MBALN-670 Operations and Quality ManagementTitle of the topic Introduction to Operations Management and Operations Strategy Learning Objectives 1. Identify and critique the strategic frameworks of operations and quality management within a global business environment. 2. Comprehensive knowledge of the main concept and methods related to designing and managing operations and supply chains. Introduction Operation Management is responsible for planning, coordinating, and controlling the resources needed to produce products and services for a company. It’s the organization’s core function o OM (operations management) transforms inputs (inputs are resources such as people, material, and money) to outputs (outputs are goods and services) o It adds value to the business o Increases product value at each stage o Value added is the net increase between output product value and input material value o Provide an efficient transformation o Efficiency – means performing activities well for least possible cost o All organizations make decisions and follow a similar path Tactical decision o Tactical decisions: focus on specific day-to-day issues like resource needs.o First decisions very broad – Strategic decisions o Strategic Decisions – set the direction for the entire company. schedules. & quantities to produce o are frequent o Strategic decisions less frequent o Tactical and Strategic decisions must align o Customers demand better quality. greater speed. they are broad in scope and long-term in nature o Following decisions focus on specifics . and lower costs o Companies implementing lean system concepts – a total systems approach to efficient operations o Recognized need to better manage information using ERP and CRM systems o Increased cross-functional decision making . operation.Lecture Material What is Operations Management? Design. and improvement of productive systems What is Operations? A function or system that transforms inputs into outputs of greater value What is a Transformation Process? A series of activities along a value chain extending from supplier to customer Activities that do not add value are superfluous and should be eliminated The main functions of an organization are: o Operations o Marketing o Finance and Accounting o Human Resources o Outside Suppliers . Deploying the strategy Operations strategy. Determining order winners and order qualifiers .What is the firm in the business of doing? 2. . Assessing core competencies .provides direction for achieving a mission There are 5key steps for Strategy Formulation 1. capacity information.How will the firm compete? 5. Positioning the firm . Marketing is not fully able to meet customer needs if they do not understand what operations can produce Finance cannot judge the need for capital investments if they do not understand operations concepts and needs Information systems enables the information flow throughout the organization Human resources must understand job requirements and worker skills Accounting needs to consider inventory management.What qualifies an item to be considered for purchase? . Defining a primary task .What wins the order? 4. and labour standards Strategy and Operations Strategy . along with financial strategy and marketing strategy all driven from the organisations corporate strategy.What does the firm do better than anyone else? 3. or better than competitors Strategy is a plan for competing in the marketplace Operations strategy ensures all tasks performed are the right tasks Consider these factors and strategic decisions: 1) What is the business goal? (mission) 2) Does company understand the market? (environmental scanning) 3) What are the company strengths? (core competencies) Developing an Operations Strategy: Is a plan for the design and management of operations functions Is developed after the business strategy Focuses on specific capabilities which give it a competitive edge – competitive priorities Four Key Operations Questions: Can company compete on – Cost? Quality? Time? Flexibility? All of the above? Some? Tradeoffs? .Operational Strategy – Provides a plan that makes best use of resources and: Specifies the policies and plans for using organizational resources Supports Business Strategy Essential differences between operational efficiency and strategy: Operational efficiency is performing tasks well. com/watch?v=ZRcDVm6G50Y . and quality control approaches Videos You will find links to the videos on the VLE. skill/pay of workers.bbc. alternatively. http://news. click on the hyperlink below. and flow of goods and services Infrastructure – decisions related to planning and control systems of operations: organization of operation function. author and tutor of Operations Management and Strategy http://www.youtube. selection of appropriate technology. Translating Competitive Priorities into Production Requirements Specific Operation requirements include two general categories Structure – decisions related to the production process: characteristics of facilities used.co.uk/2/hi/business/7788605.stm Video interview with Professor Nigel Slack. Describe how an operations strategy is formulated from the business strategy. Think Theory 1 (Take a pen and write down your answer. attempt the Think Theory. Discussion Question Please participate in the discussion question within the VLE. 2. Share with others what you learned in the article. Fortune. Describe how a business strategy is developed. . Finally. Find an article that relates to operations management in the Wall Street Journal. and Or Business Week. As soon as you finish thinking and writing. 1. check at the end of the topic overview for feedback) 1. Business Strategy is a long range plan and vision. There are four categories of competitive priorities: cost. quality. An organization develops its business strategy by doing environmental scanning and considering its mission and its core competencies. The role of OM is to transform organizational inputs into company’s products or services outputs OM is responsible for a wide range of decisions. which differ in the tangibility of the product or service Many historical milestones have shaped OM. The operations strategy focuses on developing specific capabilities called competitive priorities. the human relations movement. scientific management. time-based competition. and environmental issues OM works closely with all other business functions Operations Strategy Strategic decisions of firm drive tactical decisions Business strategy defines long-term plan Operations strategy support the business strategy Marketing strategy needs to fully understand operations capability Financial plans in effect support operations activities. Organizations can be divided into manufacturing and service organizations.Topic’s summary OM is the business function that is responsible for managing and coordinating the resources needed to produce a company’s products and services. Each individual business function needs to support the business strategy. management science. The role of business strategy is to serve as an overall guide for the development of the organization’s operations strategy. Some of these are the Industrial Revolution. SCM. time. and the computer age OM is highly important function in today’s dynamic business environment. The role of operations strategy is to provide a long-range plan for the use of the company’s resources in producing the company’s primary goods and services. and flexibility. global marketplace. TQM. reengineering. ranging from strategic to tactical. Among the trends with significant impact are just-in-time. . flexibility. Productivity is computed as the ratio or organizational outputs divided by inputs. . who the customers will be.09.2012 3. and the core competencies of the company have been identified. while the infrastructure involves decisions related to the planning and control of the operation. Environmental scanning includes an examination of the current market trends in the market. resulting in an identification of opportunities and threats. 4th Edition. Operations Management.com/watch?v=ZRcDVm6G50Y accessed 17. Describe how an operations strategy is formulated from the business strategy. A business strategy is developed after the company’s mission. Technology can be used by companies to gain a competitive advantage and should be acquired to support the company’s chosen competitive priorities. Wiley Publishers 2. Reid R. and in society. The company should match its strengths to its business strategy. 2011. political environment. Material Sources 1.bbc.2012 Think Theory 1 Ideas Describe how a business strategy is developed. an understanding of the market (environmental scanning).. The mission involves the determination of what business to be in. The structure involves the decisions related to the design of the production process. and how the company’s beliefs will define the business.uk/2/hi/business/7788605.youtube. core competencies are the strengths of the company. Finally. these priorities are translated into production requirements related to the structure and infrastructure of the firm. The operations strategy is formulated by first determining the competitive priorities of the firm.stm accessed 17.co. http://www. Productivity is a measure that indicates how efficiently an organization is using its resources.09. Then. http://news. economy.