Académique Documents
Professionnel Documents
Culture Documents
MODULE 1
(04 Hours)
Introduction to Production & Operations Management (POM): Nature of production & Operations, Systems approach to POM, Factors affecting POM today, types of Production and Production systems, Productivity and competitiveness, Production/Operations Strategy.
Chapter 1
Production and Operations Management (POM): An Introduction
Overview
Introduction Historical Milestones in POM Factors Affecting POM Today Different Ways of Studying POM Wrap-Up: What World-Class Producers Do
Sales Department
Finance Department
Introduction
Production and operations management (POM) is the management of an organizations production system. A production system takes inputs and converts them into outputs. The conversion process is the predominant activity of a production system. The primary concern of an operations manager is the activities of the conversion
Organizational Model
Finance Sales POM Marketing QA HRM
Engineering
MIS
Accounting
Facilities Production & Inventory ontrol Quality Assurance & Control Procurement Engineering Design Industrial Engineering Process Engineering
10
11
12
13
14
Scientific Management
Frederick Taylor is known as the father of scientific management. His shop system employed these steps:
Each workers skill, strength, and learning ability were determined. Stopwatch studies were conducted to precisely set standard output per worker on each task. Material specifications, work methods, and routing sequences were used to organize the shop. Supervisors were carefully selected and
15
Scientific Management
In the 1920s, Ford Motor Companys operation embodied the key elements of scientific management:
standardized product designs mass production low manufacturing costs mechanized assembly lines specialization of labor interchangeable parts
16
17
Operations Research
During World War II, enormous quantities of resources (personnel, supplies, equipment, ) had to be deployed. Military operations research (OR) teams were formed to deal with the complexity of the deployment. After the war, operations researchers found their way back to universities, industry, government, and consulting firms.
18
19
20
21
Production as a System
Production System Conversion Subsystem
Control Subsystem
Inputs
Outputs
22
Market
Competition, Customer Desires, Product Info.
Primary Resources
Materials, Personnel, Capital, Utilities
23
Conversion Subsystem
Physical (Manufacturing) Locational Services (Transportation) Exchange Services (Retailing) Storage Services (Warehousing) Other Private Services (Insurance) Government Services (Federal, State,
Local)
24
Indirect
Waste Pollution Technological Advances
25
26
27
Strategic Decisions
These decisions are of strategic importance and have long-term significance for the organization. Examples include deciding:
the design for a new products production process where to locate a new factory whether to launch a new-product development plan
28
Operating Decisions
These decisions are necessary if the ongoing production of goods and services is to satisfy market demands and provide profits. Examples include deciding:
how much finished-goods inventory to carry the amount of overtime to use next week the details for purchasing raw material next month
29
Control Decisions
These decisions concern the day-to-day activities of workers, quality of products and services, production and overhead costs, and machine maintenance. Examples include deciding:
labor cost standards for a new product frequency of preventive maintenance new quality control acceptance criteria
30
31
32
OBJECTIVES
Operations Management Why Study Operations Management? Transformation Processes Defined Operations as a Service The Importance of Operations Management Historical Development of OM Current Issues in OM
33
34
Business Education
Operations Management
Career Opportunities
Cross-Functional Applications
35
36
Operations Management Decision Types Strategic (long-term) Tactical (intermediate-term) Operational planning and control (short-term)
37
38
Transformations
Physical--manufacturing
Locational--transportation
Exchange--retailing
Storage--warehousing
Physiological--health care
Informational--telecommunications
39
Operations
Marketing
Plant Manager
Operations Manager
Director
40
Flexibility
Operations Management
Speed
41
Information
Operations Management
Sales Support
Field Support
42
Synergies must exist with other functional areas of the organization Operations account for 60-80% of the direct expenses that burden a firms profit.
43
Historical Development of OM
JIT and TQC
44
45
Current Issues in OM
Coordinate the relationships between mutually supportive but separate organizations. Optimizing global supplier, production, and distribution networks. Increased co-production of goods and services
46
47
G.Dessler, 2003
48
Conversion System
A production system that converts inputs (material and human resources) into outputs (products or services); also the production process or technology.
Output
A direct outcome (actual product or service) or indirect outcome (taxes, wages, salaries) of a production system.
G.Dessler, 2003
49
FIGURE 151
G.Dessler, 2003
50
G.Dessler, 2003
51
Manufacturing System
Service System
Continuous Production
Intermittent Production
Batch Production
Job Production
Processing Production
52
Mass Production
A special type of intermittent production process using standardized methods and single-use machines to produce long runs of standardized items.
