OUTLINE
     • What is Operations Management?
     • Managing Operations (design, operating, 
       improvement)
     • Process, Elements of Process
     • Process Analysis
     • Performance Measures to Analyze Processes
     • Key Issues in Operations Management
                       Roy D. Shapiro, Core Reading: Process 
                      Analysis, HBP No. 8007 (Boston: Harvard 
                        Business School Publishing, 2013).
          What Is Operations Management?
               • Management of all OPERATIONS 
                    which transform inputs such as 
                    raw material and labor into 
                    outputs in the form of finished 
                    goods and services.
                                               Fundamentals of Operations Management                       © The McGraw-Hill 
                                                                 4e                                  Companies, Inc., 20031–3
                                Examples of Production Systems
          (Systems consist of a set of interacting components  operating together to achieve a 
                                        common goal)
            System        Inputs             Conversion     Output
                                                            (desired)
            Hospital      Patients           Health Care    Healthy
                          MDs, Nurses                       Individuals
                          Medical Supplies
                          Equipment
            Restaurant    Hungry Customers Prepare Food Satisfied
                          Food, Chef         Serve Food     Customers
                          Servers
                          Atmosphere
            Automobile    Sheet Steel        Fabrication    High Quality
            Plant         Engine Parts       and Assembly Automobiles
                          Tools, Equipment   of Cars
                          Workers
            University    High School Grads Transferring    Educated
                          Teachers, Books    of Knowledge Individuals
                          Classroom          and Skills
                                                                                  6
              The Economic System
           Inputs          Transformation (Process)         Outputs
            Labor,           Examples of Transformation      Goods 
           capital,                   are:                    and
         management                  Storage                 services
                                      Transportation
                                    Machining
                                  Feedback loop
                                                              Figure 1.6
                Elements of a Process
     Inputs: labor, material, energy and capital, 
     Outputs: Goods or services (cost, quality, timeliness)
     Transformation: The essence of operations function is 
        to  add  value  during  the  transformation  process. 
        Value is the difference between the cost of intputs 
        and the value or price of outputs. 
     Typical value-added operations are: manufacturing, 
         transportation, retailing.
               Many studies have shown that we only add value to 
        a product for less than 5% of the time, the rest of the 
        time is wasted
                           Roy D. Shapiro, Core Reading: Process 
                          Analysis, HBP No. 8007 (Boston: Harvard 
                           Business School Publishing, 2013).