Learning Objectives
- Define operations management and discuss the role of the operations manager in a manufacturing company.
- Describe the decisions and activities of the operations manager in overseeing the production process in a manufacturing company.
- Explain how to create and use both PERT and Gantt charts.
- Explain how manufacturing companies use technology to produce and deliver goods in an efficient, cost-effective manner.
- Describe the decisions made in planning the product delivery process in a service company.
- List the characteristics that distinguish service operations from manufacturing operations and identify the activities undertaken to manage operations in a service organization.
- Explain how manufacturing and service companies alike use total quality management and outsourcing to provide value to customers.
The Challenge: Producing Quality Jetboards
The product development process can be complex and lengthy. It took 16 years for Bob Montgomery and others at his company to develop the PowerSki Jetboard, and this involved thousands of design changes. It was worth it, though: the Jetboard was an exciting, engine-propelled personal watercraft—a cross between a high-performance surfboard and a competition water-ski/wakeboard that received extensive media attention and rave reviews. It was showered with honors, including Time magazine’s “Best Invention of the Year” award.[1] Stories about the Jetboard appeared in more than 50 magazines around the world, and it was featured in several movies, over 25 TV shows, and on YouTube.[2]
Montgomery and his team at PowerSki enjoyed taking their well-deserved bows for the job they did designing the product, but having a product was only the beginning for the company. The next step was developing a system that would produce high-quality Jetboards at reasonable prices. Before putting this system in place, PowerSki managers had to address several questions.
- What kind of production process should they use to make the Jetboards?
- How large should their production facilities be, and where should they be located?
- Where should they buy needed materials?
- What systems will be needed to control the production process and ensure a quality product?
Answering these and other questions helped PowerSki set up a manufacturing system through which it could accomplish the most important task that it had set for itself: efficiently producing quality Jetboards.
Operations Management in Manufacturing
Like PowerSki, every organization—whether it produces goods or provides services—sees Job 1 as furnishing customers with quality products. Thus, to compete with other organizations, a company must convert resources (materials, labor, money, information) into goods or services as efficiently as possible. The upper-level manager who directs this transformation process is called an operations manager. The job of operations management (OM) consists of all the activities involved in transforming a product idea in