CHAPTER 1

INTRODUCTION TO THE FIELD

Review and Discussion Questions
1.

What is the difference between OM and OR/MS? Between OM and IE?

Operations Management (OM) is a synthesis of concepts and techniques that relate directly to production
systems and enhance their management. Operations Management has a distinct management role that
differentiates it from OR and IE. Operations Managers use the tools of OR in decision making and are
concerned with many of the same issues as Industrial Engineers. Operations Research/Management
Science (OR/MS) is a branch of applied mathematics, while Industrial Engineering (IE) is an engineering
discipline.
2.

How would you distinguish OM from management and organizational behavior as taught at your
university?

Management and organizational behavior is concerned with the formulation of corporate strategic policy.
Operations Management is concerned with the operations strategy, which specifies how the firm will
employ its production capabilities to support its corporate strategy.
3.

Take a look at the want ads in The Wall Street Journal and evaluate the opportunities for an OM major
with several years of experience.

The following are some examples of jobs available to OM graduates with several years of experience from
the Wall Street Journal, January 18, 2000.

Chapter 1
Some additional advertisements.

4.

What factors account for the resurgence of interest in OM today?

With the expanding objectives of productive systems combined with increased applications to services and
increased efficiency of Japanese producers, there is increased interest in nuts and bolts issues.
5. Using Exhibit 1.2 as a model, describe the input-transformation-output relationships found in the
following systems:
a. An airline
Inputs: passengers
Components: planes, crews, equipment, terminals
Primary functions: transportation
Output: satisfied, safe customers
b.

A state penitentiary
Inputs: criminals
Components: legal system, physical plant (prison), guards and support staff
Primary functions: segregation of prisoners from society, punishment, rehabilitation
Output: reformed society members

c.

A branch office of a bank

Inputs: customers
Components: tellers, bank officers, teller windows, systems
Primary functions: deposit and withdrawal handling, loan initiation, storing money and valuables
Output: satisfied customers, positive return on loan ratios

d.

The home office of a major banking firm

Inputs: paperwork from customers and other institutions
Components: loan underwriters, clerks, computer systems
Primary function: record-keeping, loan processing, coordinating cash flows
Output: satisfied customers, sound investment portfolios

Introduction to the Field

6.

Sketch the production-delivery system used by CMAX.com Solemates, Inc. in providing the custom
tennis shoes. Could this approach be applied to other consumer goods? Give examples.

Customer visits
Website

Consumer orders
for custom shoes

Promotional Footwear
Orders (>30 pairs)

Manufacturing
of shoes in China

Manufacturing
of shoes in China

UPS Delivery
2~4 weeks Leadtime

UPS Delivery
6~8 weeks Leadtime

This charts the flow of the CMAX.com Solemates, Inc.s production system. The production process
combines mass production capability with high customization. This is possible in part due to the use of
flexible manufacturing. The needs and wants of the customer are considered at every step of the process.
This approach can be applied in a large number of industries. However, the approach seems most
appropriate in recreational consumer goods and products requiring high customization. Many production
companies have high volume and low volume lines. Many low volume production facilities could learn
from the CMAX.com Solemates, Inc..
7.

Suppose that Rolling Stone presented the following headlines relating to OM.
historical events or individuals would they be referring to?

What particular

OVER 5 BAZILLION SOLD TO DATE--Refers to McDonald's and their unique approach to quality and
productivity that stands as a reference point for delivering high-volume standardized services.
BEANTOWN B-SCHOOL DISCOVERS YOU CAN'T HAVE IT ALL---Refers to Harvard professors
William Abernathy, Kim Clark, Robert Hays, and Steven Wheelwright and the emphasis on a
manufacturing strategy based on tradeoffs among performance measures.
INVENTORYOH NO!Taichi Ohnos successful implementation of the Just-In-Time philosophy at
Toyota Motors in the early 1980s, dramatically decreased inventory levels.
BUSINESSES USE A BIG HAMMER TO FORCE CHANGE--Michael Hammer pushed companies to
become lean by seeking innovations in processes by which they run their operations. This approach
became know as business process reengineering (BPR).
FAST HENRY BECOMES MARVEL OF MOTOWN--This refers to Henry Ford as the first to develop a
highly integrated, efficient production system.
EXECS FOLLOW GURUS RECIPE FOR BIG Q STEWRefers to quality gurus such as W. E. Deming,
Joseph Juran, Armand Feigenbaum and Philip Crosby.

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10 BILLION FAX MACHINES DUMPED IN THE OCEAN--Refers to the obsolescence of the fax
machine with the widespread adoption of the World Wide Web (WWW) and the Internet in general for
business communications.
"THE CHAIN GANG" MOVES TO TOP OF THE CHARTS--Supply chain management has emerged an
important aspect of business.