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OPERATIONS MANAGEMENT (Chapter 1 and class discussion)

OPERATIONS MANAGEMENT (Chapter 1 and class discussion). Operations Functional area like marketing or finance It is considered a line function Includes manufacturing and services Management Planning, organizing, directing/leading and control Thus, OM = P,O,D/L,C of Operations.

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OPERATIONS MANAGEMENT (Chapter 1 and class discussion)

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  1. OPERATIONS MANAGEMENT(Chapter 1 and class discussion) • Operations • Functional area like marketing or finance • It is considered a line function • Includes manufacturing and services • Management • Planning, organizing, directing/leading and control Thus, OM = P,O,D/L,C of Operations

  2. OPERATIONS MANAGEMENTOperations and Productivity (Chapter 1) • What is OM ? Pg 4 • Operations • Manufacturing as well as services • Functional area. Examples p.5 • Management Pg 6 • Setting objectives • Planning, Organizing, Directing/Leading, Control of operations (Functions of Management) • Resources, Efficiency and Effectiveness • Strategic, tactical and operational plans • Role of Forecasting • Management decision making: scientific methods, behavioral issues, management science: optimal solutions; heuristic rules.

  3. Operations and Productivity (Chapter 1) • Recent trends 12 • The service sector growth 9- • Service Management as a field • Differences between goods and services OM • Customer perception of quality • Contact employee importance • Quality and productivity 13- • Supply chain partnerships • Continuous improvement • Global competition and outsourcing • Diversity in workforce and customer base • Ethics, SR and environmental concerns 18-

  4. Operations and Productivity (Chapter 1) • Productivity 13 • Measurement 14 single and multi factor • Ethics and social responsibility 18 • Globalizing operations 28 (from chapter 2) • Reasons 28; cultural and ethical issues 31 options 43 • Quality: Basics of TQM • System design: Basics of JIT • Supply chain partnerships: Basics of SCM (TQM, JIT and SCM are discussed later in separate chapters)

  5. DECISION MAKING IN OM • Environment analysis. SWOT • Corporate level strategy decisions • Mission and strategy 31- • Business level strategy (also called competitive priorities) decisions • Functional level strategy decisions – Operations Strategy • Actual operations decisions

  6. Operations StrategyChapter 2 • Competitive advantage through operations pg. 33- • Low cost, differentiation, response • Compare these with “competitive priorities” discussed in class. i.e., cost/price, quality, availability and flexibility • See Figure 2.4 p. 36 • Make a complete list of competitive strategies (“competitive priorities”)

  7. Strategic Decisions of OM(Operations Strategy) Pg. 39 • See the complete list (10) of strategic OM decision. 36 • Product design, process selection, capacity, quality, location and layout, HR/job design, SC strategies, inventory, scheduling-maintenance decisions • Special note on quality, inventory, scheduling and maintenance in the above list

  8. PRODUCT AND SERVICE DESIGNChapter 5 • Importance of generating new products p.158- • Product life cycle 159 • Percentage of sales from new products in leading firms 162 • Product development cycle. P. 163 • Information for product/service design • QFD p. 163- • Manufacturability 166 • Modular design 167; Teams/Concurrent Engineering 163- • More techniques/tools • CAD/CAM 167- ; Value analysis 169; environmental concerns 169; time to market 172- • Assembly drawings, Assembly charts 176-

  9. SERVICE DESIGNPg 178- • Customer satisfaction with services • Expectations and perceptions: The gap model • Variables in service design • Product/service balance • Contact level/worker-equipment combination • Customer interaction and participation 269 • Customization level • Technology • Employee selection • Service standards

  10. PROCESS STRATEGYChapter 7 • The aim is to select a process strategy/type • Process strategies/types p. 256- • Process focus; repetitive; product focus; mass customization • Process strategy fit with volume and variety p. 256- • Comparison of characteristics of process types p. 262- • Process design analysis tools 265- • Process mapping; process charts;

  11. PROCESS STRATEGY • Some production technologies 271- • Computerized machines (CNC) 272- ; Robots • AIS/RFID 272- • Materials handling; ASRS, AGV 273- • FMS; CIM 274- • Importance of continuous process improvement 198- • Process re-design 276- • Benchmarking p. 200 • Process improvement approaches 198- • PDCA, Six Sigma • Process analysis and improvement tools 203- • Involvement of customers, employees and suppliers 199-

  12. QUALITY STRATEGYPlanning QualityChapter 6 • Planning quality of products and services • Quality as a strategy Chapter 2 • Why improve quality ? p. 194- • Cost of Quality p. 196 • What is quality ? • Products. Garvin’s classification • Services. Dimensions of service quality 204

