NATIONAL ECONOMICS UNIVERSITY

OPERATIONS
INTRODUCTIO
MANAGEMENT
N

MSc. Bui Cam Van

 CONTENT

1. DEFINITION
2. RELATIONS WITH OTHER FUNCTIONS
3. GOODS AND SERVICES
4. OM DECISIONS
5. HISTORY OF OM
6. OM MANAGERS
DEFINITION
PRODUCTION vs OPERATIONS
MANAGEMENT
PAST RECENTLY

• Creation of • How to
goods and improve the
services.  creation 
PRODUCTION OPERATIONS
MANAGEMENT
OPERATIONS
MANAGEMENT
OPERATIONS

The set of activities that creates value in

the form of goods and services by
transforming inputs into outputs
OPERATIONS
MANAGEMENT
OPERATIONS

COOKING PROCESS
INPUTS OUTPUTS

COOK FRIED - EGG

MONEY
EGG, SALT,
ONION..
PAN,
CHOPSTICK..
INFORMATION FEEDBACK LOOP
……
OPERATIONS
MANAGEMENT
TRANSFORMATION
PROCESS
The set of activities that creates value in the form of goods and services
by transforming inputs into outputs
TRANSFORMATION
INPUTS OUTPUTS
PROCESS

LABOR GOODS
CAPITAL SERVICES
MATERIAL
TECHNOLOGY
INFORMATION
……
FEEDBACK LOOP
OPERATIONS
MANAGEMENT
QUESTION: specify the transformation process of the following organizations: fast food,
university, restaurants

OPERATIONS INPUT TRANSFORMATI OUTPUT

(RESOURCES) ON

Fast foods • Meat, bread Cooking Burgers

• Staffs

Universities • Students Teaching Graduates

• Exam
• Buildings
Restaurant • Hungry customers Cooking Well-prepared food
• Food Service Satisfied customers
• Chef/staffs Cosy environment
RELATIONS WITH OTHER
FUNCTIONS
MANAGEME
NT DEFINITION
FUNCTIONS
PLANNING

MANAGEMENT IS THE PROCESS OF

CONTROLLI ORGANIZIN
ACOMPLISHING ORGANISATION’ NG G
GOALS
WHILE DEALING WITH RESOUCE
CONSTRAINTS

LEADING STAFFING
BUSINESS
MANAGEMENT
BUSINESS MANAGEMENT

• MARKETING • PLANNING
• FINANCE • ORGANIZING
• OPERATIONS • STAFFING
• HUMAN RESOURCES • LEADING
• CONTROLLING

SUPPORT or
CONFLICT??
 OPERATIONS MANAGEMENT and OTHER
FUNCTIONS HUMAN
OPERATIONS FINANCE MARKETING
RESOURCE
• Transform inputs • Record and • Analyze why • Manage
into outputs summaries financial people buy to relationship
• Applies to the transactions into price, promote, between employers
manufacturing and report distribute and and employees
service sector • Use income produce products • Include: acquiring,
• Can be global or statement and that increase sale development,
domestic balance sheet to • Aim to meet maintaining, and
evaluate business customer wants separation
performance and needs
OPERATIONS MANAGEMENT and OTHER
FUNCTIONS
operations
Operations Marketing

IT

Finance
Human
Resource
finance
IT marketing

Human
resource
 OPERATIONS MANAGEMENT and OTHER
FUNCTIONS
Organizational
chart showing
the information
flow
 OPERATIONS MANAGEMENT and OTHER
FUNCTIONS
Information flow
BUSINESS
MANAGEMENT

OPERATIONS STRATEGY
HUMAN RESOURCE
FINANCE
MARKETING

PROFIT GROWTH
MARKET SHARE

MARKET
STRATE
GY
BUSINESS STRATEGY
Defines the long-range plans for the company

OPERATIONS STRATEGY
Develops a plan for the operations function focusing on specific competitive
priorities to meet long-range plan

DESIGN OF OPERATIONS FUNCTION

Developed to focus on the identified competitive properties
 CONVERT BUSINESS STRATEGY INTO OPERATIONS ACTIVITIES

