1-OperationsMgmt-overviewslidshowd-s.pdf

Operations mgt pdf and explained

1. ISE 140
Operations Planning and Control
Dr. Anil Kumar
HANDOUTS ARE FOR USE IN ISE 140 ONLY
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2. Production Systems Overview

3. Design a store layout
which gives smooth and
effective flow
Design elegant products which can be flat-packed
efficiently
Site stores of an appropriate size in the most effective locations
Maintain cleanliness and safety of storage area
Arrange for fast replenishment of products
Monitor and enhance quality of service to customers
Continually examine and improve operations practice
Ensure that the jobs of all staff encourage their contribution to business success
Operations management at IKEA
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4. 6
Efficiency Responsiveness
1. Inventory2. Transportation3. Facilities
4. Information
Supply chain structure
Logistical
Drivers
How to achieve
5. Sourcing 6. Pricing
Cross- Functional Drivers
Drivers of Supply Chain

5. What is Operations Management?

6. Customers
Transformed
resources
•Materials
•Information
•Customers
Transforming
resources
•Facilities
•Staff
Operations input resources and outputs
Input
resources
Output
products
and services
Transformation process
Outputs are finished goods (products) and services
that add value for customers
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7. Operations Management
Set of activities (conversion process) which
transforms inputs such as raw material and
labor into outputs in the form of finished
goods and services.
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8. Stage of Production Value
Added
Value of
Product
Farmer produces and harvests wheat$0.15 $0.15
Wheat transported to mill $0.08 $0.23
Mill produces flour $0.15 $0.38
Flour transported to baker $0.08 $0.46
Baker produces bread $0.54 $1.00
Bread transported to grocery store$0.08 $1.08
Grocery store displays and sells bread$0.21 $1.29
Total Value-Added $1.29
A Supply Chain for Bread
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9. Characteristics of Goods and Services
Tangible product
Consistent product definition
Production usually separate from
consumption
Can be inventoried
Low customer interaction
Intangible product
Inconsistent product definition
Produced and consumed at the
same time
Often unique
High customer interaction
Often knowledge based
Goods Service
Automobile assembly factory
Physician (General practitioner)
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10. Characteristic/Criteria Goods Service
Output Tangible Intangible
Customer contact Low High
Uniformity of input High Low
Labor content Low High
Uniformity of output High Low
Measurement of productivity Easy Difficult
Opportunity to correct problemsHigh Low
Evaluation (in terms of quality)Easier Difficult
Inventory Easy Difficult
Resale Easier Difficult
Transport Easy (product) Difficult (provider)
Sales Sellingdistinct from productionSelling is partof service
Site of facility Important for cost Important for customer contact
Patentable Usually Not usual
Goods versus Services -Summarized
Control of quality
Automation control
Revenue generation/control
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11. Role of OM within an Organization
Marketplace
Corporate
Strategy
Marketing
Strategy
Generates demand or at least
take order for a product or
service
Operations
Strategy
Creates the
product
Finance /
Accounting
Strategy
Tracks how well the
organization is doing, pays the
bills, collects the money
OM affects:
Companies’ ability to compete
Nation’s ability to compete internationally
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12. Functions -Airline
Operations
Finance/
Accounting
Marketing
Ground
Support
Flight
Operations
Facility
Maintenance
Catering
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13. Functions -Manufacturer
Operations
Finance/
Accounting
Marketing
Production
Control Manufacturing
Quality Control
Purchasing
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14. Top-down Approach to OM Strategy
•Operations Strategy Decisions
•Strategic (long-range)
•Needs of customers
(capacity planning)
•Tactical (medium- range)
•Efficient scheduling of resources
•Operational planning
and control (short-range)
•Immediate tasks and activities
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15. Inter-functional relationships between operations and other
functions
Engineering/
technical function
Accounting and
finance function
Human resources
function
Information
technology (IT)
function
Understanding of the
capabilities and constraints of
the operations process
New product and service
ideas
Understanding of the capabilities
and constraints of the operations
process
Market requirements
Financial analysis for
performance and decisions
Provision of
relevant data
Recruitment
development and
training
Understanding of human resource
needs
Analysis of new technology
options Understanding of process
technology needs
Provision of systems for design,
planning and control, and
improvement
Understanding of
infrastructural and
system needs
Marketing function
Product/service
development function
Operations function
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16. Historical Evolution of OM
•Industrial revolution (1770’s)
•Started in England
•Substituted machine power for human power
•Steam Engine (1781) (James Watt)
•Scientific management (1911) (Frederick Taylor)
•Mass production (Henry Ford)
•Interchangeable parts (Eli Whitney)
