Chapter 1 - Introduction to

Operations Management

Operations Management
by

R. Dan Reid & Nada R. Sanders

2nd Edition © Wiley 2005

PowerPoint Presentation by R.B. Clough - UNH

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What is Operations Management?

The business function responsible for

planning, coordinating, and
controlling the resources needed to
produce a company’s products and
services

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Typical Organization Chart

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Business Information Flow

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OM’s Transformation Role

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Productivity

Outputs
P
Inputs

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Differences between Manufacturers
and Service Operations

 Services:
 Intangible product
 Service cannot be
inventoried
 High customer contact
 Short response time
 Labor intensive
 Manufacturers:
 Tangible product
 Product can be
inventoried
 Low customer contact
 Longer response time
 Capital intensive

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Service and Manufacturers
 All use technology
 Both have quality, productivity, & response
issues
 All must forecast demand
 Each will have capacity, layout, and location
issues
 All have customers and suppliers
 All have scheduling and staffing issues

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Trends in OM
 Service sector growing
to 80% of non-farm
jobs- See Figure 1-4
 Global operations
 Demands for higher
quality
 Huge technology
changes
 Time based competition

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OM Decisions

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Operations Management
Decisions
 Strategic:
 Product/Service
Design
 Process Selection
 Capacity Planning
 Facility Location
 Facility Layout
 Job Design
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 Tactical:
 Quality Control
 Demand Forecasting
 Supply Chain
Management
 Production Planning
 Inventory Control
 Scheduling
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