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0:01
Welcome to the introduction to operations management. I am your professor, Dr. Eddy Witzel. I have over 32 years of experience in operations management roles, including engineering, process improvement, project manager, first line supervisor, middle management, and senior leader. I have taught operations management at the graduate level for over 10 years. at two different universities. This gives me a perspective that is both academic and practical.
0:36
Today we begin with the introduction to operations management. This lecture will define operations management, explain goods and services, explore supply chains, discuss the transformational process, review the historical evolution of operations management, and explore some environmental and ethical issues. From a leadership perspective, this matters because every strategic decision eventually becomes an operational one. Vision, goals, and strategy
1:13
only have value if they can be executed reliably. Leaders who do not understand operations are often surprised when good ideas fail in practice. This course is not about turning you into engineers. It's about helping you lead systems that consistently deliver results. What is operations? It's the part of the organization responsible for producing goods or delivering services. It's what you do as a business. If you're a restaurant, it's everything from cooking food to scheduling
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servers. It's ordering the right amount of inventory so you don't run out, but also minimize spoilage. If you're building computers, it's everything from ordering the correct components to storing your inventory. It's managing your workforce and maximizing efficiency. Leadership is not just setting goals, but designing systems that make those goals achievable. Every aspect of business relates to operations. Many service jobs are related to operations, financial, marketing,
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accounting, IT. Many organizations fail not because of bad strategy, but because strategy is never executed well. Many operational problems are actually leadership problems in disguise. Studying operations help leaders understand why firms succeed, why they fail, and why good intentions are not enough. Organizations typically include three major functions. Marketing, finance, and operations. Marketing, finance, and operations are deeply interconnected. Most
3:05
breakdowns occur between functions, not within them. Leadership often involves alignment and coordination rather than authority. Effective leaders integrate across these functions rather than optimizing any single one. Let's discuss the difference between goods and services. Goods are physical items, things like automobiles, computers, ovens, or even shampoo. Services are activities that provide value through time, location, form or psychological experience.
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Things like air travel, education, haircuts, legal counsel. Quality and services is created in real time under uncertainty and often directly in front of the customer. This means leaders cannot rely solely on inspection or rework. They must design processes that support judgment, consistency, and responsiveness. From a leadership perspective, services present a greater challenge. Most products are neither purely goods or purely services. Organizations
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exist along a goods service continuum. combining tangible outputs with intangible experiences. Auto assembly and steel making are examples that are mostly goods. Home remodeling, retail sales are are goods with a little bit more service. Computer repair or a restaurant meal is really a mix of goods and services. You're getting food, but you're also getting an experience. songwriting or software development is mostly services. And finally, things like surgery,
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teaching, they're almost all services. Leadership decisions determine where standardization ends and discretion begins. Too much control can reduce innovation and flexibility. Too little control can undermine quality and reliability. Balancing this tradeoff is a leadership responsibility. The supply chain is a sequence of activities and organizations involved in producing and delivering a good or service from a supplier supplier to the final customer. Leadership becomes
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especially important here because leaders are accountable for performance across relationships they don't directly control. Effective supply chain leadership depends on trust, coordination, information sharing, and long-term thinking. Many supply chain failures are not technical failures, but leadership failures in alignment and communication. Trust, transparency, and coordination matter as much as contracts and logistics. It is critical to manage the entire
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supply chain. There is increased in dependence on global supply chains. This makes the management of supply chains more difficult with time zone differences and language barriers. Transportation has many trade-offs between speed and cost. Air freight is fast but expensive. Ships and rail can save shipping cost but increase delivery times. Production flow can be interrupted by many factors. Inventory can provide a cushion to absorb transportation or production issues, but high
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inventories increase cost and may actually hide problems that need to be addressed. Quality must be managed across the supply chain. The earlier you can identify quality problems, the lower the cost to correct the problem. A small quality problem in a supplier's supplier could have a major impact on the customer. There is a constant need to manage risk and minimize disruption. Supply chain disruptions often expose leadership weaknesses before they expose technical ones.
