Management Themes in Operations

Planning Organizing

Models Behavior

Controlling
A strategic Perspective

Industry

Market and competition

Organizational Strategy
Profit or return
Source of funds
Product or service quality

Continued…
 Operations Policy
Conversion characteristics: design
Product design flexibility
Delivery capability
Location of facilities
Processing technology
Control systems

Managing Conversion
Operations
Quality
Efficiency
Schedule
Information
feedback
Results
 Develop Organizational Strategy

Basing upon the following four characteristics :

• Quality (Product performance)
• Cost efficiency (low product price)
• Dependability (reliable, timely delivery
of orders to customers)
• Flexibility (responding rapidly with new
products or changes in output volume)
 Total Time
• In an era of time based competition, a
firm’s competitive advantage is defined
not by cost but by the total time required
to produce a product or service.
• Firms able to respond quickly have
reported growth rates over three times
the industry average and double the
profitability.
The overall objective of the operations subsystem is
to provide conversion capabilities for meeting the organization’s
Goals and strategy.
Operations Objectives
1. Product/service characteristics
2. Process characteristics
3. Product/service quality
4. Efficiency
a) Effective employee relations and cost control of
labor
b) Cost control of material
c) Cost control in facility utilization

Continued….
5. Customer service
(Schedule)
a) Producing quantities
to meet expected
demand
b) Meeting the required
delivery date for
goods or services
6. Adaptability for
futures survival
 Operations Alternatives
and Tradeoffs
Decisions in various
operations have
tradeoffs between
choices about
product and process
versus choices about
quality, efficiency,
schedule and
adaptability.

Continued …
 Continued …

e.g. to sell yogurt in ice-cream (1980s-1990s)

– Where should facilities be located?
– How large they should be?
– What degree of automation should be used?
– Will the frozen yogurt be produced on site? etc.
– How do these decisions impact quality, efficiency,
schedule (customer services), and adaptability?
are examples of tough and crucial tradeoffs.
 Trends in Operations
Management
• What new demands are being made of
operations managers today?
• How will their jobs change in the future?

Answers to such questions are speculative

but we can find some clues by observing
trends in overall economic activities.
Are people doing the same kinds of work
that they have done in the past?

Shifts in Economic Activity

Year Agriculture/ Industry Services Total
Other Extractive /Manufa
Industry
cturing
1900 38% 34% 28% 100%

1950 15 40 45 100

1970 5 34 61 100

1989 3 27 70 100
A Global Perspective

Not all nations are

shifting from
industrialization to
a manufacturing/
service as described
above for the U.S.
economy – many are
not yet
industrialized.
Productions and
Operations
Management
Careers
If your career objectives are to advance to a top management position,
operations is a reasonable avenue to travel.
Entry Positions in
Production/Operations Management
Two entry tracks are available:
• Line Positions like first-line supervisors,
management trainees, and foremen.
• Operations staff include computer
analysts, project analysts, inventory and
material planning and control, production
planning, logistics, and quality control.
 Career Choice in Production/Operations
Management
Consider the following points:

1. Opportunity for advancement, professional

development
2. Job satisfaction
3. monetary rewards
4. Quality of life (climate, entertainment etc.)
5. Work group characteristics
6. Individual needs and desires (location, health
considerations, etc.)
 General Model for Managing Operations
Random
Planning
Fluctuations Organizing
•Designing conversion
system Organizing for
•Scheduling Conversion Conversion
System
Monitor Outputs
Inputs
Conversion Process

Models
Behavior
Controlling
•Material Control
•Managing for world-
class competition