Description
Answer the following question based on the reading from Chapter 1.Why do people do things that are unethical? You may use the book as a reference along with 2 other peer reviewed journal articles to support your answer.
Unformatted Attachment Preview
Introduction to
Operations
Management
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
You should be able to:
LO 1.1
LO 1.2
Define the terms operations management and supply chain
Identify similarities and differences between production and service
operations
LO 1.3 Explain the importance of learning about operations management
LO 1.4 Identify the three major functional areas of organizations and explain
how they interrelate
LO 1.5 Summarize the two major aspects of process management
LO 1.6 Describe the operations function and the nature of the operations
manager’s job
LO 1.7 Explain the key aspects of operations management decision making
LO 1.8 Briefly describe the historical evolution of operations management
LO 1.9 Describe the current issues in business that impact operations
management
LO 1.10 Explain the need to manage the supply chain
1-2
What is operations?
The part of a business organization that is responsible
for producing goods or services
How can we define operations management?
The management of systems or processes that create
goods and/or provide services
LO 1.1
1-3
Goods are physical items that include raw materials, parts,
subassemblies, and final products.
•Automobile
•Computer
•Oven
•Shampoo
Services are activities that provide some combination of time, location,
form or psychological value.
•Air travel
•Education
•Haircut
•Legal counsel
LO 1.1
1-4
Supply Chain – a sequence of activities and
organizations involved in producing and delivering
a good or service
Suppliers’
suppliers
LO 1.1
Direct
suppliers
Producer
Distributor
Final
Customers
1-5
Value-Added
Inputs
•Land
•Labor
•Capital
•Information
Transformation/
Conversion
Process
Outputs
•Goods
•Services
Measurement
and Feedback
Measurement
and Feedback
Control
Measurement
and Feedback
Feedback = measurements taken at various points in the transformation process
Control = The comparison of feedback against previously established
standards to determine if corrective action is needed.
LO 1.1
1-6
Products are typically neither purely service- or purely goodsbased.
Goods
Services
Surgery, Teaching
Songwriting, Software Development
Computer Repair, Restaurant Meal
Home Remodeling, Retail Sales
Automobile Assembly, Steelmaking
LO 1.2
1-7
Degree of customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
9. Evaluation of work
10. Ability to patent design
1.
LO 1.2
1-8
Every aspect of business affects or is affected by
operations
Many service jobs are closely related to operations
Financial services
Marketing services
Accounting services
Information services
Through learning about operations and supply chains
you will have a better understanding of:
The world you live in
The global dependencies of companies and nations
Reasons that companies succeed or fail
The importance of working with others
LO 1.3
1-9
Organization
Marketing
LO 1.4
Operations
Finance
1-10
Finance & Operations
Budgeting
Economic analysis of investment
proposals
Provision of funds
Marketing & Operations
Demand data
Product and service design
Competitor analysis
Lead time data
LO 1.4
1-11
Operations manager
Supply chain manager
Production analyst
Schedule coordinator
Production manager
Industrial engineer
Purchasing manager
Inventory manager
Quality manager
1-12
APICS – The Association for Operations Management
American Society for Quality (ASQ)
Institute for Supply Management (ISM)
Institute for Operations Research and Management Science
(INFORMS)
The Production and Operations Management Society (POMS)
The Project Management Institute (PMI)
Council of Supply Chain Management Professionals (CSCMP)
1-13
Process – one or more actions that transform inputs into outputs
Three Categories of Business Processes:
LO 1.5
Upper-management processes
These govern the operation of the entire
organization.
Operational processes
These are core processes that make up the
value stream.
Supporting processes
These support the core processes.
1-14
Operations &
Supply Chains
Supply
LO 1.5
Supply
Supply
Sales & Marketing
>
Demand
Wasteful
Costly
<
Demand
Opportunity Loss
Customer
Dissatisfaction
=
Demand
Ideal
1-15
Four Sources of Variation:
Variety of goods or services
being offered
The greater the variety of goods and services
offered, the greater the variation in production
or service requirements.
Structural variation in demand
These are generally predictable. They are
important for capacity planning.
Random variation
Natural variation that is present in all
processes. Generally, it cannot be influenced
by managers.
Assignable variation
Variation that has identifiable sources. This
type of variation can be reduced, or
eliminated, by analysis and corrective action.
Variations can be disruptive to operations and supply chain processes.
They may result in additional costs, delays and shortages, poor
quality, and inefficient work systems.
LO 1.5
1-16
The scope of operations management ranges across
the organization.
The operations function includes many interrelated
activities such as:
LO 1.6
Forecasting
Capacity planning
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
1-17
The Operations Function consists of all activities
directly related to producing goods or providing
services.
A primary function of the operations manager is to
guide the system by decision making.
System Design Decisions
System Operation Decisions
LO 1.6
1-18
• System Design
– Capacity
– Facility location
– Facility layout
– Product and service planning
– Acquisition and placement of equipment
• These are typically strategic decisions that
• usually require long-term commitment of resources
• determine parameters of system operation
LO 1.6
1-19
• System Operation
• These are generally tactical and operational decisions
– Management of personnel
– Inventory management and control
– Scheduling
– Project management
– Quality assurance
• Operations managers spend more time on system operation
decision than any other decision area
• They still have a vital stake in system design
LO 1.6
1-20
Most operations decisions involve many alternatives that can
have quite different impacts on costs or profits
Typical operations decisions include:
What: What resources are needed, and in what amounts?
When: When will each resource be needed? When should the work be
scheduled? When should materials and other supplies be ordered?
