Category Archives: Introduction to Operations Management

TYPES OF INVENTORY SYSTEM

TYPES OF INVENTORY SYSTEM

requires that every time a withdrawal from or an addition to inventory is made. records must be updated to ensure that the reorder point has or has not been reached. For the fixed-time period  model. inventory is counted only at the end of the review period. 0 counting takes place in the interim (although some firms have created variations of systems that combine features of both). Some additional differences that tend to influence the choice of systems

Fixed-Order-Quantity and Fixed- Time-Period Systems

system focuses on order quantities and reorder points. Procedurally. each time a unit is taken ut of stock, the withdrawal is recorded and the amount remaining in inventory is immediately compared to the reorder point. If it has dropped to this point or below, an order for Q items is placed. If it has not, the system remains in an idle state until the next withdrawal. In the fixed-time-period system. a decision to place an order is made at a predetermined time interval (for example. each week or month). when the stock is counted or reviewed. Whether an order is actually placed depends on the inventory status at that time

Integration of Manufacturing and Services

Integration of Manufacturing and Services

More recently manager have recognized the importance of both manufacturing and cervices and the need to integrate the two primary objective of this text is to emphasize integrate integration Companies that want to succeed as world-class operations therefore must devote resources to both areas In addition production and service must be compatible with each other and strategically aligned with the firm's overall goals Operations management is recognized today as a critical functional area within every organization. No longer is operations management considered to be subservient to the financed marketing areas  instead it is lOW  treated as an equal. Firms that fail to recognize the significant contribution of the operations management function will lose profits and market share to those firms that do The once-reactive role of operations management which concentrated solely on minimizing costs  has been replaced by a more proactive position of maximizing the value added to the goods and services that the organization provides. Some of the  major issues facing operations management executives today in this constantly changing business environment include.

Reducing the development and manufacturing time for new goods and services.

  1. Achieving and sustaining high quality while controlling costs.
  2. Integrating new technologies and control systems into existing processes.
  3. Obtaining  training, and keeping qualified workers and managers.
  4. Working effectively with other functions of the business  marketing  engineering
  5. Integrating production and service activities at multiple sites in decentralized organizations.
  6. Working effectively with suppliers and being user-friendly for customers.
  7. Working effectively with new partners formed by strategic alliances for example IBM and Apple Computers  All of these issues are interrelated the key to success is for operations management to do all of these at a level that is competitive in both global and domestic markets.
  1. What is operations management and how is it different from operations research?
  2. What were the underlying reasons for the lack of emphasis on operations management in the post-World War II years?
  3. What are the advantage of bringing customers into the transformation process or technical core?
  4. Take a look at the want ads in The wall Street Journal and evaluate the opportunities for an I major with several ears of experience.
  5. What are the major factors leading to the resurgence of interest in OM today?
  6. Explain the difference from an operation management perspective between cost minimization and value maximization.
  7. Using Exhibit 1.3 as a model describe the input-transformation-output relationships found in the following systems.

a. An airline.
h.-A state penitentiary.
c. A branch bank.
d. A bakery.
e. A clothing manufacturer.
f A dry cleaner.
g. An automobile assembly line.
h. An accounting firm

8. What do we mean by the expression value chain, as it applies to the transformation process of a good or service?

9. Identify a product that is 100 percent goods without any service component. Identify a product that is 100 percent service without any goods component.

10. Speculate on the future role of the OM function within an organization and the future role of the operations manager.

 

OM in Services

OM in Services

As stated earlier Theodore Levitt was probably one of the first to demonstrate how many of the concepts and tools that had been developed for manufacturing operations could also be applied to service operations. By using these tools  services also could realize many of the inefficiencies of operation that had previously been limits to manufacturing. McDonald's provided several good examples of these applications from the efficient cooking and assembly of hamburgers in a batch operation to the use of specially designed scoops that quickly package french fries in consistent portion sizes.

The Marriage of OM and Information Technology

The Marriage of OM and Information Technology

Today as we noted earlier information technology (IT) plays a critical role in the design and management of production processes  Business process reengineering  supply chain management and sophisticated tools for systems integration such as SAP all defined later in the book require integrated solutions that marry OM and IT.  To illustrate a survey of consulting practice areas showed that 31 percent of the services offered by the 40 largest consulting firms were in the process operations management area which implies the blending of OM and IT. 10 Thus while information technology has always been a key factor in the management of factory operations its application throughout the firm to other functional areas such as marketing and finance suggests a major evolutionary step in the development of the field.

OM Emerges as a Field

OM Emerges as a Field

In the late 1950 and early 1960 scholars began to write texts dealing specifically with operations management as opposed to industrial engineering or operations research. Writers such as Edward Bowman and Robert Fetter Analysis or Production and Operations Management 1957 and Elwood S. Buffa  Modern Production Management CI 961 clearly noted the commonality of problems faced by all manufacturing organizations and emphasized the importance of viewing a production operation as a system. Today operations management is acknowledged as a legitimate functional area within many organizations be they for-profit or not-for-profit public or private manufacturing or service.