BOM introduction/ Operations Management
Why do companies exist?
- To make money
Operations management = how you can make money, more efficiently
- How factories and organisations work
- What are the processes in organisations and how can you improve them to make
more money
Ford made the first assembly line, so cars were cheaper, but quality wasn’t that high
Why is Toyota famous? Just in time production = Toyota production system: really getting all
the small mistakes out of the process
What will BOM teach: understand the complete way a product goes from raw material to the
end product
Operations management:
- How to improve processes
Purchasing and supply management:
- Strategy of purchasing process
Quantitative modelling of operations:
- Take problem form operations, bring to mathematics, solve it and bring back to reality
- Best solution to problem
Tips, tricks and expectations:
- Bom is different than top
- Bom is much more about calculations
- Tip: start reading
- Don’t study from only summary
- Stress is not updated for BOM
- Project grade is about the REPORT
- Don’t fall behind
- Practice formulas and you need a calculator -> normal one
- Buy the books
You have to write assignments yourself, you cannot use ChatGPT, they will check it
, Operations management
Some slides are different from canvas and the presentation. So there might be less on canvas,
but you need to know everything that is on the presentation.
Operation = process
- Input = recourses
- Output = products and customers
- Recourses are being transformed
Transforming recourses = people and machinery transforming the recourses that are being
transformed
If there comes out more than goes in, you did good.
Operations management = activity of managing the recourses which produce and deliver
products and services, it is the science of tradeoffs
Manufacturing = physical outputs, so you don’t manufacture services, but you produce it
(production)
So in UT:
Transformed recourses = students
Transforming recourses = equipment, teacher
The customer = companies
Operations and processes differ: let’s look at the 4 V’s
- Volume (high/low) (ford produced a lot of cars, due to assembly line)
- Variety (high, low) (color e.g.)
- Variation in demand (how much you sell in a period) (high/low)
- Visibility (can you see what is happening, e.g. restaurant with kitchen behind glass)
Example with a muur (frituurmuur)
You see a lot of stuff coming out, but you don’t know what is going on there
Transformed resources = kroket
Transforming resources = the oven
Customer = you, student
,How do we know if the muur is doing well?
We’ll look at the five dimensions of operations management:
1. Quality (so if you ordered fries with mayonnaise, you shouldn’t get peanut sauce)
2. Speed (you don’t want to wait long)
3. Dependability (being on time)
4. Flexibility (be able to change your operations to a new upcoming demand)
5. Cost (being productive)
Look at example with automobile plant and bus company
You can always use the five dimensions on every operation.
Why are the five dimensions of operations management so important:
- They also have internal benefits = the fact that you can change
e.g. so if customers gets something he does not want -> causes difficulties you want
do serve a next customer as the muur
- external benefits =
Productivity = output divided by input (know the formula)
- Productivity below one -> operation is not profitable
- If productivity is higher than one -> profitable
Effectiveness = doing the right things at the right time (so you want to get to Paris, next week
you’re there -> effective)
Efficiency = doing things with the least inputs as possible
Polar diagram:
- Five directions (direct to 5 dimensions of operations management)
- Use them to map performance of operations on that diagram
- You can see which firm is doing better
- It tells you that you have to make decisions
You can made a plot of these decisions (see presentation)
Tradeoff = efficient frontier view
Focus principle = focus on one ore more objectives, so you can enable superior
performances
, e.g. with de muur:
Speed, quality and low cost are most important
Imagine a döner box opens in their street -> they have a competitor
How can they stay successful: you cannot focus on every dimension, so you need a strategy
to be more competitive than your competitor = operations strategy
Operations strategy example:
- You choose Ryanair because you don’t have a lot of money
- You choose KLM because you don’t want to crash
Even though they complete do the same, they have the same strategy and are successful.
They have different operations strategies (see slide)
Difference between operations management and operations strategy
Operations strategy is in the long term (in 2 years I want this amount of profitability) and
more philosophical.
Operations management is on short term and more concrete.
The three basic functions of enterprises:
1. Product/service development (Apple)
2. Marketing (Nike)
3. Operations (Amazon)
Not every company is successful because of operations. Nike is successful because of
marketing.
Operations can be:
- Implementer of strategy
- Supporter of strategy
- Driver of strategy
Order winner = why you go there (Ryanair -> low cost) it needs to be there, otherwise we
don’t take it
If the reliability is terrible you don’t go there again, it is an order qualifier
(See the figures of these factors)
Why do companies exist?
