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1 Introduction
1 Introduction
Principles of Operations
Management
Lecture 1
Introduction
Course Administration
Subject Code : LGT2106
Subject Title : Principles of Operations
Management
Lecturer : Dr. Anthony Pang
Contact : Room M625 (Tel: 2766-4126)
anthony.pang@polyu.edu.hk
3
Course Administration
Assessment Components
COURSEWORK: 50%
Case Study/Project 15%
Quiz (2 quizzes) 10%
Midterm Exam 20%
Class Participation 5%
EXAMINATION: 50%
• References:
– Krajewski, L. J., Ritzman, L. P., Malhotra, M. K., (2013), Operations management : processes
and supply chains (10th ed.), Pearson/Prentice Hall.
– Schroeder, R. G., Goldstein, S. M., Rungtusanatham, M. J., (2013), Operations management in
the supply chain : decisions and cases, McGraw-Hill.
– Jacobs, F. R., (2014), Operations and supply chain management (14th ed.), McGraw-Hill.
– Chase, R. B., Jacobs, F. R., and Aquilano, N. J., (2006), Operations management for competitive
advantage (11th ed.), McGraw-Hill.
Lecture Topics
Lecture Topic
1 Introduction to Operations Management
2 Supply Chain Management
3 Forecasting
4 Aggregate Planning and Capacity Management
5 Facility Location and Layout
6 Operations Scheduling
7 Project Management
8 Quality Management
9 Inventory Management
What Is Operations Management?
• Operations Management
– Management of the conversion process which
transforms inputs such as raw material and labor into
outputs in the form of finished goods and services.
Inputs Outputs
(customers Transformation Process (goods
and/or (components) and
materials) services)
Role of OM within an Organization
Exhibit 1.1
Top-down Approach to OM Strategy
• Operations Strategy Decisions
– Strategic (long-range)
• Needs of customers (capacity planning)
– Tactical (medium-range)
• Efficient scheduling of resources
– Operational planning
and control (short-range)
• Immediate tasks and activities
An Operational-Level OM Perspective
• OM’s function focuses on adding value through the
transformation process (technical core) of converting
inputs into outputs.
– Physical: manufacturing
– Locational: transportation
– Exchange: retailing
– Storage: warehousing
– Physiological: health care
– Informational: telecommunications
The Transformation Process within OM
Exhibit 1.2
Input-Transformation-Output
Relationships for Typical Systems
Exhibit 1.3
OM’s Contributions to Society
• Higher Standard of Living
– Ability to increase productivity
– Lower cost of goods and services
2010 Statistics
United States 76.7%
United Kingdom 77.1%
France 79.0%
Canada 71.3%
Japan 75.7%
Brazil 67.5%
Thailand 44.0%
Peru 52.6%
India 55.3%
Ghana 41.6%
China 43.6%
Hong Kong 92.3%
Macau 97.1%
Growth in Services in the United States
83.5%
16.5%
2010
Exhibit 1.7
Most Products Are a “Bundle”
of Goods and Services
Exhibit 1.8
Inputs Provided by OM to Other
Functional Areas
Exhibit 1.12
The Value Chain and Its Support Functions
Value Chain
All steps an organization requires to produce a good or a service
regardless of where they are performed. This concept attempts to
eliminate all non-value-added steps (such as inspections and inventory).
Exhibit 1.10
Competitive Dimensions
• Price: make the product or deliver the service cheap