Managing Service and Manufacturing Operations Lecture Notes

Managing Service and Manufacturing Operations Lecture Notes...

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Unformatted text preview: Lecture Notes on MBA 657 Managing Service and Manufacturing Operations Dr. Dooyoung Shin Department of Management College of Business Minnesota State University, Mankato Mankato, MN 56001 Topic 1 Introduction: What is Operations Management? 1.1 What is operations ? Operations is concerned with transforming inputs into useful outputs, and thereby adding value to some entity; this constitutes the primary activity of virtually every organization. Eg: Walmart was focusing on Operations Mngmt where as K mart was doing Marketing. Four major ways of transformation 1. Alte r : physical change 2. Transport : flower, garbage, etc. 3. Store : 4. Inspect : medical exams, jewelry appraisals, elevator certifications, etc. Value: the perception of the benefits associated with a good, service, or bundle of goods and service. Perceived Benefits Value = --------------------------------- Price Value-chain approach emphasizes the organization as a system of interdependent activities that create value for the customer . 1.2 Why operations should be considered the heart of every organization? Fundamentally, organizations exist to create value , and operations involve tasks that create value . Operational innovation can provide organizations with long-term strategic advantages over their competitors. Eg: Apple, iPod, popularizing the concept called mp3. Operational innovation is the key component. 1.3 What is Operations Management ( OM )? OM is the systematic direction and control of the processes that transform ( value-adding ) inputs into products and services for internal, as well as external customers. i.e. , the inputs get transformed at operations into outputs. Value added : the net increase created during the transformation of inputs into final outputs Efficiency : being able to perform activities well, and at the lowest possible cost Effectiveness : doing the right thing to create the most value for the company 1.3.1 Three Different Perspectives on OM Operations Management as a function : How does Operations differ from other functions? Operations Management as a set of decisions : What types of decisions are involved in managing operations? Operations Management as a Competitive Weapon : What are companies doing to make operations a competitive weapon ? Japanese technique: better service at lower cost. 1.3.1.1 Why Study OM ? Operations Function lies at the heart of the business activity . Operations Management is one of the most strategically vital areas of managerial concern. The underlying theory of OM is common to both goods and services production. e.g ., these are applicable to the management of hospital or airline operations as it is to the manufacture of automobiles....
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Managing Service and Manufacturing Operations Lecture Notes...

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