Lecturer

PhD. Le Phan Hoa

Email: [email protected]

Faculty of Business Management

Buiding A1, Room 1006, NEU
NATIONAL ECONOMICS UNIVERSITY

OPERATIONS MANAGEMENT 2
Lesson 1
INTRODUCTION
 CONTENTS

1. OPERATIONS MANAGEMENT DEFINITION

2. OM IN MANUFACTURING AND SERVICE SECTORS
3. OPERATIONS AND OTHER BUSINESS FUNCTIONS
OPERATIONS MANAGEMENT
MANAGEMENT
DEFINITION FUNCTIONS

PLANNING

MANAGEMENT IS THE PROCESS OF

CONTROLLING ORGANIZING
ACOMPLISHING ORGANISATION’ GOALS
WHILE DEALING WITH RESOUCE
CONSTRAINTS khan hiếm

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

STRATEGY
OPERATIONS
HUMAN RESOURCE
FINANCE
MARKETING

PROFIT GROWTH
MARKET SHARE

MARKET
OPERATIONS MANAGEMENT
OPERATIONS
The set of activities that creates value in the form of goods and services
by transforming inputs into outputs
TRANSFORMATION
INPUTS OUTPUTS
PROCESS

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 (RESOURCES) TRANSFORMATION OUTPUT

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
DIFFERENCES BETWEEN MANUFACTURING AND
SERVICE ORGANIZATION
GOODS vs. SERVICE

EXAMPLES? HOW TO DISTINGUISH?

GOODS VS SERVICES GOODS SERVICES

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 OF Can be independently Is highly subjective

VALUE ascertained
MANUFACTURING vs. SERVICE ORGANIZATION
OPERATIONS AND OTHER
BUSINESS FUNCTIONS
OPERATIONS MANAGEMENT and OTHER FUNCTIONS

Operations Marketing

IT

Human
Finance
Resource
 OPERATIONS MANAGEMENT and OTHER FUNCTIONS

OPERATIONS FINANCE MARKETING HUMAN RESOURCE

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

operations

finance
IT marketing

CONFLICTING or SUPPORTIVE?
Human
resource
 OPERATIONS MANAGEMENT and OTHER FUNCTIONS
Organizational
chart showing
the information
flow
 OPERATIONS MANAGEMENT and OTHER FUNCTIONS
Information flow
WHO ARE OPERATIONS
MANAGERS?
JOB POSITIONS

Midlevel
managers:
Vice president
manufacturin Quality
of operations,
g manager, specialist,
vice president
The president operations production
of
or Chief manager, analyst,
manufacturing,
operations quality inventory
V.P., or
officers control analyst, and
director of
manager, production
supply chain
plant supervisor
operations
manager, and
others
 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?
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
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
SUMMARY
1. Operations management is the business function that is responsible for
managing and coordinating the resources needed to produce a company’s
products and services.
2. The role of operations management is to transform organizational inputs into a
company’s finished goods or services.
3. Operations management is responsible for a wide range of decisions, ranging
from strategic decisions to tactical decisions.
4. Organizations can be divided into manufacturing and service operations, which
have different operational requirements.
5. Operations managers need to work closely with all other business functions in a
team format.
THANK YOU!