Welcome to the
Operations Management
Course… ☺
1
Fall 2022 – Class Logistics
◼ We will have in-class sessions at SolBridge (Sec 2 – 706; 13.00 hrs,
Tue/Thu)
◼ However, some students are not yet here in Korea and are sorting out their
travel / Quarantine / etc.
◼ SolBridge has extended a brief grace period of for such students and you may
attend the class online for those initial few days
◼ I will be happy to support you online
2
For Students who are
currently online:
Once you join the meeting,
Please Enter your
Registration number followed
by your name in the chat
window (RegNo._Full name)
RegNo. – is your student number
3
Syllabus & Textbook
Please go through your Syllabus
(LMS Course-Summary at the top of
the course page)
Pedagogy
Student Expectations
Course Evaluation Components
Textbook
Session Plan
4
Introduction to
Operations Management
These slides are only for the learning purposes of the
Operations Management course. Do not distribute these
slides. Slides are not a substitute for readings / textbook
and are only meant to complement the textbook and
readings.
5
Operations Management defined
◼ The management (Design, Operation and Improvement) of the
system that create & deliver the firm’s products & services
◼ Such a system is the production system
◼ Produces both products & services
◼ Involved in a process of Transformation of Inputs into Outputs using
some Resources
Few
Value added Examples??
Inputs Transformations
Land Transformation/ Outputs
Goods
Labor Conversion ◼ Physical
Services
Capital process
◼ Locational
Feedback
◼ Exchange
Control ◼ Storage
Feedback Feedback ◼ Physiological
◼ Informational
6
Success depends on…..
◼ Clever integration of a great
operations-related strategy
◼ Processes to deliver products
and services
◼ Analytics to support the
decisions needed to manage
the firm
7
Operations & Supply Chain
Supply
Operations
Chain
Manufacturing and Processes that
service processes move information,
used to transform material and cash
resources into to and from the
products firm
8
Manufacturing Products Vs Delivering Services
Characteristic Manufacturing Service Characteristic Manufacturing Service
Output Tangible Intangible Measurement of productivity Easy Difficult
Customer contact Low High Opportunity to correct High Low
quality problems
Uniformity of input High Low Inventory High Low
Labor content Low High Evaluation Easier More
Difficult
Uniformity of output High Low Patentable Usually Not Usually
Farming Restaurant?? S/W Dvpmt??
Products??
Steel production Home remodeling Auto Repair Maid Service Teaching
Automobile fabrication Retail sales Appliance repair Manual car wash Surgery
High percentage goods Low percentage goods
Low percentage service High percentage service
9
Why Study Operations Management?
◼ Source of creating value to customers through
competitiveness (Effectiveness + Efficiency)
◼ Makes business education complete (holistic)
◼ Provides a systematic way of looking at
organizational processes
◼ Presents interesting career opportunities
◼ OM tools & concepts are used across functions of
an organization: Interface
Industrial
Engineering
Maintenance
Distribution
Purchasing Public
Operations Relations
Legal
Personnel
Accounting MIS 10
Operations vs. Sales Strategy
ABC Inc.
60% of sales $ in supply chain
Current gross profit = $10,000
Increase profits to $15,000 (50%)
CURRENT OPERATIONS SALES
SITUATION STRATEGY STRATEGY
Sales $100,000 $100,000 $125,000
Cost of materials $60,000 (60%) $55,000 (55%) $75,000 (60%)
Production costs $20,000 (20%) $20,000 (20%) $25,000 (20%)
Fixed costs $10,000 (10%) $10,000 (10%) $10,000 (8%)
Profit $10,000 (10%) $15,000 (15%) $15,000 (12%)
Efficiency, Effectiveness, and Value
◼ Efficiency - doing something at the lowest possible cost
◼ Effectiveness - doing the right things to create the most
value for the company
◼ Value - quality divided by price
◼ Quality - the attractiveness of the product,
considering its features and durability
How Does Wall Street Evaluate Efficiency?
◼ Earnings growth is largely a function of profitability
◼ Profits can be increased through higher sales or lower
cost
◼ Highly efficient firms usually do well during recessions
◼ Benchmarking - a process in which one company
studies the processes of another company (or industry)
to identify best practices
Management Efficiency Ratios
Dell Supply Chain-Early 2000s
Accounts Payable Cycle
~45 days – The credit time that
Dell has to pay its suppliers
Inventory Cycle - The
days sales of
inventory ~6 days
Accounts Receivable Cycle
~ 10 days in advance! 15
Possible Careers in OSCM
Hospital Department store
Plant manager Branch manager
administrator manager
Call center Supply chain Purchasing Quality control
manager manager manager manager
Business
Lean
process Production
improvement Project manager
improvement control analyst
manager
analyst
Facilities Chief operating
manager officer
Watch the video: What do Operations Managers do? (Link on LMS week1)
Current Issues & Trends in OM
◼ Effective consolidation of operations during
Mergers
◼ Developing flexible supply chains
Enterprise (and Beyond) IT,
◼ Managing global supply, production and Internet, e-Commerce,
distribution networks Globalization, Technology led
Miniaturization, Big-Data, Mobility,
◼ Achieving the ‘Service Factory’ Social Media, Cloud, Supply Chain
Focus, Outsourcing, Global
◼ Increasing market pressures for rapid new Standards & Norms, Sustainability
product development
◼ Cost Reduction – low-cost country sourcing,
Services off-shoring
◼ Uncertain environment! – It has become the
norm
Watch videos on OM & Future trends –
LMS Week 1
◼ Value addition, Value addition, Value addition –
The Only Mantra!
17
Thank you
18