G.Dessler, 2003
53
54
G.Dessler, 2003
55
56
57
58
59
Mass/ Flow
High Large Less No Less Line staff Automobile Sugar Refinery
Process
Low V. Large High No Less Line staff Chemical Petroleum Milk proces.
Job
High Small Low More High Functional
Batch
High Medium High More High Functional
60
CHAPTER
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
61
Competitiveness:
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
62
63
64
65
66
67
Mission/Strategy/Tactics
Mission Strategy Tactics
How does mission, strategies and tactics relate to decision making and distinctive competencies?
68
Strategy
Strategies
Plans for achieving organizational goals
Mission
The
Mission Statement
Answers
Goals
Provide
Tactics
The
69
Figure 2.1
Organizational Strategies
Functional Goals Finance Strategies Marketing Strategies Operations Strategies
70
Table 2.2
71
72
Operations Strategy
Operations strategy The approach, consistent with organization strategy, that is used to guide the operations function.
73
Strategy Formulation
Distinctive competencies Environmental scanning SWOT Order qualifiers Order winners
74
Strategy Formulation
Order qualifiers
Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase
Order winners
Characteristics of an organizations goods or services that cause it to be perceived as better than the competition
75
76
77
Focuses on maintaining or improving the quality of an organizations products or services Quality at the source Focuses on reduction of time needed to accomplish tasks
Time-based strategies
78
Irwin/McGraw-Hill
79
Operations Strategy
Decisions
Core Competencies
80
Operations Priorities
Cost Quality Delivery Speed (Also, New Product Introduction Speed) Delivery Flexibility Greenness Delivery Reliability Coping with Changes in Demand Other Product-Specific Criteria
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2006
4
81
Traditional Approach
FOCUS FOCUS
FOCUS FOCUS
82
World-Class Organizations
World-class Organizations no longer view cost, quality, speed of delivery, and even flexibility as tradeoffs. They have become order qualifiers.
83
Strategic Vision
Enterprise Capabilities
Operations & Supplier Capabilities Technology Systems People R&D CIM JIT TQM Distribution
84
1) SEGMENT MARKET BY PRODUCT GROUPS 2) IDENTIFY PRODUCT REQUIREMENTS 3) DETERMINE ORDER WINNERS AND QUALIFIERS 4) CONVERT ORDER WINNERS INTO SPECIFIC PERFORMANCE REQMTS
85
Business Strategy
Delivery performance High quality products & service Customer service & Flexibility
Positioning the production system Product / service plans Process and technology plans Strategic allocation of resources Facility Plan, Capacity Plan, Location and Layout.
86
Productivity
87
A measure of the effective use of resources, usually expressed as the ratio of output to input Productivity ratios are used for Planning workforce requirements Scheduling equipment Financial analysis
88
Less emphasis on short-term financial payoffs and invest more in R&D. Revise corporate strategies to include responses to foreign competition.
Knock down communication barriers within organizations and recognize mutuality of interests with other companies and suppliers.
Irwin/McGraw-Hill
89
90
U. S. Competitiveness Drivers
Product/Service Development - NPD Teams speed development and enhance manufacturability Waste Reduction (LEAN/JIT Philosophy) WIP, space, tool costs, and human effort Improved Customer-Supplier Relationships Look for Win-Win! Taken from Japanese Keiretsu Early Adoption of IT Technology Including PC Technology WWW - ERPS
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2006 16
91
Productivity
Outputs Productivi ty = Inputs
Partial measures
output/(single input)
output/(multiple inputs) output/(total inputs)
The McGraw-Hill Companies, Inc., 2006
17
Multi-factor measures
Total measure
Irwin/McGraw-Hill
92
93
Example--Labor Productivity
10,000 units/500hrs = 20 units/hour ...
... or we can arrive at a unit less figure (10,000 unit*$10/unit)/(500hrs*$9/hr) = 22.22 Can you think of any advantages or disadvantages of each approach? Irwin/McGraw-Hill
19
94
Productivity Growth
95
Productivity Growth =
Current Period Productivity Previous Period Productivity Previous Period Productivity
Measures of Productivity
Table 2.4
96
Partial measures
Multifactor measures Total measure
Output Labor
Output Energy
97
98
Example 3
7040 Units Produced Sold for $1.10/unit Cost of labor of $1,000 What is the multifactor productivity? Ans. 2.20
99
Example 3 Solution
MFP = Output Labor + Materials + Overhead
MFP =
MFP =
100
Technology
Management
101
102
103
Figure 2.3
Bottleneck Operation
10/hr
Machine #1 Machine #2
10/hr
Bottleneck Operation
10/hr 10/hr
30/hr
Machine #3
Machine #4
104
Improving Productivity
Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Dont confuse productivity with efficiency