Session 1 - Session 1 Part 1 Introduction This first...

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Session 1 - Part 1 Introduction . This first chapter provides an overview of Operations Management as it has developed from Adam Smith's Division of Labor concept, to Globalization and eCommerce. It even projects into the near future as we continue to improve on current processes and see new possibilities. Technology has required changes in the thought processes associated with Operations Management. Computers, communications, and lower transaction costs encourage competition, and as competition increases, it becomes more and more important for companies to become more flexible in meeting the demands of their customers. Operations Management has the responsibility to be more efficient in cost reduction and timely delivery. Total Quality Management is a philosophy and a process (or means) to aid in accomplishing both. Look at Figure 1.3 in your text to review this evolutionary process. Some key names and their influence on the process that you should remember include: Adam Smith Labor Specialization Eli Whitney Standardized Parts Frederick Taylor Father of Scientific Management Henry Ford and Charles Sorenson Moving Assembly Line Walter Shewhart Statistical Process Control W. Edwards Deming Quality Process The first six names belong to that era concerned primarily with reducing costs associated with producing a product. Combining Labor Specialization with the Standardization of Parts paved the way for Mr. Ford and Mr. Sorenson to set up an assembly line and then to move the product down the line. In the 1980s, Deming's writings were rediscovered in the United States as the result of his involvement of the rebuilding of Japan's economy after World War Two. Joseph Juran was also instrumental in Japan's economic recovery, and between them Total Quality Management became another evolutionary step in Operations Management. Why study Operations Management? Marketing (what is needed), finance (securing resources for what is needed), and operations (producing the goods or services that are needed) are three major functions of a corporation. Because Operations Management is one of the three, we want and need to have knowledge relative to its function. Refer to Table 1.1 and notice the three options to increase overall contribution to the corporation: Marketing (increasing revenue 50%), Finance and Accounting (reducing finance costs 50%), and Operations (reducing production costs 20%). The bottom line influence of reducing production costs far outweighs either of the other two options. Because the Operations function, in many cases, involves large expenditures, productivity becomes a primary responsibility of the Operations Manager. Doing it better for less is the goal. How many times have you studied the elements of the management cycle? Here they are again.
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Session 1 - Session 1 Part 1 Introduction This first...

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