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Ch 1 - Operations and Productivity

  1. What is Operations Management? (p4 - short for page 4)
    1. Product - general term for either a good or service
    2. Production - the creation of goods and services
    3. Operations management - activities that create products by transforming inputs into outputs
  2. Why Study OM?   (following not in textbook)
    1. I’m an accounting major. Why should I study OM? In 3 years, you’ll be promoted to mgr of accounting operations.
    2. I’m a finance major. Why should I study OM? In 3 years, you’ll be promoted to mgr of financial operations.
    3. I’m a marketing major. Why should I study OM? In 3 years, you’ll be promoted to mgr of marketing operations.
    4. I’m an actuarial science major. Why should I study OM? In 3 years, you’ll be promoted to mgr of actuarial operations.
    5. Why study now? I’ll study when I get promoted. The reason you’ll be promoted is because you’ve made suggestions to demonstrate your managerial potential.
  3. Organizing to Produce Goods and Services
    1. All organizations perform three functions
      1. Marketing - generates demand for products
      2. Finance/accounting - obtains and tracks money
      3. Operations - creates the products
    2. Production of goods and services are similar
      1. See Fig 1.1 p5 - Bank, Airline, Manufacturing
      2. Please note: If you work in marketing or finance, then you can still apply OM techniques to the services produced.
  4. What Operations Managers Do?
    1. All managers perform management process - Planning, Organizing, Staffing, Leading, Controlling
    2. OM mgrs apply mgt process to 10 decision areas - Product Design, Quality, Process Design, Location, Layout, Job Design, Supply-chain mgt, Inventory, Scheduling, Maintenance - see Table 1.2 p7.
    3. Discussion Item - of the above topics, which one do you feel you are most likely to apply in your future career?  How?
  5. Where are the OM Careers (Jobs)?
    1. Search for NYC operations careers at www.nytimes.com or hotjobs.yahoo.com (entry-level, no staffing firms)
    2. APICS - www.apics.org - The Association for Operations Management - SJU has student chapter of APICS
    3. APICS certification requested by PriceWaterhouseCoopers, Process Improvement Consultants - p8
  6. Exciting New Trends in OM (p12)
    1. Mass customization - Dell PCs
    2. Empowered employees
    3. Global focus
    4. Just-in-time performance
  7. Productivity 
    1. Productivity = Output/(Labor+Material+Energy+Capital+Miscellaneous)
    2. Example 2 - Collins Title - p16
      1. Productivity with old system = (8 titles per day)/($640[labor] + $400[overhead]) =  .0077 titles per dollar
      2. Productivity with new system = (14 titles per day)/($640[labor] + $800[overhead]) =  .0097 titles per dollar
        3.
    3. U.S. productivity increases about 2.5% annually.  Labor contributes about 10% of the increase, Capital 38%, and Management 52% - Figure 1.7 p14.
    4. Taco Bell (p20) - cut in-store labor 15 hrs/day, reduced floor space > 50%
                  (This page was last edited on January 13, 2010 .)