Marketing manager course chapter 17

Learning ObjectivesAfter reading this chapter, you should be able to: z Define operations management and its three stages: inputs, transformation and disposition.. z Describe how operat

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Chapter

Operations Management

Learning Objectives

After reading this chapter, you should be able to:

z Define operations management and its three stages:

inputs, transformation and disposition.

z Describe how operations management ensures supplies

of inputs and an efficient production system.

z Use tools of operations management, including Gantt

charts, PERT networks, and statistical process tools.

z Explain the role of quality management in the

operations management process.

z Understand and apply the principles of quality

management, kaizen, just-in-time manufacturing, and

kanban to the production process.

© 2004 The McGraw-Hill Companies, Inc All rights reserved McGraw-Hill

What is Operations Management?

zOperations management is the process an

organization uses to:

¾Obtain the materials or ideas for the product it provides.

¾Transform the materials or ideas into the product.

¾Provide the final product to a user.

zOperations management is closely linked to:

¾ Strategic Management (Chapter 7)

¾ Planning (Chapter 5)

¾ Information Systems Management (Chapter 18)

Skills for Operations Management

Organization Skills

Analytical Problem

Solving Skills

Communication

Skills

© 2004 The McGraw-Hill Companies, Inc All rights reserved McGraw-Hill

The Operations Management

Process

Inputs C onversion O utputs

Raw materials

Labor

Energy

Knowledge

Facility Capacity Process Control

Goods Services Information

Planning in Operations

Management

zPlanning is the foundation of operations

management.

zPlanning – the management function that assesses

the management environment to set future

objectives and map out activities necessary to

achieve those objectives.

© 2004 The McGraw-Hill Companies, Inc All rights reserved McGraw-Hill

Strategic Planning

zStrategic management decisions involved in

operations management:

¾Make-buy analysis: whether to produce an item or

to purchase it

¾Capacity: firm’s ability to produce the product

during a given period

¾Facilities: design and location of an operations

facility

¾Process: how a product or a service will be

produced

¾Facilities layout design: physical arrangement that

Acquiring Inputs

zInputs are the supplies needed to create a product.

zMaterials requirements planning: analyzing a design to

determine the materials and parts required in the

production process

zInventory: the stock of raw materials, inputs, and

component parts that the firm keeps on hand

¾Reordering systems: the process used to help keep inventory

levels more or less consistent.

9 Fixed point reordering system

9 Fixed interval reordering system

© 2004 The McGraw-Hill Companies, Inc All rights reserved McGraw-Hill

The Conversion Process

zConversion process: the stage in which the

product’s inputs are converted to the final product.

zAn effective conversion process:

¾ Works to lower the cost of creating the product; or to

¾ Create a better product for the same cost.

zKey decision areas:

¾Designing the process

¾Monitoring the process