Introduction to Operations and Logistics Management

OPERATIONS and LOGISTICS
MANAGEMENT
Introduction &
Importance
Scope & Trends
Careers & Course
Overview
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Philip A. Vaccaro , PhD
Operations Management
The competent and adept management
of complex systems in the service, nonprofit, manufacturing, and government
sectors via the effective and efficient
utilization of time, labor, money, and
materials in the generation of goods
and/or services.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-2
Overview
Operations Management plans for, and creates the
competitive advantages that all businesses need
for fueling profitable growth. As a result, OM is
the most critical of the business functions.
Studying OM means studying modern planning,
decision-making and management methods in all
functional areas of an organization, including
strategic and tactical planning, products and services
development, product and project management,
process and supply chain management, and more.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-3
Why Study OM?
I. Operations Management is one of the three
major functions of any organization……and
they are integrally related.
MARKETING
All firms
market (sell) ,
finance (account),
and produce (operate)
THE
STRATEGIC
TRIAD
OPERATIONS
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
FINANCE
Chapter 1-4
Why Study OM?
II. Operations Management shows
us how goods and services are
generated. Consequently, it is
the………
foundation of all business !
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-5
Why Study OM?
III. Operations Management shows us what
OM managers do. This enables us to learn
the skills, techniques, and models needed
to practice 21st century management, and
to also explore the lucrative career opportunities in OM.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-6
Why Study OM?
IV. Operations Management represents as
much as 70% of the operating budget
of most firms due to:
 Manufacturing activity
 Maintenance
 Warehousing
 Distribution
 Inventory Control
 Research and Development
 Facilities and Equipment
 Worker training
 Cost and Quality Control
 Planning and Scheduling
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-7
Why Study OM?
V. Operations Management, by virtue of its
huge collective budget, provides a major
opportunity for the firm to improve its
profitability.
In fact, OM has become the last resort
for most firms that have exhausted the
potential of marketing, finance, and
general management.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-8
Why Study OM?
VI. About 40% of all jobs in the United States
are in Operations Management.
Exposure to the following disciplines will
enhance one’s job prospects:
 Operations research
 Statistics
 Information systems
 Economics
 Logistics / Transportation
 Mathematics
 Accounting / Finance
 Computer science
 Engineering
 Manufacturing
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-9
What OM Managers Do
 Supervise skilled trade
workers & technicians.
 Manage the production
and technical operations.
 Integrate new technology
into manufacturing and
service processes.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-10
What OM Managers Do
 Develop, monitor, and
update measures of
efficiency.
 Develop, monitor, and
change operating plans
and schedules.
 Control costs and quality.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-11
What OM Managers Do
 Evaluate and improve the
existing operating system
in terms of productivity and
customer responsiveness.
 Translate improved operating
systems into competitive advantage in the marketplace.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-12
OM Necessary Skills
 Keen understanding of people and processes.
 Ability to solve problems in multi-disciplinary
teams.
 Strong leadership/coordinating ability.
 Strong analytical and problem-solving skills.
 Strong interpersonal communication skills.
 Strong background in mathematics.
 Strong background in computer programming.
 Proficiency in one or more foreign languages.
 Graduate degree in the field or a related field.
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-13
Exciting New Trends in OM
Low cost, reliable
global communication
networks
Cost of capital
putting pressure
on reducing
inventories
Global Focus
and
Just-in-Time
Low cost, reliable
global transportation
networks
Shipments
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-14
Exciting New Trends in OM
Quality emphasis requires
supplier engagement in
product improvement
Shorter production
cycles and
computer-aided
design
Supply Chain
Partners
Rapid Product
International
collaboration and rapid
communication
Development
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-15
Exciting New Trends in OM
Affluence and world-wide
markets
Increasingly
flexible production
processes
Mass
Customization
Empowered
Employees
Increasingly knowledge
and information-based
society
Lean
Production
Applied Management Science for Decision Making, 2e © 2014 Pearson Learning Solutions
Chapter 1-16
Career Possibilities
 Business Executive
 Blue-Collar Supervisor
 Construction Manager
 Production Manager
 Operations Manager
 Information System
Manager
 Materials Manager
 Project Manager
 Customer Service Mgr
 Defense Analyst
 Purchasing Agent
 Inventory Analyst
 Cost Estimator
 Systems Analyst
 Industrial Engineer
 Quality Control Mgr
 Time & Motion Analyst
 Operations Scheduler
 Operations Planner
 Process Improvement
Manager
Career Possibilities
In corporations, OM managers are responsible for
developing new products and services, the
strategic and tactical plans, and the execution of
those plans
Demand for OM managers is particularly high in
financial services, IT, manufacturing, non-profit,
government, education, and health care
Entrepreneurs will find OM knowledge pivotal
• Advancement opportunities are superior in almost all
industries, and commonly lead to senior leadership
positions