Professional Documents
Culture Documents
Chapter 1
Operations and Productivity
Learning Objectives
When you complete this chapter
you should be able to:
Organization
Heizer&Render (2014)
Example 2: Organizational Charts
Heizer&Render (2014)
Example 3: Organizational Charts
Heizer&Render (2014)
Overlap of Business Functions
Figure 1.5
Operations
Finance Marketing
Planning
Organizing
Staffing
Leading
Controlling
Ten Strategic Decisions
TABLE 1.2
DECISION CHAPTER(S)
1. Design of goods and services 5, Supplement 5
2. Managing quality 6, Supplement 6
3. Process and capacity design 7, Supplement 7
4. Location strategy 8
5. Layout strategy 9
6. Human resources and job design 10
7. Supply-chain management 11, Supplement 11
8. Inventory management 12, 14, 16
9. Scheduling 13, 15
10. Maintenance 17
Where are the OM Jobs?
Technology/methods
Facilities/space utilization
Strategic issues
Response time
People/team development
Customer service
Quality
Cost reduction
Inventory reduction
Productivity improvement
Opportunities
Scope of Operations Management
Operations Management includes:
all activities that are directly related to producing
goods (goods-oriented) or providing services (act-
oriented)
Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating and training employees
Locating facilities
Supply chain management
And more . . .
Value-Added Process
The operations function involves the conversion of inputs into
outputs
Value added
Inputs
Transformation/ Outputs
Land
Conversion Goods
Labor
process Services
Capital
Feedback
Control
Feedback Feedback
Product packages
Combination of goods production and services
delivery
In reality, relatively very few pure Goods or pure Services
Can make a company more competitive
OM more interesting and challenging
Types of Operations
Operations Examples
Goods Producing Farming, mining, construction,
manufacturing, power generation
Storage/Transportation Warehousing, trucking, mail
service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, financial
advising, renting or leasing
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and TV
newscasts, telephone, satellites
Table 1.4 Stevenson & Chuong (2014)
The GoodsService Continuum
Goods Service
Surgery, teaching
Table 1.2
Stevenson & Chuong (2014)
Manufacturing or Service?
Tangible Act
1,000
= = 4 units/labor-hour
250
0
10 15 20 25 30 35
Percentage investment
Productivity Variables: Management