Operations management
Operations Management: The management of the productive processes that convert inputs into goods and services.
The concept applies to both manufacturing and service industries.
Major aspects of OM:
Operations strategy, operating systems, facilities (expansion and contracting decisions, facilities location, and layout), and process technology.
Productivity: An efficiency concept that combines the ratio of outputs relative to inputs into a productive process. = gods &services produced (outputs) / labor+capital+energy+technology+materials (inputs)
To improve, 5 major steps: determine a base, establish desired productivity level, review methods of increasing productivity, select a method and implement, and measure results and modify as necessary.
Operations Strategy
I
nputs
(raw materials, human resources, capital, information, technology)
T ransformation Process (Operations Management: strategy, operating systems, Facilities, process technology)
Outputs (Goods and Services)
Major systems used in operations management:
M anagement – Capacity Planning (Current Capacity) – altogether Aggregate Production
Planning
Master Production Schedule – Materials requirements planning (Capacity requirements planning) – Purchasing – altogether Production
MRP: computer based inventory system that develops materials requirements for the goods and services specified in the master schedule and initiate the procurement actions necessary to acquire the materials when needed.
Information systems in management
The nature of information systems
Data vs. Information
Data: Unanalyzed facts and figures
Information: Data that have been analyzed or processed into a form that is meaningful for decision makers.
Electronic data processing: transformation of data into meaningful information through electronic means.
Information system: a set of procedures designed to collect (or retrieve), process, store, and disseminate information to support planning, decision making, coordination, and control.
Characteristics of useful information:
Relevant- directly related to the decision in hand
Accurate – correct
Timely: available when needed
Complete: comes from appropriate sources and covers all the areas that are required by the decision maker.
Concise – provide the level of summarization that is appropriate to the particular decision.
Information needs according to management levels
Major types of IS:
Transaction processing;
Office Automation Systems (OAS):
A computer-based information system aimed at facilitating communication and increasing the productivity of managers and office workers through document and message processing.
Management Information Systems (MIS):
A computer-based information system that produces routine reports and often allows online access to current and historical information needed by managers mainly at the middle and first-line managers.
Decision Support Systems (DSS):
A computer-based information system that supports the process of managerial decision making in situations that are not well structured. Attempt to improve the decision-making process by providing tools that help managers and professionals analyze situations more clearly.
Executive support system (ESS)
Support decision making and effective functioning at the top levels of an organization.
Impacts of information technology on organizations
Individual jobs; Nature of jobs; Stress and health consequences; Location of work; errors; theft; security breaches (hackers, viruses); resistance and underutilization.