Introduction to
Operations
Management
Copyright © 2022
222 D
Dr.
r Tar
Tarek
ek Saf
Safwat
wa
y What is operations?
y The part of a business organization that is responsible for
producing goods or providing services.
y If a business organization were a car, operations would be
its engine.
y How can we define operations management?
y The management of systems or processes that create goods
and/or provide services
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y Goods are physical items that include raw materials,
parts, subassemblies, and final products.
• Automobile
• Computer
• Oven
• Shampoo
y Services are activities that provide some combination of
time, location, form or psychological value.
• Air travel
• Education
• Haircut
• Legal counsel
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1. Degree of customer contact . “moment of truth”
2. Uniformity of input
3. Labor content of jobs
4. Measurement of productivity
5. Quality assurance. High variation in service
6. Inventory. Less in service
7. Wages. High variation in service
8. Evaluation of work
9. Ability to patent design
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Value-Added
Inputs Transformation/ Outputs
•Land Conversion •Goods
•Labor •Services
•Capital
Process
•Information
Measurement
and Feedback
Measurement Measurement
and Feedback and Feedback
Control
Feedback = measurements taken at various points in the transformation process
Control = The comparison of feedback against previously established
standards to determine if corrective action is needed.
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The scope of operations management ranges
across the organization.
The operations function includes many interrelated activities
such as:
y Forecasting
y Capacity planning
y Facilities and layout
y Location
y Scheduling
y Managing inventories
y Assuring quality
y Motivating employees
y And more . . . 8
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The Operations Function consists of all activities directly
related to producing goods or providing services.
A primary function of the operations manager is to guide the
system by decision making.
y System Design Decisions
y System Operation Decisions
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y Operations Manager
y Supply Chain Manager
y Production Analyst
y Schedule Coordinator
y Production Manager
y Industrial Engineer
y Purchasing Manager
y Inventory Manager
y Quality Manager
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y Most operations decisions involve many alternatives that can
have quite different impacts on costs or profits .
y Typical operations decisions include:
y What: What resources are needed, and in what amounts?
y When: When will each resource be needed? When should the work
be scheduled? When should materials and other supplies be ordered?
y Where: Where will the work be done?
y How: How will the product or service be designed? How will the
work be done? How will resources be allocated?
y Who: Who will do the work?
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y Industrial Revolution
y Scientific Management
y Human Relations Movement
y Decision Models and Management Science
y Influence of Japanese Manufacturers
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y E-business: Use of the Internet to transact business.
y E-commerce: Consumer-to business transactions.
y Technology: The application of scientific discoveries to
the development and improvement of goods and
services.
y Product and service technology
y Process technology
y Information technology (IT)
y Lean Six Sigma: A process for using minimum
resources, minimum waste, reducing costs, improving
quality, and increasing customer satisfaction.
y Agility : The ability of an organization to respond
quickly to demands or opportunities. 13
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y Sustainability Using resources in ways that do not
harm ecological systems that support human existence.
y Ethics A standard of behavior that guides how one
should act in various situations.
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