“ Introduction t o Operations & Competitiveness ”

1. “IntroductiontoOperations&Competitiveness”

2. What is TheOperations? Jobsortasksconsisting of oneormore element sor subtasks, performedtypically in onelocation.

3. Definition of 'OperationsManagement'

4. Operationsmanagementreferstotheadministration of businesspracticestocreatethehighestlevel of efficiencypossiblewithin an organization. Todesign InputsOutput

5. Operations managementcan be subdivided ; • Thepurchaseandstorage of rawmaterials; • Theproductionandstorage of finishedgoods • Thedistribution of finishedgoods

6. CHALLENGES FOR OPERATIONS MANAGEMENT • Very Rapid Technological Change • Ethical issues • Increasing diversity of the workforce • Environmental impact issues • Economic volatility

7. Duties and Responsibilities of Operation Manager

8. Provideoperationalsupportandguidancetostaff.  • Assistin developingoperatingandcapitalbudgets. • Monitorandcontrolexpenseaccordingtoallottedbudget. • Assistin interviewing, recruitingandtrainingcandidates. • Manageworkassignmentandallocationforstaff.  • Conductperformancereviewandprovideperformancefeedbacktostaff. 

9. Maintainaccurateandcleardocumentationforoperationalproceduresandactivities. Maintainaccurateandcleardocumentationforoperationalproceduresandactivities.  • Work in compliancewithcompanypoliciesandprocedures.  • Ensureteamfollowsstandardoperatingproceduresforalloperationalfunctions. • Conductregularmeetingswithteamtodiscussaboutissues, concerns, updatesetc.  • Supportoperational risk andauditprocessforthepurpose of preventivemaintenance. 

10. What is TheProcess?

11. ProcessIssues… Averagedemandperweek Productioncapacityavailable Workingprocedures StorageSpace Efficiency/Productivity PaymentSystems Quality StockControl

12. A transformation process can give a failing business new life and can improve the smooth operation of any company.

13. The input-transformation-output model T ransformed resources Materials Information Customers Goods Transformation Input Out put and process services T ransforming resources Facilities Staff Source: Slack, 2001

15. ProductionandOperationsSystems

16. Throughouttheoperationsprocessdecisionshavetobe madeaboutthenature of thatprocess. • Planning Whattoproduce? • Production Howtoproduce it? • Purchasing Cost, Quantities, Quality? • Warehousingandstorage(includingstockcontrol) • DistributionIn-houseoroursourced? Each of theseinteractwithotherfunctionalareas of theorganisation.

17. Historical Events In POM • TheIndustrialRevolution • Post-CivilWarPeriod • ScientificManagement • HumanRelationsandBehaviorism • OperationsResearch • The Service Revolution

18. 1. TheIndustrialRevolution • Theindustrialrevolution spread fromEnglandtootherEuropeancountriesandtothe United States. • In 1790 an American, Eli Whitney, developedtheconcept of interchangeableparts. • Inthe 1800s thedevelopment of thegasoline engine andelectricityfurtheradvancedtherevolution. • Bythemid-1800s, theoldcottagesystem of production had beenreplacedbythefactorysystem.

19. 2. Post-CivilWarPeriod • Duringthe post- CivilWarperiodgreatexpansion of productioncapacityoccurred. • By post-CivilWarthefollowingdevelopments set thestageforthegreatproductionexplosion of the 20th century: • Increasedcapitalandproductioncapacity • Theexpanded urban workforce • New Western US markets • An effectivenationaltransportationsystem

20. 3. ScientificManagement • Frederick Taylor is fatherof scientificmanagement. • His shopsystememployedthesesteps: • Eachworker’sskill, strenght, andlearningabilityweredetermined. • Stopwatchstudieswereconductedtoprecisely set Standard outputperworker on eachtask. • Materialspecifications, workmethods, androutingsequenceswereusedto organize theshop. • Supervisorswerecarefullyselectedandtrained. • Incentivepay systemswereinitiated.

21. 4. HumanRelationsandBehaviorism • Inthe 1927-1932 period, researchers in theHawthorneStudiesrealizedthathumanfactorswereaffectingproduction. • Fromthework of behavioralistscame a gradualchange in thewaymanagersthoughtaboutandtreatedworkers.

22. 5. OperationsResearch • DuringWorldWar II, enormousquantities of resources had to be deployed. • Afterthewar, operationsresearchesfoundtheirwaybacktouniversities, industry, government, andconsultingfirms.

23. 6. The Service Revolution • Thecreation of servicesorganizationsacceleratedsharplyafterWorldWar II. • Today, morethantwo-thirds of the US workforce is employed in services. • Investmentper Office workernowexceedstheinvestmentperfactoryworker.

24. What is TheLabor Of Division? A productionprocess in which a workerorgroup of workers is assigned a specializedtask in orderto incereaseefficiency.

