Welcome to one and all!!!

Delighted to be a part of your journey in Operations Management

Presenter Profile
• Dr. Meghna Maity
• Ph.D. in Operations Research from Kansas State University, USA.
• Research interest(s): Stochastic Optimization; Food supply chain;
Blockchain; logistics
• Contact at: mmaity@uow.edu.au
Operations Management
An introduction and a primer
Objectives
• What is Operations Management (OM)?
• Historical developments in Operations and SCM
• Organizing to produce goods and services
• What Operations Managers do?
• Operations and supply chain processes
• The OM fit in an organization
• Career avenues in Operations and SCM
• Current trends/ issues in Operations and SCM
3 steps for an organization’s survival
• Marketing
• Production/Operations
• Finance
What is Operations Management (OM)
• OM refers to the activities that relate to the creation of goods and
services (production) through the transformation of inputs to outputs.
• Involves
• Product design
• Purchasing
• Manufacturing
• Service operations
• Logistics
• Distribution
 Basic Definitions
• Operations: refers to the processes that transform the resources employed by a firm into products
and services desired by customers.
• The part of a business organization that is responsible for producing goods or services.

• Process: Any activity or group of activities that takes one or more inputs, transforms them and provide one or more
outputs for its customer. Transformation process means series of activities along a value chain extending from
supplier to customer.

• Operations and Supply Chain Management (OSCM): is about getting work done quickly, efficiently, without error and
at low cost.
• OSCM is defined as design, operation and improvement of the systems that create and deliver firm’s primary product
and services.

System Primary inputs Resources Primary transformation Typical output

function desired
Automobile factory Sheet steel, engine parts Tools, equipment, workers Fabrication and assembly of cars High quality car
(physical)

University Graduates Teachers, Books, Imparting Knowledge and skills Educated individuals
Classrooms
Historical Developments in Operations
and SCM (Fig 1.3)
Manufacturing strategy developed
Late 1970s
Just-in-time (JIT) production
Early 1980s pioneered by the Japanese
Mid 1980s Service quality and productivity
Total quality management Early 1990s
(TQM) and Quality Six-sigma quality
certification programs Mid 1990s Supply chain
Business process management (SCM)
Late 1990s
reengineering (BPR)
Electronic commerce
Early 2000s Service science

Mid 2010s
Business analytics Early 2020s
Industry 4.0 Sustainability
Disruptive Triple Bottom
Technologies Line
Organizing to produce goods and services
• Marketing
• Production/Operations
• Finance

Figure (1.1) text book

Organizing to produce goods and services
• Difference between goods and services
 Goods vs Services
Go Ser
od vic
s es

Pure Goods Core Goods Core Services Pure Services

Tangible
Less interaction with customers
Often homogeneous
Not perishable – can be inventoried
Intangible
Interaction with customer required
Inherently heterogeneous
Perishable/time dependent
Defined and evaluated as a package of
features
Why study OM?
• 4 main reasons
What Operations Managers do?
• 10 decisions
Ten Decision Areas of OM (Table 1.2)

• Design of Goods and Services

• Quality Management
• Process and capacity Design
• Location Strategy
• Layout Design and Strategy
• Human Resources and Job Design
• Supply Chain Management
• Inventory Management
• Scheduling
• Maintenance
Decision Making in OM
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 the product or service be designed? How will the work be done? How will
resources be allocated?
 Who: Who will do the work?
 Whom: For whom we do it?
Strategic Decisions
• Strategic planning is an organization’s process of defining its strategy, or direction, and making
decisions on allocating its resources to pursue this strategy.
• Generally, strategic planning deals, on the whole business, rather than just an isolated unit, with at
least one of following three key questions: These decisions are of strategic importance and have
long-term significance for the organization.
• Examples include deciding:
• the design for a new product’s production process
• where to locate a new factory
• whether to launch a new-product development plan.
What?
How?
For whom?
Tactical Decisions
• Tactical planning is short range planning emphasizing the current
operations of various parts of the organization.
• These decisions relate to the implementation of strategic decisions.
They are directed towards developing divi­sional plans, structuring
workflows, establishing distribution chan­nels, acquisition of resources
such as men, materials and money.
• These decisions are taken at the middle level of management.
• These decisions are necessary if the ongoing production of goods and
services is to satisfy market demands and provide profits.
• Examples include deciding:
• how much finished-goods inventory to carry
• the amount of overtime to use next week
• the details for purchasing raw material next month
Operational Decision Making
• Operational planning is the process of linking strategic goals and
objectives to tactical goals and objectives. It describes milestones,
conditions for success and explains how, or what portion of, a strategic
plan will be put into operation during a given operational period.
An operational plan addresses four questions:
• Where are we now?
• Where do we want to be?
• How do we get there?
• How do we measure our progress?
• These decisions relate to day-to-day op­erations of the enterprise. They
have a short-term horizon as they are taken repetitively. These
decisions are based on facts regarding the events and do not require
much of business judge­ment.
• Operational decisions are taken at lower levels of man­agement.
• As the information is needed for helping the manager to take rational,
well-informed decisions, information systems need to fo­cus on the
process of managerial decision making.
• These decisions concern the day-to-day activities of workers, quality
of products and services, production and overhead costs, and machine
maintenance.
An Example…
• If an organization makes furniture, some of the operations
management decisions involve the following:
• purchasing wood and fabric,
• hiring and training workers,
• location and layout of the furniture factory,
• purchase cutting tools and other fabrication equipment.
• If the organization makes good operations decisions, it will be able to
produce affordable, functional, and attractive furniture that customers
will purchase at a price that will earn profits for the company.
A successful operations strategy
depends upon
• Strategy planning and execution
• Processes to deliver products and services
• Analytics to support the decisions needed to manage the firm
• What else? – support from other disciplines
The OM fit in an organization

Finance
Sales HRM

OM
QA
Marketing

MIS Accounting
Engineering
Operations and Supply Chain Processes

Operation Supply
s Chain
Manufacturing
and service Processes that
processes used to move information
transform and material to
resources into and from the firm
products
Operations and Supply Chain Processes
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 firm’s 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
 Production System

Conversion
Inputs Outputs
Subsystem

Control
Subsystem
Inputs in an Operations System
• External
• Legal, Economic, Social, Technological
• Market
• Competition, Customer Desires, Product Info.
• Primary Resources
• Materials, Personnel, Capital, Utilities
Conversion Subsystem
• Physical (Manufacturing)
• Locational Services (Transportation)
• Exchange Services (Retailing)
• Storage Services (Warehousing)
• Other Private Services (Insurance)
• Government Services (Federal)
Outputs of an Operations System
• Direct
• Products
• Services
• Indirect
• Waste
• Pollution
• Technological Advances
Career Avenues in Operations and SCM

Hospital Branch Department

Plant manager
administrator manager store manager

Quality
Call center Supply chain Purchasing
control
manager manager manager
manager
Business
Lean
process Project Production
improvement
improvement manager control analyst
manager
analyst
Chief
Facilities
operating
manager
officer
Current Trends in Operations and SCM
• Coordinating relationships between members of SC
• Optimizing glocal network of suppliers, producers, and distributors
• Adoption and implementation of disruptive technologies/ technology scaling
up (or) Rapid Expansion of Advanced Technologies
• Raising awareness of OSCM as a competitive weapon
• Sustainability and triple bottom line
• Global Competition
• Quality, Customer Service, and Cost Challenges
• Continued Growth of the Service Sector
• Scarcity of Operations Resources
• Social-Responsibility Issues
Thank you…
• Questions please…