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    Production/Operations

    Management: Introductionevaluation,major long term and short

    term decisions;objectives, importance and

    activities

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    What is Operations

    Management?OPERATIONS MANAGEMENT is the design andoperations of production/service systems

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    Without operations

    management:A normal queue at a bank would take 1to 2 hours

    A 3 hours ferry crossing could require 9hours, if not several days!

    The Eurostar would take 15 hours to gofrom London to Paris

    Mail would rarely be delivered

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    In other words:

    Unless we could totally revise ourevery days perceptions of time andperformance

    we could not live in such a world

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    Contemporary Issues

    Shift in balance of power to consumers

    Achieving higher levels of productivity

    Creating higher quality products

    Delivering better customer service

    Achieving shorter delivery times Reducing labor and material costs

    Globalization of business and markets

    E-commerce

    From a primary sector to a secondary sector economy

    From a manufacturing to a service economy

    E-service economy

    Case of developing economies: can we leap-frog the manufacturing stage?

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    International Division ofLabour

    Source: From Joseph E. Stiglitz, Principles of Micro-

    economics, 2nd ed. (New York: W.W. Norton andCompany, 1997), p. 58. [email protected]

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    The Value Chain and Its SupportFunctionsClick to edit Master text styles

    Second level

    Third level Fourth level Fifth level

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    Division of LabourThe objective is to specialise jobs by

    reducing them to their mostelementary tasks

    Results from the simultaneousapplication of two principles

    horizontal division of labour (Smith, Babbage)

    vertical division of labour

    (Taylor, introduction of management science; Gilbreth,time and motion studies)

    The vertical division of labour implies:

    A design and planning activity

    A control activity [email protected]

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    The Transformation Processwithin OMClick to edit Master text styles

    Second level Third level Fourth level Fifth level

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    Input-Transformation-OutputRelationships for Typical Systems

    Click to edit Master text styles

    Second level Third level Fourth level Fifth level

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    OM and the Service Industry

    Application of OM to ServiceOperations

    Batch cooking operations atMcDonalds

    Telephone Banking

    Call CentresServiceProduct Good

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    Most Products Are aBundle

    of Goods and ServicesClick to edit Master text styles

    Second level Third level Fourth level Fifth level

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    Differences Between Goods andServicesGoods Services

    Tangible Intangible

    Can be inventoriedCannot be inventoried

    No interaction

    between customer andprocess

    Direct interaction between

    customer and process

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    Product Delivery Systems

    Manufacturing Processes - customerare separate from the place ofproduction both geographically and interms of time Exceptions: B2B transactions

    Manufacturing

    process

    Materials Goods Customer

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    Service Delivery Systems

    There are two basicstructures of service

    delivery system..... 1. where customers participate 2. where customers' goods are

    processeddeliveryService

    system

    Service

    deliverysystem

    CustomerCustomer

    Goods

    ProcessedGoods

    Customer

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    Front & Back Office

    Key feature of service industry. Nowadays front andback offices are often separated geographically -and may even be in different continents

    Back Office

    Customers

    Front Office - Servers(receptionist / dispatcher /

    cashier etc.)

    Division of labour

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