GMS 401 Final: GMS 401 FINAL EXAM NOTES WITH TEXTBOOK
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What is Operations?
➢ Delivering value by the proper execution of strategic goals
Execution
➢ Transforms Inputs into Outputs
INPUT→
BUY
→
MAKE/CREATE
→
SELL →
OUTPUTS
INPUT
- Capital
- Materials
- Equipment
- Facilities
- Labour
- Knowledge
- Time
TRANSFORMATION
➢ Buy
➢ Make/Create
➢ Sell
➢ Move
OUTPUTS
➢ Products
➢ Services
1. The discipline and integral to strategy
2. Major job of the business leader
3. Must be a oe eleet of a ogaizatio’s ultue.
Operations
➢ Set of activities that create value in the form of goods and services by
transforming inputs into outputs.
Operations
Management
➢ The design (planning, organizing) execution (staffing, leading) and
improvement (controlling) of these transformation processes that create value
Why study Operations Management?
1. One of the three major functions of any organizations. The importance of how
people organize themselves for productive enterprise.
2. The want and need to know how goods and services are produced
3. Want to understand what operations managers do
4. It is a costly part of an organization
Organizing to Produce
Goods and Services
FUNCTIONS:
1. Marketing – generates demand
2. Production/Operations – Create the product
3. Finance/Accounting – Tracks how well the organization is doing, pay bills,
collect the money
Decision Making
Good Decision
- One that uses analytic decision making based on logic and considers all
available data and possible alternatives.
6 Steps:
1. Clearly define the problem and the factors that influence it
2. Develop specific and measurable objectives
3. Develop a model-that is, a relationship between objectives and variables
(which are measurable quantities)
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4. Evaluate each alternative solution based on its merits and drawbacks
5. Select the best alternative
6. Implement the decision and set a timetable for completion.
Critical Decisions
1. Design of goods and services
➢ What goods and services should we offer?
➢ How should we design these products and services?
2. Managing Quality
➢ How do we define quality?
➢ Who is responsible for quality?
3. Process and Capacity design
➢ What process and what capacity will these products require?
➢ What equipment and technology is necessary for these processes?
4. Location Strategy
➢ Where should we put the facility
➢ On what criteria should we base the location decision?
5. Layout Strategy
➢ How should we arrange the facility?
➢ How large must the facility be to meet our plan?
6. Human resources and job design
➢ How do we provide a reasonable work environment?
➢ How much can we expect our employees to produce?
7. Supply Chain Management
➢ Should we make or buy this component?
➢ Who should be our supplier and how can we intergrade them into our
strategy?
8. Inventory, material requirements planning (MRP) and JIT
➢ Ow much inventory of each item should we have?
➢ We do we reorder?
9. Intermediate and Short Term Scheduling
➢ Are we better off keeping people on the pay roll during slowdowns?
➢ Which jobs do we perform next?
10. Maintenance
➢ How do we build reliability into our processes?
➢ Who is responsible for maintenance?
The Heritage of OM
➢ Division of Labour (Adam Smith 1776; Charles Babbage 1852)
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➢ Standardized parts (Whitney 1800)
➢ Scientific Management (Taylor 1881)
➢ Coordinated Assembly Line (Ford/Sorenson 1913)
➢ Gantt Charts (Gantt 1916)
➢ Motion Study (Frank and Lillian Gilbreth 1922)
➢ Quality Control (Shewhart 1924; Deming 1950)
Other Historical Disciplines Impacting OM
➢ Analytics and Big Data
➢ Physical Sciences (new materials/Technology)
➢ Information Technology (Computer aided design, Enterprise resource
planning, computer integrated manufacturing)
➢ Flexible manufacturing system
➢ Globalization
➢ Internet
New Challenges in
Operations
Management
From
→
To
Local or National
→
Global Focus
Batch Shipments
→
Just in time
Low Bid Purchasing
→
Supply-chain partnering
Lengthy Product
Development
→
Rapid Product Development
alliances
Standard products
→
Mass Customization
Job Specialization
→
Empowered employees, teams
New Trends in
Operations
Management
➢ Ethics
➢ Global Focus
➢ Environmentally sensitive production
➢ Mass Customization
➢ Empowered employees
➢ Supply-Chain Partnering
➢ Just in time performance
Changing Challenges
Traditional
Approach
Reasons for
Change
Current Challenge
Ethics and
regulations not at
the forefront
→
Public concern
over pollution,
corruption, child
labour etc.
→
High ethical and social
responsibility;
increased legal and
professional standards
Local or national
focus
→
Growth of reliable,
low cost
communication
and transportation
→
Global focus,
international
collaboration
Lengthy Product
Development
→
Shorter life cycles;
growth of global
→
Rapid product
development; design
collaboration
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Document Summary
Delivering value by the proper execution of strategic goals. Labour: the discipline and integral to strategy, major job of the business leader, must be a (cid:272)o(cid:396)e ele(cid:373)e(cid:374)t of a(cid:374) o(cid:396)ga(cid:374)izatio(cid:374)"s (cid:272)ultu(cid:396)e. Set of activities that create value in the form of goods and services by transforming inputs into outputs. The design (planning, organizing) execution (staffing, leading) and improvement (controlling) of these transformation processes that create value. Why study operations management: one of the three major functions of any organizations. The importance of how people organize themselves for productive enterprise: the want and need to know how goods and services are produced, want to understand what operations managers do, it is a costly part of an organization. Functions: marketing generates demand, production/operations create the product, finance/accounting tracks how well the organization is doing, pay bills, One that uses analytic decision making based on logic and considers all available data and possible alternatives. Critical decisions: design of goods and services.