•Division of labor (Adam Smith)
•Human relations movement (1920-60)
•Hawthorne Effect (Elton Mayo)
•Motivation theories (Maslow, Herzberg)
•Decision models (1915, 1960-70’s)
•Influence of Japanese manufacturers
•Just-In-Time (JIT)
•Total Quality Management (TQM)
•Business Process Reengineering
•Lean / Six Sigma
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18. Eli Whitney
(1765 –1825)
•Concept of interchangeable parts
•Before this time, guns were made one at a time. Each gun was
different.
•If a part broke, a new part had to be created.
•Whitney created muskets with exactly the same parts, so any part
would fit any gun.
•The use of interchangeable parts speeded up production, made
repairs easier, and allowed the use of lower-paid, less skilled workers.
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19. Frederick Taylor
(1856 –1915)
•Considered the father of “Scientific Management”
•Systematic approach to increasing worker productivity through time
study, standardization of work, and incentives
.
•Created efficiency principles
1.Study the way workers perform their tasks, gather all the informal job knowledge that
workers posses, and experiment with ways of improving how tasks are performed.
2.Codify the new methods of performing tasks into written rules and standard operating
procedures.
3.Carefully select workers who possess skills and abilities that match the needs of the
task, and train them to perform the task according to the established rules and
procedures.
4.
Establish a fair or acceptable level of performance for a task, and then develop a pay
system that provides a reward for performance above the acceptable level.
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20. Frank and Lillian Gilbreth
(1868–1924, 1878-1972)
•Pioneers in the field ofmotion studies
•Provided the foundation for job simplification, meaningful work, and
incentive wage plans.
•Developed the laws of human motion from which evolved the
principles of motion economy
•Analyzed each motion of work for wasted efforts in an attempt to
reduce each task to the smallest amount of expended time and
energy.
•Professed: effective training, effective work methods, improved
work environment, positive psychological perspective.
•Book “Cheaper by the dozen”
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21. Henry Ford
(1863 –1947)
•1903 –created Ford Motor Company
•1913 –Moving assembly line to make Model T
•Unfinished product moved by conveyor past work
station
•Paid workers very well for 1911 ($5/day!)
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22. W Edwards Deming
(1900 –1993)
After college, worked for U.S. Census Bureau (1930 era)
Worked for the War Department –WWII
Was sent to Japan to do census taking
JUSE (Union of Japanese Scientists and Engineer) brought him back to
teach statistics and statistical quality control
Was “discovered” in the U.S. when NBC published its white paper
–“If Japan can, why can’t we?” (1980).
He was an overnight success at age 80!
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23. Deming's Philosophy
•Management and workers should speak a common language:
The language of statistical process control
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24. Developments: 1990s
•Offer a greater variety of product choices
on a mass scale
Flexibility
(mass
customization)
•Developing new product designs & delivering customer orders more quickly than competitors
Time-based
competition
•Cooperating with suppliers & customers to reduce overall costs of the supply chain & increase responsiveness to customers
Supply Chain
Management
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25. Developments: 1990s
•International trade agreements open new markets
for expansion & lower barriers to the entry of
foreign competitors (e.g. NAFTA)
•Creates the need for decision-making tools for
facility location, compliance with local regulations,
tailoring product offerings to local tastes, managing
distribution networks, …
Global
competition
•Pressure from consumers & regulators to reduce,
reuse & recycle solid wastes & discharges to air &
water
Environmental
issues
•Internet & related technologies enable new methods
of business transactions:
•E-tailing creates a new outlet for retail goods &
services with global access and 24-7 availability
•Developing influence of broadband & wireless
Electronic
Commerce
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26. New Challenges in OM
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27. Major Operations and Supply Chain Activities
Process
selection
Forecasting
Capacity
planning
Inventory
management
Planning and
control
Purchasing
Logistics
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28. Key Decisions of Operations Managers
WhatWhat resources/what amounts
WhenNeeded/scheduled/ordered
WhereWork to be done
How Designed
Who To do the work
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29. Career Paths -Operations and Supply Chain Management
Analyst
Demand Planner
Production Manager
Service Manager
Sourcing Manager
Commodity Manager
Supplier Development Manager
International Logistics Manager
Transportation Manager
-----etc
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30. Professional Organizations
APICS Association for Operations Management
ISM Institute for Supply Management
CSCMP The Council of Supply Chain Management
Professionals
ASQ The American Society for Quality
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