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Chapter 1: Intro to OM
Type Lecture
Lecture Lecture 1
Reviewed
ROLE OF OPERATIONS MANAGEMENT:
running a transformations process from start to end product
core business function of every company
its role is to transform organisation inputs into outputs
inputs → workers, managers, buildings, equipment, materials, tech, info
outputs → finished goods or services
responsible for planning, coordinating and controlling the resources needed to produce a company’s goods
and services
efficient operations management allows a company to perform better, cheaper and faster → competitive
advantage
Chapter 1: Intro to OM 1
, TYPES OF ORGANISATIONS
→ Manufacturing
tangible products
low customer contact and longer response times
capital-intensive
→ Services
intangible products (cannot be produced ahead of time)
high customer contact and short response time
labour-intensive
Chapter 1: Intro to OM 2
, ⇒ ex: postal services:
intangible product of speedy, reliable delivery of letters, documents and packages
yet, low customer-contact, large inventory, capital-intensive facilities and fleet
Operations management decisions:
Chapter 1: Intro to OM 3
, HISTORICAL MILESTONES
a product used to be unique and created by hand skilled craftspeople
Industrial Revolution
James Watt (1764): steam engine → from human to machine power
Adam Smith (1776): division of labour → specialisation
Eli Whitney (1790): interchangeable parts → standardisation
Scientific management (Taylorism):
Frederik Taylor (1900): salary-contingent performance standards based on scientific time study
Henry Ford (1913): moving assembly line → mass production
Human relations management:
Hawthrone effect (1930s): productivity increases if workers are given attention
Factors other than money contribute to productivity:
job enlargement ⇒ doing a larger portion of the total task
job enrichment ⇒ having a greater role in the planning
Management science:
quantitative decision-making tools (ex: inventory models, forecasting models, scheduling techniques,
statistical quality control)
developed to support military logistics during WWII
commercialised in the 1970s with the intro of computers in business
(trends in OM since 1960s-1970s)
Computer age:
enabled processing of large amounts of data and allowed the widespread use of quantitative procedures
Environmental issues:
considered waste reduction, the need fir recycling and product reuse
(trends in OM since 1980s)
Just-in-time systems
designed to achieve high-volume production with minimal inventories through elimination of waste and
continuous process improvement
Total quality
sought to eliminate causes of production defects making quality a responsibility of everyone
Chapter 1: Intro to OM 4
Chapter 1: Intro to OM
Type Lecture
Lecture Lecture 1
Reviewed
ROLE OF OPERATIONS MANAGEMENT:
running a transformations process from start to end product
core business function of every company
its role is to transform organisation inputs into outputs
inputs → workers, managers, buildings, equipment, materials, tech, info
outputs → finished goods or services
responsible for planning, coordinating and controlling the resources needed to produce a company’s goods
and services
efficient operations management allows a company to perform better, cheaper and faster → competitive
advantage
Chapter 1: Intro to OM 1
, TYPES OF ORGANISATIONS
→ Manufacturing
tangible products
low customer contact and longer response times
capital-intensive
→ Services
intangible products (cannot be produced ahead of time)
high customer contact and short response time
labour-intensive
Chapter 1: Intro to OM 2
, ⇒ ex: postal services:
intangible product of speedy, reliable delivery of letters, documents and packages
yet, low customer-contact, large inventory, capital-intensive facilities and fleet
Operations management decisions:
Chapter 1: Intro to OM 3
, HISTORICAL MILESTONES
a product used to be unique and created by hand skilled craftspeople
Industrial Revolution
James Watt (1764): steam engine → from human to machine power
Adam Smith (1776): division of labour → specialisation
Eli Whitney (1790): interchangeable parts → standardisation
Scientific management (Taylorism):
Frederik Taylor (1900): salary-contingent performance standards based on scientific time study
Henry Ford (1913): moving assembly line → mass production
Human relations management:
Hawthrone effect (1930s): productivity increases if workers are given attention
Factors other than money contribute to productivity:
job enlargement ⇒ doing a larger portion of the total task
job enrichment ⇒ having a greater role in the planning
Management science:
quantitative decision-making tools (ex: inventory models, forecasting models, scheduling techniques,
statistical quality control)
developed to support military logistics during WWII
commercialised in the 1970s with the intro of computers in business
(trends in OM since 1960s-1970s)
Computer age:
enabled processing of large amounts of data and allowed the widespread use of quantitative procedures
Environmental issues:
considered waste reduction, the need fir recycling and product reuse
(trends in OM since 1980s)
Just-in-time systems
designed to achieve high-volume production with minimal inventories through elimination of waste and
continuous process improvement
Total quality
sought to eliminate causes of production defects making quality a responsibility of everyone
Chapter 1: Intro to OM 4
