Operations Management Chapter 1 Flashcards
3 functions all organizations perform to create goods & services
1) Marketing - generates the demand
2) Production/operations - creates the product
3) Finance/accounting - tracks how well the organization is doing, pays the bills and collects the money
OP
Operations Management - activities that relate to the creation of goods and services through the transformation of inputs to outputs
Why study OM
1) how people organize themselves for productive enterprise
2) to know how goods and services are produced
3) to understand what operations managers do
4) because it is such a costly part of an organization
Management Process
1) Planning
2) Organizing
3) Staffing
4) Leading
5) Controlling
10 OM Decisions
1) Design of goods and services
2) Managing quality
3) Process & capacity design
4) Location strategy
5) Layout strategy
6) Human resources and design
7) Supply chain management
8) Inventory, material requirements planning, and JIT (Just In Time)
9) Intermediate and short term scheduling
10) Maintenance
Eras
Early Concepts 1776 - 1880 Scientific Management Era 1880 - 1910 Mass Production Era 1910 - 1980 Lean Production Era 1980 - 1995 Mass Customization Era 1995 - 2015
Eli Whitney
Early popularization of interchangeable parts
Frederick W. Taylor
Father of scientific management
Henry Ford
&
Charles Sorensen
Combined what they knew about standardized parts with the quasi-assembly lines of meatpacking and mail order industries and added the revolutionary concept of the assembly line, where men stood still and material moved.
Services
1) interchangeable
2) produced and consumed simultaneously
3) unique
4) high customer interaction
5) inconsistent product definition
6) knowledge based
7) dispersed
OM Challenges
1) Ethics
2) Global Focus
3) Rapid Product Development
4) Environmentally sensitive production
5) Mass customization
6) Empowered Employees
7) Supply chain partnering
8) Just-in-time performance
Productivity
The ratio of outputs divided by one or more inputs
Single-factor productivity
Productivity = Units Produced / Labor hours used
Multifactor Productivity
Productivity = Output / [Labor + Material + Energy + Capital + Misc]
Measurement Problems
Quality may change while the quantity of inputs and outputs remain consistent
External elements may cause an increase/decrease in productivity for which the system under study is not directly responsibility
Precise units of measure may be lacking
3 Productivity Variables
1) Labor, 10% annual increase in productivity
2) Capital, 38% annual increase in productivity
3) Management, 52% annual increase in productivity
Knowledge Society
A society in which much of the labor force has migrated from manual work to work based on knowledge.
Reasons Productivity of the Service Sector is difficult to improve…
1) Typically labor intensive
2) Frequently focused on unique individual attributes or desires
3) Often an intellectual task performed by professionals
4) Often difficult to mechanize and automate
5) Often difficult to evaluate for quality
Ethical Challenges
1) Efficiently developing and producing safe, quality products
2) maintaining a sustainable environment
3) Providing a safe workplace
4) Honoring stakeholder commitments
Product focus strategy
high-volume, low-variety
Supply chain
A global network of organizations and activities that supply a firm with goods and services
A large percentage of the revenue of most firms is spent on what function?
Operations
