Classification And Purpose Of Production And Operations Management 2324

Classification and Purpose of Production and Operations Management

2. Topics Covered in this Report
•Operations Management
–Definition
–Brief History
–Importance
–Productivity, Competitiveness, & Strategy
•Manufacturing Systems
–Features, Components & Types
•Production Systems
–Features, Components & Types

3. The planning, organizing,
controlling, and directing, of
systems or processes that create
goods and/or services.

4. Organization of the
Operations Function
Operations Marketing
Finance

5. History of Operations
Management
Pre Industrial Revolution
•Public works or
projects for the
government
•Pyramids of Egypt,
Great Wall of China,
Aqueducts of Rome,
etc.
•Craft Production

6. History of Operations
Management
Industrial Revolution
•1770s in England
•Replaced manpower
with machine power
•Invention of machines
–Steam engine
•Standardization of
gauges

7. History of Operations
Management
Scientific Management
•Focused on observation,
measurement, analysis &
improvement of work
design
•Replaced craft production
by mass production
•Low skilled workers
replaced highly skilled
workers

8. History of Operations
Management
Scientific Management
•Management Pioneers
–Frederick Taylor
–Henry Gantt
–Harrington Emerson
–Henry Ford
Taylor Gantt
Ford

9. Human Relations Movement
•Emphasized on the human
factor in production
•Emergence of
Motivational Theories by
–Frederick Herzberg
–Douglas Mcgregor
–Abraham Maslow
History of Operations
Management
Herzberg
Maslow Mcgregor

10. History of Operations
Management
Japanese Influences
•Developed and refined
existing management
practices
•Introduced the concept
of quality, continual
improvement, and
time based
management

11. History of Operations
Management
Recent Trends
•Internet & Electronic
Business
•Supply Chain
Management
–Supply chain is a
sequence of activities
and organizations
involved in producing
a good or a service

12. Importance of Operations
Management
1.Operations activity is the core of all business
organizations
2.A large percentage of jobs are in the field of
operations
3.All activities in the other areas of business are
interrelated with operations management
4.Responsible for a large portion of the company’s
assets
5.It has a major impact on quality & is the face of
the company to its customers

13. Productivity
•An index measure that
measures output
(goods & services)
relative to input (labor,
materials, energy, and
other resources)

14. Productivity Measures
•Single Operation
Productivity = Output
Input
•Multifactor Measure
= Output
Labor+Capital+Materials
•Total Measure
= G&S Produced
All Resources Used
Examples:
= Yards of carpet installed
Labor hours worked
= 720 Square yards
4 workers x 8 hrs/worker
= 720 yards
32 hours
= 22.5 yards/hour

15. Factors that Affect Productivity
•Capital
•Methods
•Quality
•Technology
•Management

16. Steps to Improve Productivity
•Develop Productivity Measures
•Look at the system as a whole and determine
which operations are critical
•Develop methods for achieving productivity
improvements
•Establish reasonable goals
•Consider Incentives
•Measure improvements & publicize them
•Do not confuse productivity with efficiency

17. Competitiveness
•How effectively an organization
meets the needs of customers
relative to others that offer
similar goods or services

18. Ways to remain competitive
through Operations
1.Price
2.Quality
3.Product / Service Differentiation
4.Flexibility
5.Time
6.Service
7.Management & Workers

19. Operational Strategy
•Strategy is a plan for achieving goals
•Organizational strategy provides for the
overall direction for the organization. It is
very broad and covers the entire
organization
•Operations strategy deals only with the
operations aspect of the organization

20. Things to consider in
Strategy Formulation
•External Scanning
–Economic
Conditions
–Political Conditions
–Legal Environment
–Technology
–Competition
–Markets
•Internal Scanning
–Human Resources
–Facilities &
Equipment
–Financial Resources
–Customers
–Products/Services
–Technology
–Suppliers
–Others
1.External Factors

21. Things to consider in
Strategy Formulation
1.Distinctive Competency
–Cost
–Quality
–Time
–Flexibility
–Customer service
–Location

22. Examples of Distinctive
Competencies
711, Mercury Drug, Service Stations,
Banks/ATMs
ConvenienceLocation
Disneyland, IBMSuperior Customer Service
Burger King, Emergency Rooms
Jollibee, Supermarkets
Variety
Volume
Flexibility
Domino’s Pizza, UPS
FedEx
Rapid Delivery
On-time Delivery
Time
Five Star Hotels, Cadillac
Kodak, Xerox
High Performance
Consistent Quality
Quality
Motels, Thrift ShopsLow costPrice
Company/ServiceCompetencyType

23. Manufacturing Systems
•A collection of all interrelated activities
involved in producing goods
•Manufactured goods are tangible items that
can be transferred from one place to another
and can be stored for purchase by a
consumer at a later date and time

24. Components of a Manufacturing
System
•Inputs & Outputs
•Suppliers & Customers
•Processes
•Managers & Feedback
Suppliers CustomerInput OutputProcess
Manager

25. Productive System Types
Continuous Flow:
–Characterized by high
production volume and a
high degree of product
standardization
–Processes are highly
specialized
–High degree of automation
–Little use for skilled work
force
–Costs are generally low

26. Productive System Types
Mass or Assembly line:
–High production
volume
–Small variety of
different products
–Labor skill
requirements are low

27. Productive System Types
Batch or Intermittent:
–Used for producing small
lots of similar products
–Products are made in
batches with short
production runs
–Differs from mass
production in the materials
used, machine setups, &
layout

28. Productive System Types
Job Shop:
–Produce a wide variety of
small quantity of
specialized products
–Products are customized
–May be produced by
different sequences of
operations
–General purpose equipment
is used
–Labor force must be highly
skilled

29. Productive System Types
Project:
–One in which unique
and unusually large
and complex items are
produced
–Products are assembled
at a fixed location
–Components and
subassemblies must be
brought to the location

30. Service Systems
•A collection of all interrelated activities
involved in producing services
•Non-manufactured goods are intangible
items that cannot be transferred from one
place to another and is usually consumed by
the consumer at the point of sale

31. Distinctive Features of
Service Systems
•Customer Contact
•Uniformity if Input
•Labor content of jobs
•Uniformity of Output
•Labor content of jobs
•Measurement of productivity
•Simultaneous production and delivery
•Quality assurance

32. Service Strategy
•Identification of a target market
•Development of a service concept to
address targeted customers’ needs
•Design of an operating strategy to support
the service concept
•Design of a service delivery system to
support the service concept