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Leadership failures often appear first as supply chain disruptions. The scope of operations management is very broad. Operations management includes forecasting, capacity planning, facility layout, scheduling, inventory management, quality assurance, and more. Leadership responsibility expands as operational decisions ripple across the organization. Leaders must understand how these decisions affect employees, customers, partners, and long-term performance.
8:24
The operations manager guides the system through decisionmaking. Leadership exists at multiple levels. Strategic leaders design systems and constraints while operational leaders manage within them. Both roles are essential for sustained performance. Operations managers make both system design decisions and system operation decisions. Operations leaders shape both long-term design and daytoday execution. System design decisions include capacity, facility layout,
9:07
location, and equipment selection. These decisions are strategic and involve long-term commitments. Leadership decisions at this level shape what future managers can and cannot do. Poor design limits good execution regardless of effort. Operations decisions involve choosing among alternatives with very different outcomes. Leadership is the responsibility for making these choices even when the information is incomplete and consequences are unequal. Avoiding decisions
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is itself a decision often with significant costs. System operation decisions include personnel management, scheduling, inventory control, project management, and quality assurance. Operations managers spend more time on system operation decisions, but they still have a vital stake in system design. Operational leadership involves making sound decisions under real world constraints. Leaders must balance efficiency, quality, and responsiveness daily. Operations
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decisions involve determining what, when, where, how, and who. What resources are needed and how much? When are resources needed? When is work scheduled? When materials and supplies are ordered, where will the work be done? How will the product or service be designed? How will it be done? How are the resources allocated? Who will do the work? Leadership is responsible for choosing among alternatives with unequal consequences. Models are simplification of reality designed
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to support decision-making. Leaders use models to inform judgment, not replace it. Understanding assumptions and lead limitations is a leadership skill. Good leadership requires understanding both what models re reveal and what they leave out. Models simplify complexity, support analysis, and enable whatif decisions. Leadership improves when decisions are disciplined, transparent, and repeatable. However, leaders remain accountable for outcomes, not models. In most situations,
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a few factors drive most outcomes. Leadership effectiveness comes from focusing attention on the critical few, not the trivial many. Knowing where to focus is a leadership skill, not a technical one. Models are generally easy to use and less expensive than dealing with the real system. They require users to organize and sometimes quantify information. There's an increased understanding of the problem with a model. It enables whatif questions and it serves as a
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consistent tool for evaluation and provides a level of standardization for an analyzing a problem. It enables users to bring the power of mathematics to bear on a problem. Leadership improves when decisions are disciplined, transparent, and repeatable. So the systems approach, a system is a set of interrelated parts that must work together. The business organization is a system composed of subsystems. You can think of it as the marketing subsystems,
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the operation subsystem, the finance subsystems. The systems approach emphasizes interreationships between subsystems. The main theme is the whole is greater than the sum of the parts. The output and objectives of the organization take precedence over those of any one subsystem. Leaders think in systems because optimizing one part can harm the whole. A few factors often account for most outcomes. Leadership effectiveness comes from focusing attention
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on the critical few rather than the trivial many. The industrial revolution marked the first major transformation in operations management. Production shifted from skilled artisans working independently to centralized factories using machines and standardized processes. Division of labor dramatically increased output by breaking work into simple repeatable task. Steam steam power allowed organizations to scale production far beyond what was previously possible. From a
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leadership standpoint, the f focus during this era was control, coordinating people, machines, and materials to maximize productivity. While efficiency improved, worker well-being was often overlooked. This tension between output and human costs set the stage for layer movements in operations management. The key lesson here is that leadership priorities shape operational leadership priorities shape operational outcomes for better or worse.
