OPMT 303 REVIEW Ch 1 Introduction to Operations Management 1 Definition of Operations Management including all elements of input and manager s responsibilities The informal definition for operations management the objective of business is to make a product service that costs a dime sells for a dollar and is habit forming The official definition of operations management activities whereby resources flowing within a defined system are combined and transformed in a controlled manner to add value in accordance with policies communicated by management There are 4 elements of a production system input raw materials facility labor money equipment knowledge information transformation technological processes output goods and services Management feedback A manager has four responsibilities Planning all future managerial activities to meet the objectives of the organization usually done through forecasting to learn about odds Organizing bringing together the resources inputs Directing turning plans into realities which cannot be taught Controlling evaluating the performance if necessary corrective actions 2 Characteristics of goods versus services Goods Physical durable products Output can be inventoried Low customer contact Long response time Regional to international markets Large facilities Economies of Scale Physical durable products Output can be inventoried Low customer contact Capital intensive Quality easily measured Services Intangible perishable Output cannot be stored use or lose High Customer contact tailored to customer needs Short response time to meet daily variable demand Local markets to meet local demand Small facilities to address individual needs Intangible perishable Output cannot be stored use or lose High customer contact tailored to needs Labor intensive Quality not easily measured depends on perception 3 Definition of Supply Chain A supply chain is a system of organizations people activities information and resources involved in moving a product or service from supplier to customer Comparison of societies pre industrial industrial and post industrial 4 Definition of technology the know how knowledge physical things equipment and tools and procedures to operate equipment and performing the work used to produce products and services Society Game PreIndustrial Against nature Industrial PostIndustrial Against fabricated nature Among persons Society Game PreIndustrial Against nature Industrial Against fabricated nature Among persons PostIndustrial PreUse of dominant Human activity Labor Agriculture Raw Mining Muscle power Goods Machine production tending Services Structure Technology Subsistence Authoritative Simple hand tools Quantity of goods Bureaucratic Hierarchical Machines Artistic Quality of Interdependent Information creative life health global intellectual education entertainment recreation PreUse of dominant Human activity Labor Agriculture Raw Mining Muscle power Goods Machine production tending Services Standard of living Standard of living Structure Technology Subsistence Authoritative Simple hand tools Quantity of goods Bureaucratic Hierarchical Machines Artistic Quality of Interdependent Information creative life health global intellectual education entertainment recreation Notes 3 primitive sources of power during the pre industrial society were muscles wind and gravity Steam engines started the industrial society and the vast majority of nations live in this stage 70 or more of GDP comes from services qualifies a country as post industrial 5 Three primary areas of technology product process and information o Product technology new products and services designed by engineers o Process technology new methods to accomplish tasks o Information technology ways to acquire process and transmit information This was introduced about 30 years ago Computers double capacity every 18 months according to Morse Law 6 General ethical principles in choosing a new technology The Golden Rule do unto others as you would have done unto you fairness Immanuel Kant s Categorical Imperative if action is not right for everyone to take then it is not right for anyone If everyone did this would we survive Descartes Rule of Change if an action cannot be taken repeatedly then it is not right to take at all the slippery slope rule I think therefore I am ex addition Utilitarian Principle take action that achieves the highest or greatest value Risk Aversion Principle take action that produces least potential cost or harm Ex Hypocrates oath made by doctors to do no harm No Free Lunch Rule all tangible and intangible objects are owned by someone else and owner may want compensation Ch 2 Competitiveness Strategy and Productivity 1 Factors affecting competitiveness time is the most important resource product and service design cost location be close to customers quality perception quick response differentiation flexibility in volume and variety demand is variable inventory supply chain management customer producer supplier service managers and workers 2 Definitions and calculations of productivity Productivity to track performance over time output input Partial productivity output labor machine capital or energy input Multifactor output combination of input 3 Ways to improve productivity measures bottlenecks improvements goals incentives publication efficiency 4 Introduction to MRPII eight elements described by objectives inputs characteristics output and who is responsible Strategic plan to determine the mission like business what kind customers who objective profit growth o Every organization has a mission statement o Input changes in environment competition economic trends technological social and political changes availability of resources o Distinctive competencies SWOT o Characteristics long time horizon less certainty less structured more ends oriented poorly defined information requirements more irreversible impact focus on the whole o Output business plan production plan o Responsible owner CEO top management Business Plans to develop a statement of income projections costs and profits balance sheet cash flow statement Source and application of funds o Input strategic plan o Characteristics brings together into one coherent package the plans and expectations of firm s operations finance and marketing Medium range plan usually up to two years time horizon or time frame on a monthly or quarterly time bucket frequency basis o Output production plan o Responsible vice president for