Traditional
and Current
Trends in
Operation
Management
1. Local Focus Global Focus
2. Batch shipment JIT Performance
3. Low Purchase Bidding
Supply Chain Partnering
4.Lengthy Product Development
EXAMPLE
5. Mass ProductionMass Customization
6. Electronic Business
7. Computer- Aided Design
8. Computer-Aided
Manufacturing (CAM)
9. Low Cost FocusEnvironmentally Sensitive Production
10. Total Quality Management
Physical Goods
vs. Services
Characteristics of Goods
 Tangible product
 Consistent product
definition
 Production usually
separate from
consumption
 Can be inventoried
 Low customer
interaction
Characteristics of Service
 Intangible product
 Produced and
consumed at same time
 Often unique
 High customer
interaction
 Inconsistent product
definition
 Often knowledge-based
 Frequently dispersed
Goods Versus Services
Characteristic Goods Services
Output Tangible Intangible
Customer Contact Low High
Labor Content Low High
Uniformity of input High Low
Measurement of productivity Easy Difficult
Opportunity to correct problems before
delivery
High Low
Inventory Much Little
Goods Versus Services
Characteristic Goods Services
Wages Narrow range Wide Range
Patentable Usually Not usually
I
The Impact of Technology on Op Man
Better customer relation
More efficient process
Lower costs of materials
Information technology synergy
Better and faster decision
making
New forms of organization
Expanded supply chain
Higher customer expectation
New ways of doing business
Globalization

Introduction to Operation Management