Introduction to operations management


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Operation management fundamentals with an introduction to social responsibility, ethics, entrepreneurship and intrapreneurship.

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  • You should stress that the time-based historical perspective is only one way to look at the development of Operations Management, outcome focus is another.
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  • Introduction to operations management

    1. 1. Introduction to Operations Management
    2. 2. Operations Management is: <ul><li>The business function responsible for planning , coordinating , and controlling the resources needed to produce products and services for a company </li></ul>© Wiley 2010
    3. 3. Operations Management is: <ul><li>A management function </li></ul><ul><li>An organization’s core function </li></ul><ul><li>In every organization whether Service or Manufacturing, profit or Not for profit </li></ul>© Wiley 2010
    4. 4. Typical Organization Chart © Wiley 2010
    5. 5. What is Role of OM? <ul><li>OM Transforms inputs to outputs </li></ul><ul><ul><li>Inputs are resources such as </li></ul></ul><ul><ul><ul><li>People, Material, and Money </li></ul></ul></ul><ul><ul><li>Outputs are goods and services </li></ul></ul>© Wiley 2010
    6. 6. OM’s Transformation Process © Wiley 2010
    7. 7. Transformation Process of a Canned Food Processor Inputs Processing Outputs <ul><li>Raw vegetables </li></ul><ul><li>Metal sheets </li></ul><ul><li>Water </li></ul><ul><li>Energy </li></ul><ul><li>Labor </li></ul><ul><li>Building </li></ul><ul><li>Equipment </li></ul><ul><li>Cleaning </li></ul>Canned vegetables <ul><li>Making cans </li></ul><ul><li>Cutting </li></ul><ul><li>Cooking </li></ul><ul><li>Packing </li></ul><ul><li>Labeling </li></ul>
    8. 8. Transformation Process of a Hospita l Inputs Processing Outputs <ul><li>Doctors, nurses </li></ul><ul><li>Examination </li></ul>Healthy patients <ul><li>Hospital </li></ul><ul><li>Surgery </li></ul><ul><li>Medical Supplies </li></ul><ul><li>Monitoring </li></ul><ul><li>Equipment </li></ul><ul><li>Medication </li></ul><ul><li>Laboratories </li></ul><ul><li>Therapy </li></ul>
    9. 9. OM’s Transformation Role <ul><li>To add value </li></ul><ul><ul><li>Increase product value at each stage </li></ul></ul><ul><ul><li>Value added is the net increase between output product value and input material value </li></ul></ul><ul><li>Provide an efficient transformation </li></ul><ul><ul><li>Efficiency – means performing activities well for least possible cost </li></ul></ul>© Wiley 2010
    10. 10. Examples of Various 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, banking , renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites
    11. 11. Types of Transformation Processes <ul><li>Physical - manufacturing </li></ul><ul><li>Locational - transportation </li></ul><ul><li>Exchange - retailing </li></ul><ul><li>Storage - warehousing </li></ul><ul><li>Physiological - health care </li></ul><ul><li>Informational - telecommunications </li></ul><ul><li>Psychological - entertainment </li></ul>
    12. 12. OM Decisions © Wiley 2010
    13. 13. The H istorical Evolution of Operations Management
    14. 14. Significant Events in Operations Management
    15. 15. Business Information Flow © Wiley 2010
    16. 16. Business Functions Overlap Operations Finance Marketing
    17. 17. Business Functions - Bank (1 of 3) Operations Finance/ Accounting Marketing Check Clearing Teller Scheduling Transactions Processing Security Commercial Bank © 1984-1994 T/Maker Co.
    18. 18. Business Functions – Airline (2 of 3) Operations Finance/ Accounting Marketing Ground Support Flight Operations Facility Maintenance Catering Airline
    19. 19. Business Functions – Manufacturer (3 of 3) Operations Finance/ Accounting Marketing Production Control Manufacturing Quality Control Purchasing Manufacturing
    20. 20. New Concepts and Trends in OM <ul><li>Mass Customization </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Outsourcing </li></ul><ul><li>Lean manufacturing </li></ul><ul><li>Agility </li></ul><ul><li>Electronic Commerce </li></ul>
    21. 21. New Concepts and Trends(1 of 6): Mass Customization <ul><li>The rapid, low cost production of goods and services that fulfill constantly changing and increasingly unique customer desires. </li></ul>
    22. 22. New Concepts and Trends (2 of 6): Supply Chain Management <ul><li>The management of the sequence of organizations- their facilities, functions and activities- that are involved in producing and delivering a product or service </li></ul><ul><li>SCM requires the application of a systems approach to managing the flow of information, materials and services from raw material suppliers through factories and warehoses to the end user (customer) </li></ul>
    23. 23. Simple Product Supply Chain Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer
