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GMS401 notes - midterm.docx

11 Pages

Global Management Studies
Course Code
GMS 401
Robert Meiklejohn

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Chapter 1 - Introduction to Operations Management Introduction Operations Management - the management of processes or systems that create goods and or provide services Process - a series of linked actions, changes or functions bringing about a result There are three types of processes: core - directly create goods and or services support - support core processes managerial - govern the system Example: For an airline company, core processes include reservations, boarding and flying the plane, handling the luggage etc. Support processes include forecasting, scheduling, managing inventories etc. Managerial processes include capacity planning, locating facilities and employee motivation Companies use OM to improve: efficiency - operating at minimum cost and time effectiveness - achieving quality and responsiveness Why Study OM? large percentage of a company's expenses occur in the operations area such as purchasing materials and workforce salaries large number of management jobs are in OM (purchasing, production planning, quality assurance, scheduling etc) activities in all other areas of business (finance, marketing, HR, accounting) are all interrelated with OM Functions Within Organizations A typical organization has three basic functions: operations - performs all the activities directly related to producing goods or providing services; this function is the core of most organizations and involves the conversion of inputs into outputs Value added - the difference between the cost of inputs and the value or price of outputs Example: In non-profit organizations, the value of outputs (highway construction, police and fire protection) is their value to society. In for-profit organizations, the value of output is measured by the prices that customers are willing to pay for those goods or services. finance - performs activities related to securing resources at favourable prices and allocating those resources throughout the organization. Finance and OM personnel cooperate by exchanging information and expertise in activities such as provision of funds and economic analysis of investment proposals marketing - responsible for assessing customer wants and needs and communicating those needs and feedback Lead time - the time between ordering a good or service and receiving it Other Functions Other supporting functions that interface with operations: accounting - preparing financial statements management information systems(MIS) - providing management with the info. it needs purchasing - procurement of materials, supplies and equipment personnel or HR - recruitment and training of personnel manufacturing engineering - responsible for design or purchase of the machines and equip. needed in the production process maintenance - general upkeep and repair of equipment and the organization product design logistics - transportation of raw materials to the plant; storage etc The Scope of OM Designing decisions (usually strategic and long term) - include system capacity, location, equipment - system designs essentially determine many of the parameters of operations; costs, space and quality are affected by design decisions Operating decisions (are short term) - planning, execution, controlling Production of Goods vs. Performance of Services They both differ in: customer contacts, use of inventories and demand variability uniformity of input labour content of jobs uniformity of output measurement of productivity quality assurance *print slide from ppt . for reference* The Operations Manager's Job - the operations manager must coordinate the use of resources through the management activities of planning, organizing, directing and controlling planning - includes capacity, location, mix of products and services, layout organizing - includes suppliers, staffing, departments, degree of centralization controlling - inventory control, quality control, production pace, motivation, cost control directing - scheduling, purchasing, logistics, issuance of work orders, job assignments Operation Managers and Decision Making General approaches to decision making include: use of models - a simplified representation of something (mathematical models, statistical models) ; for each model, try to learn (i) its purpose, (ii) how it is used to generate results, (iii) how these results are interpreted and used and (iv) what assumptions and limitations apply quantitative approaches - an attempt to obtain optimum solutions to the mathematical models linear programming - used for optimum allocation of scarce resources queuing techniques - analyzing situations in which waiting lines form inventory techniques - control inventories project scheduling techniques - such as PERT (program evaluation and review technique) are useful for planning, coordinating and controlling projects forecasting techniques statistical techniques Many of these techniques require computers and are time consuming analysis of trade-offs - managers deal with decisions by listing advantages and disadvantages of a course of action to better understand the consequences of the decisions they must make. Example: deciding on the amount of inventory to stock, the manager may take into account the trade-off between the increased level of customer service that the additional inventory will yield and the increased costs required to stock that inventory the systems approach - essential whenever something is being designed, redesigned, implemented, improved or changed. System - a set of interrelated parts that must work together; systems approach emphasizes interrelationships among these parts establishing priorities - manager should examine each situation, search for the few factors that will have the greatest impact and give them the highest priority. Pareto phenomenon - a few factors account for a high percentage of results achieved; also knows as the 80-20 rule where 20% of factors will impact 80% of the results achieved ethics - include worker safety, product safety, the environment and closing facilities The Historical Evolution of OM in the earliest days goods were produced using craft production - highly skilled workers using simple, flexible tools to produce goods according to customer specifications one person was responsible for making a product and only simple tools were available craft production had its shortcomings - production was slow and costly, when parts failed replacements also had to be custom made and production costs did not decrease as volume increased (no economies of scale) mercantilism - raw materials were exported to Europe for further processing and manufacturing The Industrial Revolution began in the 1700's in England and spread to the rest of Europe and North America during the 19th century number of innovations changed the face of production by substituting machine power for human or animal power (eg: steam engine made by James Watt around 1769 - provided a source of power to operate machines in factories) two concepts assisted in large scale production: division of labour and interchangeable parts division of labour - operation is divided up into a series of small tasks and individual workers are assigned one of those tasks interchangeable parts - parts of a product made to such precision that they do not have to be custom fitted Scientific Management was spearheaded by Fredrick Taylor whose methods emphasized maximizing outputs emphasized on the technical aspects of work design Frank Gilbreth - developed the principles of motion economy Lillian Gilbreth - focused on the human factor in work and studied worker fatigue Henry Gantt - recognized the value of nonmonetary rewards to motivate workers and developed a widely used tool for sch
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