Where: Where will the work be done?
How: How will he product or service be designed? How will the work be
done? How will resources be allocated?
Who: Who will do the work?
LO 1.7
1-21
Modeling is a key tool used by all decision makers
Model - an abstraction of reality; a simplification of something.
Common features of models:
They are simplifications of real-life phenomena
They omit unimportant details of the real-life systems they
mimic so that attention can be focused on the most important
aspects of the real-life system
LO 1.7
1-22
Keys to successfully using a model in decision
making
What is its purpose?
How is it used to generate results?
How are the results interpreted and used?
What are the model’s assumptions and limitations?
LO 1.7
1-23
1.
Models are generally easier to use and less expensive than dealing
with the real system
2.
Require users to organize and sometimes quantify information
3.
Increase understanding of the problem
4.
Enable managers to analyze “What if?” questions
5.
Serve as a consistent tool for evaluation and provide a standardized
format for analyzing a problem
6.
Enable users to bring the power of mathematics to bear on a problem.
LO 1.7
1-24
Quantitative information may be emphasized at the
expense of qualitative information
Models may be incorrectly applied and the results
misinterpreted
This is a real risk with the widespread availability of
sophisticated, computerized models are placed in the
hands of uninformed users.
The use of models does not guarantee good decisions.
LO 1.7
1-25
A decision making approach that frequently seeks to
obtain a mathematically optimal solution
Linear programming
Queuing techniques
Inventory models
Project models
Forecasting techniques
Statistical models
LO 1.7
1-26
Performance Metrics
All managers use metrics to
manage and control operations
Profits
Costs
Quality
Productivity
Flexibility
Inventories
Schedules
Forecast accuracy
LO 1.7
Analysis of Trade-Offs
A trade-off is giving up one
thing in return for
something else
Carrying more inventory
(an expense) in order to
achieve a greater level of
customer service
1-27
System - a set of interrelated parts that must work together
The business organization is a system composed of subsystems
marketing subsystem
operations subsystem
finance subsystem
The systems approach
Emphasizes interrelationships among subsystems
Main theme is that the whole is greater than the sum of its parts
The output and objectives of the organization take precedence over those
of any one subsystem
LO 1.7
1-28
In nearly all cases, certain issues or items are more
important than others
Recognizing this allows managers to focus their attention
to those efforts that will do the most good
Pareto Phenomenon - a few factors account for a high percentage of
occurrence of some event(s)
The critical few factors should receive the highest priority
This is a concept that is appropriately applied to all areas and
levels of management
LO 1.7
1-29
Industrial Revolution
Scientific Management
Human Relations Movement
Decision Models and Management Science
Influence of Japanese Manufacturers
LO 1.8
1-30
Pre-Industrial Revolution
Craft production - System in which highly skilled workers use simple,
flexible tools to produce small quantities of customized goods
Some key elements of the industrial revolution
Began in England in the 1770s
Division of labor - Adam Smith, 1776
Application of the “rotative” steam engine, 1780s
Cotton Gin and Interchangeable parts - Eli Whitney, 1792
Management theory and practice did not advance appreciably
during this period
LO 1.8
1-31
Movement was led by efficiency engineer, Frederick
Winslow Taylor
Believed in a “science of management” based on observation,
measurement, analysis and improvement of work methods, and
economic incentives
Management is responsible for planning, carefully selecting and
training workers, finding the best way to perform each job,
achieving cooperation between management and workers, and
separating management activities from work activities
Emphasis was on maximizing output
LO 1.8
1-32
The human relations movement emphasized the
importance of the human element in job design
Lillian Gilbreth – applications of psychology
Elton Mayo – Hawthorne studies on worker motivation, 1930
Abraham Maslow – motivation theory, 1940s; hierarchy of needs,
1954
Frederick Hertzberg – Two Factor Theory, 1959
Douglas McGregor – Theory X and Theory Y, 1960s
William Ouchi – Theory Z, 1981
LO 1.8
1-33
F.W. Harris – mathematical model for inventory management, 1915
Dodge, Romig, and Shewart – statistical procedures for sampling and
quality control, 1930s
Tippett – statistical sampling theory, 1935
Operations Research (OR) Groups – OR applications in warfare
George Dantzig – linear programming, 1947
LO 1.8
1-34
Refined and developed management practices that
increased productivity
Credited with fueling the “quality revolution”
Just-in-Time production
LO 1.8
1-35
Economic conditions
Innovating
Quality problems
Risk management
Competing in a global economy
LO 1.9
1-36
Sustainability
Using resources in ways that do not harm ecological
systems that support human existence
Sustainability measures often go beyond traditional
environmental and economic measures to include measures
that incorporate social criteria in decision making
All areas of business will be affected
Product and service design
Consumer education programs
Disaster preparation and response
Supply chain waste management
Outsourcing decisions
LO 1.9
1-37
Financial statements
Worker safety
Product safety
Ethical issues arise in many
aspects of operations
management:
Quality
The environment
The community
Hiring and firing workers
Closing facilities
Workers rights
LO 1.9
1-38
In the past, organizations did little to manage the
supply chain beyond their own operations and
immediate suppliers which led to numerous problems:
Oscillating inventory levels
Inventory stockouts
Late deliveries
Quality problems
LO 1.10
1-39
1.
2.
3.
4.
5.
6.
7.
8.
The need to improve operations
Increasing levels of outsourcing
Increasing transportation costs
Competitive pressures
Increasing globalization
Increasing importance of e-business
The complexity of supply chains
The need to manage inventories
LO 1.10
1-40
Purchase answer to see full
attachment