    24. 24. New Concepts and Trends (3 of 6) : Outsourcing Buying goods or services rather than producing goods or performing services within the organization
    25. 25. New Concepts and Trends (4 of 6): Lean Manufacturing <ul><li>Systems that use minimal amounts of resources - less space, less inventory, fewer workers, fewer levels of management- to produce a high volume of high-quality goods with some variety </li></ul>
    26. 26. New Concepts and Trends (5 of 6): Agility <ul><li>The ability of an organization to respond quickly to demands or opportunities. </li></ul><ul><li>Involves maintaining a flexible system that can quickly respond to changes in either the volume of demand or changes in product/service offerings </li></ul>
    27. 27. New Concepts and Trends (6 of 6): Electronic Commerce <ul><li>The use of computer networks, primarily the internet, to buy and sell products, services, and information. </li></ul>
    28. 28. Other Trends <ul><li>Project Management (PERT, CPM) </li></ul><ul><li>Management of Technology and Information Systems (GPS, ERP) </li></ul><ul><li>Quality and Process Improvements (Six Sigma) </li></ul>
    29. 29. Social Responsibility & Ethics
    30. 30. Law and Ethics <ul><li>Ethics – A set of moral principles or values that governs the conduct of an individual or a group. </li></ul><ul><li>What is lawful conduct is not always ethical conduct. </li></ul><ul><ul><li>The law may permit something that would be ethically wrong. </li></ul></ul>
    31. 31. What is ethical? <ul><li>Is it legal? </li></ul><ul><li>Does it cause physical/psychological harm to anyone? </li></ul><ul><li>Is it ok if everyone knows about it? </li></ul><ul><li>Can “I” live with it for my whole life?? </li></ul>
    32. 32. Theories of Social Responsibility Maximizing Profits Moral Minimum Stakeholder Interest Corporate Citizenship
    33. 33. Maximizing Profits <ul><li>A theory of social responsibility that says a corporation owes a duty to take actions that maximize profits for shareholders. </li></ul><ul><li>The interests of other constituencies are not important in and of themselves. </li></ul>
    34. 34. Moral Minimum <ul><li>A theory of social responsibility that says a corporation’s duty is to make a profit while avoiding harm to others . </li></ul><ul><li>As long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility. </li></ul>
    35. 35. Moral Minimum <ul><li>The legislative and judicial branches of government have established laws that enforce the moral minimum of social responsibility on corporations. </li></ul><ul><ul><li>e.g., Occupational safety laws </li></ul></ul><ul><ul><li>e.g., Consumer protection laws for product safety </li></ul></ul>
    36. 36. Stakeholder Interest <ul><li>A theory of social responsibility that says a corporation must consider the effects its actions have on persons other than its stockholders . </li></ul><ul><li>This theory is criticized because it is difficult to harmonize the conflicting interests of stakeholders. </li></ul>
    37. 37. Corporate Citizenship <ul><li>A theory of responsibility that says a business has a responsibility to do good for the society. </li></ul><ul><li>Business is responsible for helping to solve social problems. </li></ul>
    38. 38. Entrepreneurship & Intrapreneurship
    39. 39. Introduction to Entrepreneurship There is tremendous interest in entrepreneurship around the world According to the GEM 2005 study, about 330 million people, or 14% of the adults in the 35 countries surveyed, are involved in forming new businesses
    40. 40. What is Entrepreneurship? <ul><li>Capacity to take risks </li></ul><ul><li>Ability to own and organize </li></ul><ul><li>Desire and capability to innovate and diversify (Stepanek, 1962) </li></ul>
    41. 41. Who is an entrepreneur? <ul><li>Person conducting own business (Webster) </li></ul><ul><li>Person who sets up business deals in order to make profits (Collins Cobuild) </li></ul><ul><li>Organizer of an economic venture, one who owns, organizes, manages, and assumes the risks of the business (Chandrashekhar) </li></ul>
    42. 42. Why Become an Entrepreneur? There are three primary reasons that people become entrepreneurs and start their own firms Desire to be their own boss Financial rewards Desire to pursue their own ideas
    43. 43. Steps in the Entrepreneurial Process (1 of 2) Step 1 Step 2 Developing Successful Business Ideas
    44. 44. Steps in the Entrepreneurial Process (2 of 2) Step 3 Step 4
    45. 45. Intrapreneurship <ul><li>Term coined by Pinchot in 1982 </li></ul><ul><li>Term “corporate entrepreneurship” used more today </li></ul><ul><li>Actually, “corporate entrepreneurship” has two parts </li></ul><ul><ul><li>Intrapreneurship – internal R&D </li></ul></ul><ul><ul><li>Corporate venturing – external funding </li></ul></ul><ul><li>Neither method best – need both </li></ul><ul><ul><li>This class – some of both </li></ul></ul>
    46. 46. Thank You! <ul><li>Stay in touch: </li></ul><ul><li>Facebook: ProfManish Parihar </li></ul><ul><li>Blog: </li></ul><ul><li>E-mail: [email_address] </li></ul><ul><li>Cell: 9274807737 </li></ul>