Industrial Engineering

Operations Management

Production Operations Management

The creation of goods and services

Operations Management
The set of activities that creates goods and services by transforming inputs into outputs.

OM Functions

It includes planning, coordinating, and controlling the resources needed to produce products and services

Essential Functions (classes) in OM

Marketing generates demand Operations creates the product Finance/accounting tracks organizational performance, pays bills, collects money

Products and Services

Industrial Engineering

Operations Management

The History of Operation Management Operations Management

Division of labor (Adam Smith 1776 and Charles Babbage 1852)

Standardized parts (Whitney 1800)

Scientific Management (Taylor 1881)

OM Functions

Coordinated assembly line (Ford, Sorenson/Avery 1913)

Gantt charts (Gantt 1916)

Motion study (Frank and Lillian Gilbreth 1922 Quality control (Shewhart 1924; Deming 1950)

Products and Services

Computer (Atanasoff 1938)

CPM/PERT (DuPont 1957)

Industrial Engineering

Operations Management

The History of Operation Management Operations Management

Material requirements planning (Orlicky 1960) Computer aided design (CAD 1970) Flexible manufacturing system (FMS 1975)

OM Functions

Baldrige Quality Awards (1980) Computer integrated manufacturing (1990) Globalization(1992) Internet (1995)

Products and Services

Industrial Engineering

Operations Management

The History of Operation Management Operations Management

OM Functions

Products and Services

Industrial Engineering

OM Functions
Typical Organization Chart

Operations Management

OM Functions

Products and Services

Industrial Engineering

OM Functions
Manufacturing Manufacturing

Operations Management

Operations
Facilities Construction , maintenance Production & inventory control Scheduling: materials control Supply-chain management Manufacturing Tooling, fabrication, assembly Design Product development and design Detailed product specifications Industrial Engineering Efficient use of machines, Space, and personnel Process analysis Development and installation

Finance & Accounting

Disbursements/credits Receivables Payables General ledger Funds Management Money market International Exg Capital requirements Stock issue Bond issues Recall

Marketing
Sales promotions Advertising Sales Market research

OM Functions

Products and Services

Industrial Engineering

OM Functions

Operations Management

Airline
Operations
Ground support equipment Maintenance Ground Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications Dispatching Management science

OM Functions

Finance & Accounting

Accounting Payables Receivables General Ledger Finance Cash control International exchange

Marketing
Traffic administration Reservations Schedules Tariffs (pricing) Sales Advertising

Products and Services

Industrial Engineering

OM Functions
OM Transformation Process

Operations Management

OM Functions

Products and Services

Industrial Engineering

OM Functions

Operations Management

Value added
Inputs Land Labor Capital Transformation/ Conversion process
Feedback

OM Functions

Outputs Goods Services

Control
Products and Services

Feedback

Feedback

Value-added is the difference between the cost of inputs and the value or price of outputs
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Industrial Engineering

Products and Services

Goods-Service Continuum

Operations Management

Goods

Service Surgery, teaching

OM Functions

Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food

Products and Services

Home remodeling, retail sales Automobile assembly, steel making

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Industrial Engineering

Products and Services

Goods & Services

Operations Management

Manufacturing
Tangible product Product can be inventoried Low customer contact Longer response time Capital intensive

Services
Intangible product Product cannot be inventoried High customer contact Short response time Labor intensive

OM Functions

Products and Services

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