Slide 1ThoughtsAre they related?Slide 4Slide 5What is a system?Why do companies/organizations exist?The Operations FunctionOperations as a Transformation ProcessSlide 10Operations Management – Why?CompetitivenessMeasures of CompetitivenessProductivityBarriers to EntryCompetition Within Industries Increases Whenkey differences between products and servicesImpacts on Operations ManagementKey EventsSlide 20Key EventsKey EventsMission/Vision/StrategySlide 24Strategy issuesThe Importance of Clearly Stated Missions/VisionsClearly Stated Mission???Example of A Clearly Understood MissionExample of A Clearly Understood MissionVISION®Strategy FormulationCore CompetenciesStrategy FormulationOrder QualifiersOrder WinnerSWOTUsing SWOT to Develop StrategiesRisk AnalysisPositioning the Firm – Important? Part of strategy? Impacts?Competitive StrategiesCompeting on CostCompetitive Priorities: CostCompeting on Quality (real or perceived quality)Competing on FlexibilityCompeting on SpeedQuestions?Introduction to Operations Management Transforming the Abstract to the ConcreteThoughts•“Your life today is a result of your thinking yesterday. Your life tomorrow will be determined by what you think today.” – John Maxwell•The goal: 2Are they related?•Marketing•Finance•Accounting•International Business•Information Systems•Management•Business Administration•Supply Chain ManagementOps ManagementPublic AdminFinance/Acct’gPsychJournalismInfo SystemsMusicPharmacyEngineering5“If you cannot describe what you are doing as a system, then you don’t know what you are doing.”- Dr. W. Edwards DemingWhat is a system?6Group of items, events, actionsthat are interdependent Ex: going to class, reading assignments,doing homework, passing exams, passingthis class.Ex. Practice, analyzing practices, watching game films, adjusting game plan,winning gamesWhy do companies/organizations exist?•Most Text Books – “exist to meet needs of society…”•Really? Why do companies exist?•Goods and services?•Profits?•Put the competition out of business?7The Operations Function8Operations as a transformation processOperations as a basic functionOperations as the technical coreINPUTSOUTPUTSOperations as a Transformation Process9FeedbackINPUT MaterialMachinesLaborManagementCapitalOUTPUT GoodsServicesTRANSFORMATIONPROCESS10OperationsInputs:ProductsServicesTransformationProcessGoodsOutputs: Primary objective of OM: to add values...Waste, PollutionTechnology AdvanceCapitalMaterialsEquipmentFacilitiesSuppliersLaborKnowledgeTimePlanned outputsOperations Management – Why?•Involves decision making – could be a competitive advantage – could be a core competency•What is a core competency? •Customer service – important?•Example of customer service - MissingLuggage.wmv11CompetitivenessThe degree to which a nation can produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.Also applies to companies 12Measures of Competitiveness•Productivity•GDP (Gross domestic product) growth•Market capitalization•Technological infrastructure•Quality of education•Efficiency of government13ProductivityBecome more efficientDownsizeExpandRetrench Achieve breakthroughsProductivity =OutputInputProductivity improves when firms:Barriers to Entry•Economies of scale•Capital investment•Access to supply and distribution channels•Learning curves15Competition Within Industries Increases When •Firms are relatively equal in size and resources•Products and services are standardized•Industry growth is slow or exponential16key differences between products and services•Services are ____________•Services are hard to ___________•Services are ___________ intensive•The value of a service diminishes rapidly after the service is rendered – sometimes called -----•Forecasting for services more difficult17Impacts on Operations Management Industrial RevolutionScientific ManagementHuman Relations or the lack thereofAdvent of Management ScienceQuality EmphasisGlobalization of Supply ChainsInformation Age/Internet RevolutionKey EventsIndustrial RevolutionSteam engine 1769 James WatDivision of labor 1776 Adam SmithInterchangeable parts 1790 Eli WhitneyScientific ManagementPrinciples Frederick W. Taylor 1911Activity scheduling chart Henry Gant 1912Moving assembly line Henry Ford 1913Human RelationsHawthorne studies 1930 Elton MayoMotivation theories 1940s Abraham Maslow1950s Frederick Hertzberg1960s Douglas McGregorManagement ScienceLinear programming 1947 George DantzigDigital computer 1951 Remington RandSimulation, PERT/CPM, 1950s Operations researchWaiting line theory groupsMRP 1960s Joseph Orlicky, IBMKey EventsQuality EmphasisJIT1970s Taiichi Ohno, ToyotaTQM 1980s W. Edwards Deming,Joseph Juran, et. al.Strategy and operations Skinner, HayesReengineering 1990s Hammer, ChampyWorld Trade Organization 1990s Numerous countriesand companiesLean James WomackGlobalizationEuropean Union and 1970s IBM and othersother trade agreementsEDI, EFT, CIM 1980sKey EventsInformation Age/Internet RevolutionInternet, WWW, ERP1990sSupply chain SAP, i2 management, Technologies, ORACLE,E-commerce PeopleSoft, Amazon,Yahoo, eBay,and othersKey EventsMission/Vision/Strategy•Mission•Vision•StrategyOperations Strategy25Strategy issues•Competition•Strategy and the Internet•Products and Services•Strategy Deployment•Balanced Scorecard•Decision Making Tools and the Military Decision Making Process – similar to scientific decision making model26The Importance of Clearly Stated Missions/Visions “one who is confused in purpose cannot respond to his enemy” Sun Tzu, The Art of War •To know the purpose – there must be a clearly stated mission and vision.27Clearly Stated Mission???“When you come to a fork in the road, take it.”28Example of A Clearly Understood MissionCOL Rusling on General Grant: “He made certain his subordinates knew exactly what he wanted, and why and when he wanted it.”29Example of A Clearly Understood Mission“We endeavor to go to the moon and return safely before the end of this decade.”- John F. KennedyVelocity Management - Securing the Speed of Business, Joseph Walden, CFPIM30VISION®•Vital to the Organization•Integrated throughout the Organization•Sustainable and Achievable•Important from the viewpoint of