25. OperationsFunction Theoperationsfunctionbringstogetherrawmaterialswiththeproductionprocesstomakeproductsthatcustomersneed. Italsosharesideasacrossthecompanyabouthowtoimproveprocessesorachievecostsavings.

28. GlobalizationandCompetitiveness Globalizationis theprocess of internationalintegrationarisingfromtheşnterchange of worldviews, products, ideas, andotheraspects of culture. Competitivenesspertainstotheabilityandperformance of a firm, sub-sectororcountrytosellandsupplygoodsandservices in a given market, in relationtotheabilityandperformance of otherfirms, sub-sectorsorcountries in the in thesame market.

29. Global Competitiveness Businesses must accept the fact that, to prosper, they must view customers, suppliers, facility locations, and competitors in global terms. Forces contributing to increased global competition: • Improved transportation and communication technologies • Loosening of regulations on financial institutions. (until lately) • Increased demand for lower cost, imported services and goods • Reduced import quotas and other trade barriers

30. ImportantFactors of Competitiveness • Product and service design • Cost • Location • Quality • Quick response • Flexibility • Inventory management • Supply chain management • Service and service quality • Managers and workers

31. Competitivepriorities • Managersmustanswers four importantoperationsquestions: Will you compete on – Cost? Quality? Time? Flexibility? • All of the above? Some? Tradeoffs?

32. Competing on cost • Typically high volume products • Often limit product range & offer little customization • May invest in automation to reduce unit costs • Can use lower skill labor • Probably use product focused layouts • Forexample Lincoln Electiric: reducedcosby $10 million a yearfor 10 years.(skilledmachineoperatorssavethecompanymillonsthatwouldhavebeenspent on automatedequipment)

33. Competing on quality • High performance design: • Superior features, high durability, & excellent customer service • Product & service consistency: • Meets design specifications • Close tolerances • Error free delivery • ForexampleRitz-CarltonHotel-onecustomer at a time • Everyemployee is empoweredtosatisfy a guests’swish • Teams at alllevels set objectivesanddevisequalityactionplans • Eachhotel has a qualityleader • Qualityreportstracks(guestroompreventivemaintenancecycles,percentage of check-inswith no waiting,time spenttoachiveindustry-bestcleanroomappearence) • Guestpreferancereportsarerecorded in a database

34. Competing on time • Fast delivery: • Focused on shorter time between order placement and delivery • On-time delivery: • Deliver product exactly when needed every time • Rapid development speed • Using concurrent processes to shorten product development time • Forexample: • Dell:shipscustom-builtcomputers in twodays • Motorola:needslessthan 30 minutestobuildtoorderpagers

35. Competing on flexibility • Product flexibility: • Easily switch production from one item to another • Easily customize product/service to meet specific requirements of a customer • Volume flexibility: • Ability to ramp production up and down to match market demands Forexample: Anderson Windows=>number of productsofferedgrewfrom 28,000 to 86,0000. Number of errorsaredownto 1 per 200 truckloads CustomFootShoeStore: customer’sfeetarescannedelectronicallytocapturemeasurementsçCustomshoesaremailedtothecustomer’shome in weekspricesarecompatebletooff-the-shelfshoes.

36. Measures Of Competitiveness • Gross domestic product (GDP) • Import/export ratio • Productivity = output / input

37. Efficiency EconomicEfficiency • Itreferstotheratio of outputstoinput. Thismeansthateconomicefficency is gettingthemostoutputfromtheleastamount of inputs. OrganizationalEfficiency • It is a ratio of productor service outputstoland, capitalorlaborinputs. • Efficiency (%) = (Output/Input)*100%

38. Productivity • Productivity is theratio of outputstoinputs. • Itreferstothevolume of outputproducedfrom a givenvolume of inputsorresources. Labourproductivity • Total output in a given time period / Outputperworker = Quantity of labouremployed Capital productivity • Total output in a given time period / Outputpercapitalinput = QuantityorValue of Capital employed

39. OtherDefinitions… • Productivity is thefacultytoproduce (Littre, 1883) • Productivity (outputperhour of work) is thecentrallong-runfactordetermininganypopulation'saverage of living(Thurow, 1993) • Productivity is theabilitytosatisfythemarket'sneedforgoodsandserviceswith a minimum of total resourceconsumption(MosengandRolstadas, 2001)

40. Aims of Productivity: - Adopttotechnologychanges - Improveefficiency - Real costsaving - Benchmarking productionprocess - Livingstandards

41. Productivity can be improvedby: • Raisingtheskilllevel of theworkersthroughtraining • Usingmoretechnologicallyadvancedequipment in theproductionprocess. • Improvingthemotivationlevel of theemployees • Bymanagingtheavailableresource in a moreefficientway.