Differentiation
Innovative design
Providing a broad product line
Offering excellent after-sale service
Adding sensory experience
Cost leadership
Low overhead
Effective capacity use
Efficient inventory management
Respond
Offering a flexible product line
Reliable scheduling
Speedy delivery
 DIFFERENCES BETWEEN
MANUFACTURING AND SERVICE
ORGANIZATION
 SERVICE
GOODS VS SERVICES GOODS
S

TANGIBILITY AND Tangible Intangible

PERISSHABILITY Perishable Non-perishable

CUSTOMIZATION Standardized Heterogenous

OWNERSHIP Can be owned and transfer Cannot be owned

TIME BETWEEN
PRODUCTION AND Considerable Simultaneous
CONSUMPTION

DETERMINATION Can be independently Is highly subjective

OF VALUE ascertained
MANUFACTURING vs SERVICE
ORGANIZATION
 OPERATIONS
MANAGEMENT
DECISIONS
10 OM DECISIONS
STRATEGIC
1. Design of goods and services
2. Managing quality
3. Process and capacity design
4. Location strategy
5. Layout strategy
6. Human resources and job design
7. Supply chain management
8. Inventory management
9. Scheduling
10. Maintenance TATICAL
STRATEGIC DECISIONS VS TATICAL DECISIONS
THE CRITICAL DECISIONS

Design of goods and services

 What good or service should we offer?
 How should we design these products and services?
Managing quality
 How do we define quality?
 Who is responsible for quality?
THE CRITICAL DECISIONS

Process and capacity design

What process and what capacity will these
products require?
What equipment and technology is necessary for
these processes?
Location strategy
Where should we put the facility?
On what criteria should we base the location
decision?
THE CRITICAL DECISIONS

Layout strategy
How should we arrange the facility?
How large must the facility be to meet our plan?
Human resources and job design
How do we provide a reasonable work
environment?
How much can we expect our employees to
produce?
THE CRITICAL DECISIONS

Supply chain management

 Should we make or buy this component?
 Who are our suppliers and who can integrate into our
e-commerce program?
Inventory, material requirements planning, and JIT
 How much inventory of each item should we have?
 When do we re-order?
THE CRITICAL DECISIONS

Intermediate and short–term scheduling

 Are we better off keeping people on the payroll during
slowdowns?
 Which jobs do we perform next?
Maintenance
 Who is responsible for maintenance?
 When do we do maintenance?
GROUP WORK
In this section we look at some of the specific decisions that operations
managers have to make.
 Think about decisions we would need to make if we started our own
company—say, a company called Gourmet Wafers that produces
praline–pecan cookies from an old family recipe. Think about the
decisions that would have to be made to go from the initial idea to
actual production of the product: that is operations management
Open a bakery making cookies from an old
family recipe
Questions you have to ask Your decisions
yourself to go from the initial
idea to actual production of
the product
Eg: What are our competitive
values?
 HISTORY OF
OPERATIONS
MANAGEMENT
HERITAGE OF OPERATIONS
MANAGEMENT
NEW CHALLENGES IN OPERATIONS
MANAGEMENT
From To
 Local or national focus  Global focus
 Batch shipments  Just-in-time
 Low bid purchasing  Supply chain partnering
 Lengthy product development  Rapid product
 Standard products development, alliances
 Job specialization  Mass customization
 Empowered employees,
teams
NEW TRENDS IN OPERATIONS
MANAGEMENT
 Global focus
 Just-in-time performance
 Supply chain partnering
 Rapid product development
 Mass customization
 Empowered employees
 Environmentally sensitive production
 Ethics
ETHICS AND SOCIAL
RESPONSIBILITY
Challenges facing
operations managers:
 Developing and producing safe,
quality products
 Maintaining a clean environment
 Providing a safe workplace
 Honoring community commitments
WHO ARE OPERATIONS
MANAGERS?
GROUP WORK
Research about:
- Skills required for operations jobs
- Job titles and responsibilities
JOB POSITIONS

Midlevel
Vice managers:
president of manufacturin Quality
operations, g manager, specialist,
The president vice president operations production
or Chief of manager, analyst,
operations manufacturin quality inventory
officers g, V.P., or control analyst, and
director of manager, production
supply chain plant supervisor
operations manager, and
others
THANK YOU!