Chapter 1 Objectives:
a. Finance: 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.
b. Marketing: responsible for assessing consumer wants and needs, and selling and promoting the organizations goods and services.
c. Operations: management of systems or processes that create goods and/or provide services.
Service:
low percentage of goods, High percentage service, intangible output
Manufacturing: high percentage of goods, low percentage service, tangible output
Differences:
Degree of customer Contact
Uniformity of input
Labor contents of job
Uniformity of output
Measurement of productivity
Production and delivery
Quality Assurance
Amount of inventory
What is the nature of the Operation Manager’s job? (9): The primary function of the operation manager is to guide the system by decision making. He/she is the key figure in the system: he or she has the ultimate responsibility for the creation of goods or provision of services.
The design of a production system includes long-range capacity, process selection, layout, design of work systems, and location.
The operations of a production system include quality control, aggregate planning, inventory management, materials requirement planning, scheduling, supply chain management, and project management. *See Table 1.5 for more information*
What: What
resources will be needed, and in what amounts? How will resources
be allocated?
When: When will each resource be
needed? When should the work be scheduled? When should supplies be
ordered? When is corrective action
needed?
Where: Where will the work be done?
How: How will the product/service be
designed? How will the work be done (organization, methods, equipment)?
Who: Who will do the work?
During the industrial revolution (1770s), goods were produced in small shops by craftsmen and their apprentices. In the 18th century a number of innovations substituted machine power for human power (steam engine). The development of the gauging system gave the industrial revolution a boost, reducing the need for custom made goods. The scientific management era brought Fredrick Taylor’s methods to light. He studied work methods of work to identify the best method for doing each job. His method’s emphasized maximizing output. In the early 10th century, mass production, interchangeable parts, and division of labor maximized output in the automobile industry as well as others. The human relations movement emphasized the importance of the human element in job design. Managers became aware of the idea that worker motivation is critical to improve productivity. **See Table 1.7 on page 22 for timeline**
Although different organizations have different priorities, and are affected differently by trends, major trends that impact operations management are:
The internet, ecommerce, e business
Management of technology
Globalization
Management of supply chains
Agility