Introduction to Operations Management
Introduction
Prof. Christian Terwiesch
Operations in a Restaurant
Prof. Christian Terwiesch
Operations in an Emergency Room
Prof. Christian Terwiesch
Operations from the Perspective of the Customer
Prof. Christian Terwiesch
Four Dimensions of Performance
Cost Quality
▪ Efficiency
▪ Product quality (how good?) ▪ Process quality (as good as promised?)
Variety
Time
▪ Customer heterogeneity
▪ Responsiveness to demand Important for - Performance measurement - Defining a business strategy
Prof. Christian Terwiesch
Four Dimensions of Performance: Measurements for a Sandwich Store
Cost Quality
▪ Efficiency
▪ Product quality (how good?)
▪ Process quality (as good as p promised?) )
Variety
Time
▪ Customer heterogeneity
▪ Responsiveness to demand
Prof. Christian Terwiesch
Introduction
Efficient Frontier
Prof. Christian Terwiesch
Four Dimensions of Performance: Trade-offs
Cost Quality
▪ Efficiency ▪ Measured by:
- cost per unit - utilization
▪ Product quality (how good?)
=> Price
▪ Process quality (as good as promised?) => Defect rate
Variety
Time
▪ Customer heterogeneity ▪ Measured by:
- number of options - flexibility / set-ups - make to order make-to-order
▪ Responsiveness to p demand ▪ Measured by:
- customer lead time - flow time
Prof. Christian Terwiesch
What Can Ops Management (This Course) Do to Help? Step 1: Help Making Operational Trade-Offs
Responsiveness High
Very short waiting times, Comes at the expense of Frequent operator idle time
Tradeoff Low Low labor productivity
Long waiting times, yet operators are almost fully utilized y
High labor productivity
Labor Productivity (e.g. $/call)
Example: Call center of a large retail bank - objective: 80% of incoming calls wait less than 20 seconds - starting point: 30% of incoming calls wait less than 20 seconds - Problem: staffing levels of call centers / impact on
Prof. Christian Terwiesch
Operations in a Restaurant
Prof. Christian Terwiesch
Operations in an Emergency Room
Prof. Christian Terwiesch
Operations from the Perspective of the Customer
Prof. Christian Terwiesch
Four Dimensions of Performance
Cost Quality
▪ Efficiency
▪ Product quality (how good?) ▪ Process quality (as good as promised?)
Variety
Time
▪ Customer heterogeneity
▪ Responsiveness to demand Important for - Performance measurement - Defining a business strategy
Prof. Christian Terwiesch
Four Dimensions of Performance: Measurements for a Sandwich Store
Cost Quality
▪ Efficiency
▪ Product quality (how good?)
▪ Process quality (as good as p promised?) )
Variety
Time
▪ Customer heterogeneity
▪ Responsiveness to demand
Prof. Christian Terwiesch
Introduction
Efficient Frontier
Prof. Christian Terwiesch
Four Dimensions of Performance: Trade-offs
Cost Quality
▪ Efficiency ▪ Measured by:
- cost per unit - utilization
▪ Product quality (how good?)
=> Price
▪ Process quality (as good as promised?) => Defect rate
Variety
Time
▪ Customer heterogeneity ▪ Measured by:
- number of options - flexibility / set-ups - make to order make-to-order
▪ Responsiveness to p demand ▪ Measured by:
- customer lead time - flow time
Prof. Christian Terwiesch
What Can Ops Management (This Course) Do to Help? Step 1: Help Making Operational Trade-Offs
Responsiveness High
Very short waiting times, Comes at the expense of Frequent operator idle time
Tradeoff Low Low labor productivity
Long waiting times, yet operators are almost fully utilized y
High labor productivity
Labor Productivity (e.g. $/call)
Example: Call center of a large retail bank - objective: 80% of incoming calls wait less than 20 seconds - starting point: 30% of incoming calls wait less than 20 seconds - Problem: staffing levels of call centers / impact on