The __________ is the key figure in the system: He or she has the ultimate responsibility for the creation of goods or provision of services.

operations manager

The ___________ department is concerned with recruitment and training of personnel, labor relations, contract negotiations, wage and salary administration, assisting in manpower projections, and ensuring the health and safety of employees.

personnel or human resources

Models are sometimes classified as...

physical, schematic, or mathematical

The chief role of an operations manager is that of....

planner and decision maker

the central role of all management is ____________.

process management

Operations management people are involved in...

product and service design, process selection, selection and management of technology, design of work systems, location planning, facilities planning, and quality improvement of the organization's products or services.

The ______________ is often called on to evaluate vendors for quality, reliability, service, price, and ability to adjust to changing demand.

purchasing department

To ensure that the desired outputs are obtained, an organization does what?

takes measurements at various points in the transformation process (feedback) and then compares them with previously established standards to determine whether corrective action is needed (control)

Production of goods results in a ___________.

tangible output

Operational processes

these are core processes that make up the value stream. Examples include purchasing, production and/or service, marketing, and sales.

Operations personnel frequently encounter decisions that can be described as ________ decisions.

trade-off

The creation of goods or services involves:

transforming or converting inputs into outputs.

True or False: Excess capacity is wasteful and costly; too little capacity means dissatisfied customers and lost revenue. Having the right capacity requires having accurate forecasts of demand, the ability to translate forecasts into capacity requirements, and a process in place capable of meeting Page 14expected demand.

true

true or false: Close contact with operations is necessary to ensure correct quantities and timing of purchases.

true

Operations are the core of....

what a business organization does