OPRE 3310: OPERATIONS MANAGEMENT
Operations Management (OM) - Answers :how best to provide the goods and services
the customer or client wants
- Design, implementing key process, managing necessary input and resources
Tradition vs Modern OM - Answers :Traditional: Production planning, scheduling,
inventory management, warehouse,...
Modern: Study of business process, concerns both *manufacturing and service*
industries
Trend: Changed from purely tactical to more strategic
Matching Supply and Demand - Answers :Capacity utilization is crucial for profitability.
However, supply and demand matching is tough:
1) "Invisible Hand" > Automatic Matching
2) To managers: Excess Supply = wasted resources. Excess Demand = lost revenue
Ex: Walmart empty shelf > Walmart failed to predict demand
OM affect on business function - Answers :1) Marketing: Disney overload because of
ads
2) Accounting: What to buy, strategy to use
Process View of Organizations - Answers :Input: Raw mat, customers >>>
Transformation Process/ Resources: labor and capital >>>
Output: Good and Service
Note: Process depends on the perspective you take
Operation Management - Answers :the management (design, operation, and
improvement) of the transformation processes that create value for society
Strategic Role of OM - Answers :OM can be Competitive Weapon or Corporate
Millstone.
Ex of Competitive Weapon: South West
- Corporate Strategy: Serve price-sensitive and convenience-sensitive travelers
- Low Price, Quality Service
- Operational Strategy: Tailored for strategic fit (point-to-point routing, no first-class
service, boarding class seat assignment, no agent ticketing,...)
Ex of Corporate Millstone:
, Order Winner - Answers :a criterion customers use to differentiate the services or
products of one firm from those of another
Types:
1) Price,
2) Quality,
3) Time,
4) Flexibility.
All Require *Operational Capabilities align with Business Strategy*
Strategic Framework for Operation - Answers :Business Strategy > Desired Capabilities
> [Process > Operation Structure < Resource] > Price, Quality, Time, Flexibility
Check if Business Strategy compatible with P,Q,T,F
Strategic Tradeoff and Efficient Frontier - Answers :The farer away from origin, the more
successful
Process Analysis - Answers :Step 1: Draw a process flow diagram
- Determine process boundary, flow unit, activities, sequece, resource, buffer
Step 2: Bottleneck Analysis
- Determine the capacity of each activity and of the process
Flow Diagram - Answers :Take point of view of flow unit (what transformed from input
into output)
- Activities/ tasks which add value to the flow unit (Rectangle)
- Buffer/ WIP inventory which do not add value and are not necessary (typically waiting,
usually between two activities rectangles) (Triangle)
- Connect processes with arrow
Resource in Parallel - Answers :Parallel Resources: When some resources are
performing the same activity and flow units go through only one of them indifferently
- NOT different resource performing *different* activities on the same flow unit at the
same time
Capacity (bottleneck) analysis - Answers :Analyzing how well the process can perform
in the best scenario possible
Steps:
1) Identify Relevant and Irrelevant Resources
- Irrelevant: when used in the process, it is used at the same time as another specific
resource, virtually infinite quanity.
Ex: Restaurant Relevant: BoB, Charlotte. Irrelevant: Spoon, Tortilla press
2) Activity Time
Operations Management (OM) - Answers :how best to provide the goods and services
the customer or client wants
- Design, implementing key process, managing necessary input and resources
Tradition vs Modern OM - Answers :Traditional: Production planning, scheduling,
inventory management, warehouse,...
Modern: Study of business process, concerns both *manufacturing and service*
industries
Trend: Changed from purely tactical to more strategic
Matching Supply and Demand - Answers :Capacity utilization is crucial for profitability.
However, supply and demand matching is tough:
1) "Invisible Hand" > Automatic Matching
2) To managers: Excess Supply = wasted resources. Excess Demand = lost revenue
Ex: Walmart empty shelf > Walmart failed to predict demand
OM affect on business function - Answers :1) Marketing: Disney overload because of
ads
2) Accounting: What to buy, strategy to use
Process View of Organizations - Answers :Input: Raw mat, customers >>>
Transformation Process/ Resources: labor and capital >>>
Output: Good and Service
Note: Process depends on the perspective you take
Operation Management - Answers :the management (design, operation, and
improvement) of the transformation processes that create value for society
Strategic Role of OM - Answers :OM can be Competitive Weapon or Corporate
Millstone.
Ex of Competitive Weapon: South West
- Corporate Strategy: Serve price-sensitive and convenience-sensitive travelers
- Low Price, Quality Service
- Operational Strategy: Tailored for strategic fit (point-to-point routing, no first-class
service, boarding class seat assignment, no agent ticketing,...)
Ex of Corporate Millstone:
, Order Winner - Answers :a criterion customers use to differentiate the services or
products of one firm from those of another
Types:
1) Price,
2) Quality,
3) Time,
4) Flexibility.
All Require *Operational Capabilities align with Business Strategy*
Strategic Framework for Operation - Answers :Business Strategy > Desired Capabilities
> [Process > Operation Structure < Resource] > Price, Quality, Time, Flexibility
Check if Business Strategy compatible with P,Q,T,F
Strategic Tradeoff and Efficient Frontier - Answers :The farer away from origin, the more
successful
Process Analysis - Answers :Step 1: Draw a process flow diagram
- Determine process boundary, flow unit, activities, sequece, resource, buffer
Step 2: Bottleneck Analysis
- Determine the capacity of each activity and of the process
Flow Diagram - Answers :Take point of view of flow unit (what transformed from input
into output)
- Activities/ tasks which add value to the flow unit (Rectangle)
- Buffer/ WIP inventory which do not add value and are not necessary (typically waiting,
usually between two activities rectangles) (Triangle)
- Connect processes with arrow
Resource in Parallel - Answers :Parallel Resources: When some resources are
performing the same activity and flow units go through only one of them indifferently
- NOT different resource performing *different* activities on the same flow unit at the
same time
Capacity (bottleneck) analysis - Answers :Analyzing how well the process can perform
in the best scenario possible
Steps:
1) Identify Relevant and Irrelevant Resources
- Irrelevant: when used in the process, it is used at the same time as another specific
resource, virtually infinite quanity.
Ex: Restaurant Relevant: BoB, Charlotte. Irrelevant: Spoon, Tortilla press
2) Activity Time