- To make money
Operations management = how you can make money, more efficiently
- How factories and organisations work
- What are the processes in organisations and how can you improve them to make
more money
Ford made the first assembly line, so cars were cheaper, but quality wasn’t that high
Why is Toyota famous? Just in time production = Toyota production system: really getting all
the small mistakes out of the process
What will BOM teach: understand the complete way a product goes from raw material to the
end product
Operations management:
- How to improve processes
Purchasing and supply management:
- Strategy of purchasing process
Quantitative modelling of operations:
- Take problem form operations, bring to mathematics, solve it and bring back to reality
- Best solution to problem
Tips, tricks and expectations:
- Bom is different than top
- Bom is much more about calculations
- Tip: start reading
- Don’t study from only summary
- Stress is not updated for BOM
- Project grade is about the REPORT
- Don’t fall behind
- Practice formulas and you need a calculator -> normal one
- Buy the books
You have to write assignments yourself, you cannot use ChatGPT, they will check it
, Operations management
Some slides are different from canvas and the presentation. So there might be less on canvas,
but you need to know everything that is on the presentation.
Operation = process
- Input = recourses
- Output = products and customers
- Recourses are being transformed
Transforming recourses = people and machinery transforming the recourses that are being
transformed
If there comes out more than goes in, you did good.
Operations management = activity of managing the recourses which produce and deliver
products and services, it is the science of tradeoffs
Manufacturing = physical outputs, so you don’t manufacture services, but you produce it
(production)
So in UT:
Transformed recourses = students
Transforming recourses = equipment, teacher
The customer = companies
Operations and processes differ: let’s look at the 4 V’s
- Volume (high/low) (ford produced a lot of cars, due to assembly line)
- Variety (high, low) (color e.g.)
- Variation in demand (how much you sell in a period) (high/low)
- Visibility (can you see what is happening, e.g. restaurant with kitchen behind glass)
Example with a muur (frituurmuur)
You see a lot of stuff coming out, but you don’t know what is going on there
Transformed resources = kroket
Transforming resources = the oven
Customer = you, student
,How do we know if the muur is doing well?
We’ll look at the five dimensions of operations management:
1. Quality (so if you ordered fries with mayonnaise, you shouldn’t get peanut sauce)
2. Speed (you don’t want to wait long)
3. Dependability (being on time)
4. Flexibility (be able to change your operations to a new upcoming demand)
5. Cost (being productive)
Look at example with automobile plant and bus company
You can always use the five dimensions on every operation.
Why are the five dimensions of operations management so important:
- They also have internal benefits = the fact that you can change
e.g. so if customers gets something he does not want -> causes difficulties you want
do serve a next customer as the muur
- external benefits =
Productivity = output divided by input (know the formula)
- Productivity below one -> operation is not profitable
- If productivity is higher than one -> profitable
Effectiveness = doing the right things at the right time (so you want to get to Paris, next week
you’re there -> effective)
Efficiency = doing things with the least inputs as possible
Polar diagram:
- Five directions (direct to 5 dimensions of operations management)
- Use them to map performance of operations on that diagram
- You can see which firm is doing better
- It tells you that you have to make decisions
You can made a plot of these decisions (see presentation)
Tradeoff = efficient frontier view
Focus principle = focus on one ore more objectives, so you can enable superior
performances
, e.g. with de muur:
Speed, quality and low cost are most important
Imagine a döner box opens in their street -> they have a competitor
How can they stay successful: you cannot focus on every dimension, so you need a strategy
to be more competitive than your competitor = operations strategy
Operations strategy example:
- You choose Ryanair because you don’t have a lot of money
- You choose KLM because you don’t want to crash
Even though they complete do the same, they have the same strategy and are successful.
They have different operations strategies (see slide)
Difference between operations management and operations strategy
Operations strategy is in the long term (in 2 years I want this amount of profitability) and
more philosophical.
Operations management is on short term and more concrete.
The three basic functions of enterprises:
1. Product/service development (Apple)
2. Marketing (Nike)
3. Operations (Amazon)
Not every company is successful because of operations. Nike is successful because of
marketing.
Operations can be:
- Implementer of strategy
- Supporter of strategy
- Driver of strategy
Order winner = why you go there (Ryanair -> low cost) it needs to be there, otherwise we
don’t take it
If the reliability is terrible you don’t go there again, it is an order qualifier
(See the figures of these factors)
