MG101.

1
OPERATIONS MANAGEMENT

1: INTRODUCTION
Dr David Newton
Management Science
Department of Management

MG101.1 Operations Management

McGraw-Hill/Irwin

Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

Objectives of the course

Understand how operations

management is critical to how
organizations deliver value
Be familiar with a range of key concepts
in operations management
Be able to use a number of tools to
appraise operations management
decisions and performance

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Who we are
Dave
Newto
n

Abhjit
Mandal

Catherin
e
Thomas
Vahan
Hovhannis
yan
3
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Objectives today

Introduction to operations management

Outline the material we will cover
Explain the structure of MG101.1
What we expect from you
How assessment will be done

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But first back to the future

The future - as seen 50

years ago*

1964 Worlds Fair, NYC

in 2014 there will be...

* Planet Money podcast 15 August 2014

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 picture-phones

 hotels under the sea

 crops in the desert

 personal jetpacks

10

The future - as seen 50

years ago*

1964 Worlds Fair, NYC

in 2014 there will be... Picture phones,
hotels under the sea, crops in the desert,
personal jet packs
But it missed perhaps the biggest
change
Many things we buy are now
profoundly cheaper
and delivered much more quickly
* Planetto
Money
podcast 15
August 2014 and services
This applies
both
goods
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Defining some terms

12
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What Is Operations and Supply Chain

Management?

The design, operation, and improvement

of the systems that create and delivery
the firms primary products and services
Operations and supply chain
management (OSCM) is

A functional field of business

Concerned with the management of the
entire production/delivery system

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Strategy, Processes, and

Analytics

Operations and supply chain management involves

Product design
Purchasing
Manufacturing
Service operations
Logistics
Distribution

Success depends upon

Strategy
Processes to deliver products and services
Analytics to solve business problems and to support the
decisions needed to manage the firm
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Operations and Supply Chain Processes

Operatio
ns
Manufacturing
and service
processes
used
transform
to transform
resources into
products

Supply
Chain
Processes that
move move
information and
material to and
from the firm
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Process Steps for Mens Nylon

Supplex Parkas

1-16

Operations and Supply Chain Processes

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Process Activities

Planning processes needed to operate an existing

supply chain
Sourcing selection of suppliers that will deliver the
goods and services needed to create the firms
product
Making producing the major product or service
Delivering logistics processes such as selecting
carriers, coordinating the movement of goods and
information, and collecting payments from customers
Returning receiving worn-out, excess, and/or
defective products back from customers

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Goods versus Services

Goods

Pure Goods

Core Goods

Tangible
Less interaction with customers
Often homogeneous
Not perishable can be inventoried

Servic
es

Core Services

Pure Services

Intangible
Interaction with customer required
Inherently heterogeneous
Perishable/time dependent
Defined and evaluated as a package
of features
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Efficiency, Effectiveness,
and Value
Efficiency
Doing something at the lowest
possible cost
Effectiveness
Doing the right things to create the
most value for your customer
Value
The attractiveness of a product
relative to its cost
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Historical Development of Operations and

Supply Chain Management
Manufacturing strategy
Late
developed
1970s
Just-in-time (JIT) production
Early
pioneered by the Japanese
1980s
Mid 1980s Service quality and
productivity
Total quality
Early
Six-sigma
management (TQM) and 1990s
Quality certification
Mid 1990s quality Supply chain
programs Business process
management
Late
reengineering (BPR)
(SCM)
1990s
Electronic
Service
Early
commerce
science
2000s
Mid 2010s
Business
analytics
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Current Issues in OSCM

Coordinating relationships between

members of SC
Optimizing global network of suppliers,
producers, and distributors
Managing customer touch points
OSCM as a competitive weapon
Sustainability and triple bottom line
Lean supply chains efficient but
vulnerable to disruption?
Future scope and impact of automation

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Course textbook

Operations and
Supply Chain
Management,
Jacobs and Chase
Textbook (Amazon:
48 new, 22 used)
or Kindle e-book
(45)
Copies in the library
Each lecture maps
onto a chapter of the
textbook
Slides and lecture

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Course overview

Lectures in MT weeks 1-5, 7-11

Classes in MT, weeks 2-5, 7-11
Covering these topics:
1. Introduction
2. Operations strategy
and sustainability
3. Strategic capacity
management
4. Process analysis
5. Production
processes

6. Service processes
7. Six-sigma quality
8. Project
Management
9. Lean supply chains
10. Group project
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What we expect from you

Buy or borrow the textbook and read each weeks

chapter in advance
Come to the lectures
Exercises will be assigned do these in advance of
the classes
There will be both quantitative and discussion-type
questions
Classes are mandatory, teachers will record
attendance
You will be assigned to classes
You will be assigned to teams for the summative
assignment
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Assessment

Formative essay

Summative group project

set Week 5 MT, return by Week 11 MT

Work alone or in teams that you choose yourself
Case study based on a particular industry
marked by week 1 LT, not counting towards grade
set Week 11 MT, return by week 11 LT
Work in teams chosen at random
Original analysis of a business that you select
counts towards grade

(Exam in ST will cover MG101.2 only)

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Next week

Operations strategy and sustainability

Chapter 2 of textbook
Any questions?

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