Introduction to Operation Management

Introduction

Organisational aims
Production system as a process

Operations Management

Introduction

Organisational aims
Production system as a process
Examples

Operations Management

v1.0

Needs

Logistics & Distribution

Information Systems

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Introduction

Organisational aims
Production outcomes
What is a Product?
• Need-satisfying offering of an organization
– Example • Procter & Gamble does not sell laundry detergent • P&G sells the benefit of clean clothes

• Customers buy satisfaction, not parts • Charles Revson says “Revlon sells hope, not cosmetics • Can be a good or a service

Introduction

Organisational aims
Production outcomes

Goods
• Can be resold • Can be inventoried • Some aspects of quality measurable • Selling is distinct from production • Product is transportable • Site important for cost • Revenue generated from tangible product • Often easy to automate

Operations Management

v1.0

Introduction

Organisational aims
Production outcomes

Services category that accounts for over 70% jobs and value added in economy • “Services are anything sold in trade that cannot be dropped on your foot.”
The Economist

• “There are no such things as service industries. There are only industries whose service components are greater or lesser than those of other industries. . .”
Theodore Levitt, 1972

We’re all in services now, more or less . . .

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I Introduction

Organisational aims Organisational modelling
Systems approach Strategic positioning

The operations manager role Course structure

Introduction

Organisational modelling

Operations Management

v1.0

Introduction

Organisational modelling
Systems approach

Concepts
• Structure
– made up of subsystems – arrangement of the resources – physically outlined by the boundary –… – subsystems relationships determine system behaviour – system/subsystems have physical &