15:29
The key lesson here is that leadership priorities shape operational outcomes for better or worse. Scientific management built on the industrial revolution by implying measurement and analysis to how work was performed. Taylor believed that there was one best way to do every job and that management's role was to discover it through observation, timing, and experimentation. Work became standardized. Planning was separated from
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execution and incentives were used to increase productivity. From an operations perspective, this approach dramatically improved efficiency and consistency. But from a leadership perspective, it treated workers as components of the system rather than contributors to it. That limitation led to a new way of thinking about operations, one that recognized the importance of human motivation. The human relations movement emerged as a response to the limitations of scientific management.
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Researchers began to recognize that productivity is influenced not only by systems and incentives, but by human motivation, relationships, and job satisfaction. Studies like the Hawthorne experiment showed that attention, leadership style, and social factors affect performance. This movement shifted operations management away from pure control and toward engagement. Workers were no longer seen as interchangeable parts, but as contributors whose behavior shapes outcomes.
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For leaders, this marched an important realization. Efficient systems matter, but people ultimately determine how well those systems perform. Modern operations management builds on this insight by integrating systems thinking with human centered leadership.
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Decision models and management science represent a shift toward analytical data decision datadriven decisionmaking in operations management. During this period, mathematics and statistics were increasingly applied to complex operations, complex operational problems such as inventory control, scheduling, quality, and resource allocation. World War II accelerated this movement as operations research teams used models to solve largecale logistics and
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planning challenges under severe constraints. One of the most influential contributions was linear programming which gave managers a systematic way to allocate limited resources among competing uses. From a leadership perspective, this era showed that better decisions come from disciplined analysis, not just experience or instinct. Models don't replace leadership judgment, but they raise the quality, consistency, and defensibility of operational decisions. Operations can be viewed
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as a transformation or conversion process. Inputs such as materials, labor, capital, information are transformed into outputs, which are goods and services. Leaders act as system architects in the process. They determine how workflows, where resources are allocated, and which constraints shape behavior. Well-designed systems make success repeatable. Poorly designed systems make success dependent on extraordinary effort. Measurement and feedback provide information about system
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performance. Control involves comparing feedback against standards to determine whether corrective action is needed. Leadership is reveal is revealed in what gets measured. What leaders choose to measure s signals what truly matters. Metrics shape behavior sometimes in unintended ways. So leaders must think carefully about what performance indicators to encourage. A process is one or more actions that transforms inputs into outputs. Organizations rely on upper
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management processes, operational processes, and supporting processes. Leaders focus on processes because consistent results come from systems, not individual heroics. If success depends on extraordinary effort every time, leadership has failed to design a reliable process. Variation can cause delays, shortages, poor quality, and inefficiency. Sources of variation include product variety, structural demand variation, random variation, and assignable variation. When you
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have a wide variety of goods and services, there is more variation in the process. Structural variation in demand is generally predictable. For example, retail stores know that they will sell significant inventory leading up to Christmas. This is structural variation that can be predicted. Random variation is natural and cannot be influenced by managers. Assignable var variation has an identifiable source. It may be a major snowstorm, a hurricane, a pandemic, a labor
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strike, new tariffs, or something else that can be explained, reduced, eliminated, or corrected. Leaders reduce chaos not by blaming people, but by stabilizing processes. Understanding variation allows leaders to distinguish between noise and real problems that require action.
22:42
When supply exceeds demand, organizations experience waste. When demand exceeds supply, they experience lost opportunity and customers dissatisfaction. Leadership involves making tradeoffs between cost, availability, and service level. There is rarely a perfect solution, only informed decisions with consequences. There are many career opportunities related to operations management. Careers include operations manager, supply chain manager,
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production analyst, scheduler, production manager, engineering, purchasing, inventory, and quality manager. Leadership in these roles is not merely technical. It requires influence, coordination, and decision makingaking under pressure. Operations leaders shape outcomes far beyond their formal job titles. Professional societies such as Apex, ASQ, ISM and inform support ongoing learning oper learning in operations and supply chain management. This highlights a leadership
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truth. Operational excellence is never static. Strong leaders continue learning because systems, technologies, and environments constantly evolve. So let's look at the historical evolution of operations management. It evolved through the industrial revolution, scientific management, human relations, management science, Japanese manufacturing influence. Today, big data and artificial intelligence are taking operations management to the next level. Each
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era reflects leadership beliefs about people, productivity, and control.