  13. QUALITY STRATEGY • Total Quality Management 198- • Deming, Juran and Crosby 196- • Leadership and strategic planning • Employee involvement; empowerment 199 • Customer focus • Supplier relations (details in chapter 11) • Continuous improvement 198- • Benchmarking 200; Tools 203- • Malcolm Baldrige National Quality Award 195 • ISO 9000 standards 197

  14. Statistical Quality ControlSupplement 6 • Acceptance sampling 237- • Sampling plans • AQL, LTPD, Type I and II errors • AOQ • Statistical Process Control (SPC) 222- • Natural and assignable variations 223- • Use of control charts • Control charts for attributes 230- • Control charts for variables 214- • Process capability 235-

  15. CAPACITY PLANNINGSupplement 7 • How capacity is measured. p. 286 • Design and effective capacity p. 287 • Capacity utilization; efficiency • Capacity planning over ST/MT/LT p. 286 • Factors affecting capacity • Demand and demand management 289 • Productivity, Quality, Location, Layout, Scheduling • External factors

  16. CAPACITY PLANNINGSupplement 7 • Capacity planning options - short term • Capacity planning options - medium term • Capacity expansion for long term needs • Timing decisions 290 • Scale decisions • Economies and diseconomies of scale 288 • Techniques • Breakeven analysis; decision trees; financial analysis 291-

  17. Facility LocationChapter 8 • Nature and Importance of location decisions 312 • Factors affecting location decisions. 313- • Locating facilities globally • Methods of evaluating location alternatives • Factor rating method 317 • Location breakeven method 318 • Center of gravity method 319 • Location of services 322

  18. Facilities LayoutChapter 9 • Nature and importance of the problem 342 • Types of layouts 342 • Process (oriented) layouts 349- • Information needed; evaluating alternatives; computer programs for evaluation • Variations: offices, stores • Product (oriented) layouts = assembly lines 358- • Cycle time; output; no. of workers; idle time; efficiency

  19. Human Resources PlanningChapter 10 • Importance of long term HR planning; principles • HR planning as an integral part of strategic planning • Quality and productivity • Traditional HRM activities • Hiring, training, evaluation, compensation • Modern HRM issues • Job design 386- ; motivation 386; employee involvement, participation, teams 389, empowerment • Establishing work standards • Supplement 10 • d

  20. SUPPLY CHAIN MANAGEMENTChapter 11 • What is a supply chain? What is SCM? 432 • Strategic importance of the supply chain 432- • SC decisions and business strategy • SC costs as a percentage of sales • The outsourcing v. vertical integration decision 434- • Supplier management. Basic principle 446- • Selection 446; many or few suppliers? 438 • Orientation/mutual agreement on goals/development • Evaluation and rating • Incentives • Participation

  21. SUPPLY CHAIN MANAGEMENTChapter 11 • Integration of the supply chain 441 • What is integration ? Advantages. • Efficient v responsive supply chains • Technology of integration • RFID 442 • E-commerce Supplement 11 • Distribution/Logistics management 448-

  22. Inventory ManagementChapter 12 • Inventory management is an integral part of SCM • Functions of inventory 476 Types 476- • Inventory classification – ABC classification 477 • Uses of ABC classification: Inventory review; cycle counting 479 • The simple (EOQ) inventory model for uniform demand 482 • Reorder point model when there is a lead time 486 • Other variations: simultaneous production; quantity discounts; backorders • Inventory model for non uniform (probabilistic) demand 482- ; Safety stock

  23. AGGREGATE PLANNINGChapter 13 • Aggregate planning is medium term prod planning p. 518- • Relationship to other plans 519 • Aggregate planning strategies 520 • Chase, level and mixed strategies 523- ; adv. And disadv. • Methods for selecting a plan 524- • Aggregate capacity planning in services 530- • Managing demand and supply • Yield management 532-

  24. MRP and ERPChapter 14 • The master production schedule p. 552 • MRP Process • Bill of materials 555 • Inventory records 556 • Lead times 557 • Purchase orders outstanding 556 • Lot sizing 563 • Integrating Capacity planning. MRP II 567- • ERP systems 570

  25. SHORT TERM SCHEDULING Chapter 15 • Examples 590 • Scheduling criteria 593 • completion/flow time, waiting time, makespan, utilization • Sequencing jobs in work centers • Priority rules: FCFS, SPT, EDD, LPT, Slack 599 • Critical ratio 602 • Scheduling with one machine/resource 600 • Scheduling with two machines 603 • Multiple machine situations • d

  26. JIT and LEAN PRODUCTION SYSTEMS Chapter 16 • JIT philosophy • Waste reduction. Variability reduction 628 • Pull v. Push production systems 628 • Partnerships with suppliers 629 • JIT and operations • Quality 641 • Layout 632 • Inventory 633 • Scheduling 637 • Work force 641 • What is “lean production” ? 641

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