Introduction to Operations and Competitiveness

The Operations Function :

 Operations as a transformation process

 Operations as a basic function
 Operations as the technical core

Operations as a Transformation Process :

INPUT

Material OUTPUT
Machines
TRANSFORMATION
Labor Goods
Management PROCESS
Services
Capital

Feedback

Transformation Processes :

 Physical (manufacturing)
 Locational (transportation/ warehouse)
 Exchange (retail)
 Physiological (health care)
 Psychological (entertainment)
 Informational (communications)
Historical Events in OM :

 Industrial Revolution
 Scientific Management
 Human Relations
 Management Science
 Quality Revolution
 Globalization
 Information Age/Internet Revolution

Historical Events in OM :

Industrial Revolution :
Steam engine,1769 James Watt
Division of labor, 1776 Adam Smith
Interchangeable parts, 1790 Eli Whitney

Scientific Management :
Principles, 1911 Frederick W. Taylor
Time and motion studies, 1911 Frank & Lillian Gilbreth
Activity scheduling chart, 1912 Henry Gant
Moving assembly line, 1913 Henry Ford

Human Relations :
Hawthorne studies, 1930 Elton Mayo
Motivation theories, 1940s Abraham Maslow
1950s Frederick Hertzberg
1960s Douglas McGregor

Management Science :
Linear programming,1947 George Dantzig
Digital computer, 1951 Remington Rand
Simulation, PERT/CPM, 1950s Operations research groups
Waiting line theory
MRP, 1960s Joseph Orlicky, IBM

Quality Revolution :
JIT 1970s Taiichi Ohno, Toyota
TQM 1980s W. Edwards Deming,
Joseph Juran, et. al.
Strategy and operations Skinner, Hayes
Reengineering, 1990s Hammer, Champy
World Trade Organization, 1990s Numerous countries
and companies

Globalization :
European Union and
other trade agreements, 1970s IBM and others
EDI, EFT, CIM 1980s
Information Age/Internet Revolution :
Internet, WWW, ERP ARPANET, Tim
Supply chain Berners-Lee, SAP, i2
management, Technologies, ORACLE,
E-commerce1990s PeopleSoft, Amazon,Yahoo,
Bay,and others

E-Business Promotes :

 Better customer relations

 More efficient processes
 Lower cost of materials
 Information technology synergy
 Better and faster decision making
 New forms of organizations
 Expanded supply chain
 Higher customer expectations
 New ways of doing business
 Globalization

Competitiveness :

The degree to which a nation can produce goods and services that meet the
test of international markets while simultaneously maintaining or expanding
the real incomes of its citizens.

Productivity :
Output
Productivity =
Input

Productivity improves when firms :

 Become more efficient

 Downsize
 Expand
 Retrench
 Achieve breakthroughs