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There was a major shift in operations driven by Japanese um manufacturers who refined practices and dramatically improved productivity and quality. Deming Edward's Deming is considered the father of TQM. Uh the Japanese influence helped fuel what's called the quality revolution, emphasizing prevention over inspection and continuous improvement over one-time fixes. One of the most important innovations was just in time production, which reduced waste
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by producing only what was needed when it was needed, forcing organizations to improve flow, flexibility, and problem solving. The leadership connection is clear. Continuous improvement isn't a program. It's a mindset. Organizations sustain excellence when leaders build a culture where problems are surfaced early and improvement becomes everyone's responsibility.
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Big data and artificial intelligent represents the latest evolution operations management and decision making. Organizations today generate massive amounts of data from production systems, supply chain, customers and digital platforms. The challenge is no longer collecting data but turning it into useful insight. Big data allows operations management managers to see systems in real time, identifying problems, respond faster to problems. Artificial
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intelligence takes this further by enabling predictive and prescriptive decisions, anticipating what will happen and recommending what should be done. These tools are now used in areas like demand forecasting, inventory optimization, scheduling, quality monitoring, and predictive maintenance. From a leadership perspective, analytics does not replace judgment, but it raises a standard for it. Leaders who understand and use data effectively
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are better equipped to manage complexity, reduce uncertainty and sustained operational performance. Environmental concern have become an in a central issue in modern operations management. Sustainability is no longer optional. It's an operational requirement. At its core, sustainability means using resources in a way that do not damage the ecological systems that support long-term human existence. For operations managers, this responsibility shows
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up in everyday decisions about product design, sourcing, manager use, and waste management. These uh choices extend across the supply chain influencing outsourcing decision, supplier relationships and transportation methods. Environmental performance is also closely tied to risk management especially in disaster preparedness and opera operational resilience. From a leadership perspective, environmental decisions are strategic and moral decisions.
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What leaders choose to prioritize in operations signals what the organization truly values. Strong operational leaders recognize that long-term competitiveness depends on building systems that are efficient, resilient, and environmentally responsible. Ethical issues in operations management are rarely abstract. They are embedded in daily decisions and routine processes. Choices about worker safety, product quality, financial reporting,
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environmental impact, and employment practices all carry ethical consequences. These decisions are often made under pressure to reduce cost, increase speed, and meet performance targets. What distinguishes ethical leadership is not the absence of pressure, but how leaders respond to it. Ethical operations leaders recognize that systems can encourage either responsible behavior or corner cutting. Over time, ethical standards become important part of the organization's
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culture, shaping trust with employees, customers, and the community. In operations, ethics is not enforced by slogans. It is reinforced by systems leaders design and behaviors they re they reward.
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So this lecture we've uh defined operations management, explained goods and services, explored supply chains, discussed the transformation process, reviewed the historical evolution of operations management, and explored some environmental and ethical issues. Operations management equips leaders to turn visions into reliable, repeatable results.
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So here's a list of the opera of of my operations management lectures. Uh this is lecture one. Um the next lecture will be uh competitiveness, strategy and productivity. Um so let me know in the comments uh are you a student? Are you currently enrolled in an operations management course? Uh what college or university are you going to? Um are you a graduate student or undergraduate student? Uh and what uh operations management topic interests you the most? And
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then if you work in operations management, what kind of company uh what role it do you have? And um does your organization primarily produce goods or provide services? Uh, if you like this video, give me a thumbs up and subscribe to the channel. I look forward to hearing from you.
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