Thursday afternoon

1. Thursday afternoon Operations Management, HR, and MIS

2. PRODUCTION and PRODUCTION MANAGEMENT • Production -- The creation of goods using land, labor, capital, entrepreneurship and knowledge (the factors of production). • Production Management -- All the activities managers do to help firms create goods.

3. DEVELOPMENTS MAKING U.S. COMPANIES MORE COMPETITIVE • Computer-aided design and manufacturing • Flexible manufacturing • Lean manufacturing • Mass customization

4. CAD/CAM • Computer-Aided Design (CAD) -- The use of computers in the design of products. • Computer-Aided Manufacturing (CAM) -- The use of computers in the manufacturing of products.

5. Flexible Manufacturing • Flexible Manufacturing -- Designing machines to do multiple tasks so they can produce a variety of products. • Sample videos – FMS/CNC (first 70 seconds)

6. Lean Manufacturing • Lean Manufacturing -- Using less of everything than in mass production. • Compared to others, lean companies: • Take half the human effort. • Have half the defects in finished products. • Require one-third the engineering effort. • Use half the floor space. • Carry 90% less inventory.

7. Mass Customization • Mass Customization -- Tailoring products to meet the needs of a large number of individual customers. • More manufacturers are learning to customize. • Mass customization exists in the service sector too. • Nike ID (1:30)

8. OPERATIONS MANAGEMENT • Operations Management -- A specialized area in management that converts or transforms resources into goods and services. Broader than production management, which usually refers to just manufacturing operations. • Operations management includes: • Inventory management • Quality control • Production scheduling • Follow-up services

9. Operations Management • Operations management planning helps solve problems like: • Facility location • Facility • Materials requirement planning • Purchasing • Inventory control • Quality control

11. OM Tools • PERT • Gantt Charts

12. PERT • Program Evaluation and Review Technique (PERT) -- A method for analyzing the tasks involved in completing a given project and estimating the time needed.

13. Steps Involved in PERT • Analyzing and sequencing tasks • Estimating the time needed to complete each task • Drawing a PERT network illustrating the first two steps • Identifying the critical path • Critical Path -- The sequence of tasks that takes the longest time to complete. Any delay here delays the overall completion time…

14. PERT Chart for Music Video

15. Gantt Charts • Gantt Chart – A bar graph that shows what projects are being worked on and how much has been completed.

16. GANTT CHART for a DOLL FACTORY (at end of week 3)

17. MRP and ERP • Materials Requirement Planning (MRP) -- A computer-based operations management system that uses sales forecasts to make sure parts and materials are available when needed. • Enterprise Resource Planning (ERP) -- A newer version of MRP, combines computerized functions into a single integrated software program using a single database. (includes operational and financial info)

18. Purchasing • Purchasing -- The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for goods and services.

19. Inventory Management • Just-in-Time (JIT) Inventory Control -- The production process in which a minimum of inventory is kept and parts, supplies and other needs are delivered just in time to go on the assembly line. • To work effectively, the process requires excellent coordination with suppliers.

20. Quality Control • Quality -- Consistently producing what the customer wants while reducing errors before and after delivery. • Six Sigma Quality -- A quality measure that allows only 3.4 defects per million opportunities.

21. Quality of Performance, aka Quality of Design • The quality of the materials, features, skill level, etc. that goes into a product. • There is a direct relationship between costs and quality of performance. • Example – McDonald’s vs. Le Bec Fin

22. Quality of Conformance • When the overwhelming majority of products produced conform to design specifications and are free from defects. • There is an indirect (inverse) relationship between costs and quality of conformance. • Example – when you go to Chipotle, whether in Ardmore or Santa Barbara, you are confident that your vegetarian burrito will be the same in both places.

23. Costs of Quality • Measures the costs associated poor quality; the goal is to minimize the total costs of quality as a percentage of sales • There are four categories of quality costs: • Prevention • Appraisal • Internal failure • External failure • There are tradeoffs between these categories

24. MANUFACTURING in the U.S. • From 2001 to 2009, manufacturing output in the U.S. rose 4% each year. • The U.S. is still the world’s leading manufacturer. • Almost 25% of all goods produced each year come from the U.S.

25. Human Resource Management

26. HRM • Human Resource Management -- The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals. • HRM’s role has grown because: • Increased recognition of employees as a resource. • Changes in law that rewrote old workplace practices.

27. Minding the Law in HR • Employers must know the law and act accordingly. • Legislation affects all areas of HRM. • Court cases highlight that sometimes it’s proper to go beyond providing equal rights. • Changes in law and legislation occur regularly.

28. The HR Planning Process • Preparing a human resource inventory of employees. • Preparing a job analysis. • Assessing future human resource demand. • Assessing future labor supply. • Establishing a strategic plan.

29. HR Activities • Recruitment -- The set of activities for obtaining the right number of qualified people at the right time. • Selection -- The process of gathering information and deciding who should be hired, under legal guidelines, to fit the needs of the organization and individuals. • Training (short-term skills) and Development (long-term abilities)-- All attempts to improve productivity by increasing an employee’s ability to perform. • Performance Appraisal -- An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.

30. Developing Effective Managers • Management Development -- The process of training and educating employees to become good managers and tracking the progress of their skills over time. • Management training includes: • On-the-job coaching • Understudy positions • Job rotation • Off-the-job courses and training • GE’s FMP program

31. Using Networks and Mentors • Networking -- Establishing and maintaining contacts with key managers in and out of the organization and using those contacts to develop relationships. • Mentors --Managers who supervise, coach and guide selected lower-level employees by acting as corporate sponsors. • Networking and mentoring go beyond the work environment. • When Jack Welch (former chairman of GE) gave a guest lecture at MIT's Sloan School of Management in 2005, someone in the crowd asked, "What should we be learning in business school?" Welch's reply: "Just concentrate on networking. Everything else you need to know, you can learn on the job." - The trouble with MBAs - www.fortune.com, April 23, 2007

32. Six Steps of Performance Appraisal • Establishing performance standards that are understandable, measurable and reasonable. • Clearly communicating those standards. • Evaluating performance against the standards. • Discussing the results with employees. • Taking corrective action. • Using the results to make decisions.

33. Compensation Programs • A managed and competitive compensation program helps: • Attract the kinds of employees the business needs. • Build employee incentive to work efficiently and productively. • Keep valued employees from going to competitors or starting their own firm. • Maintain a competitive market position by keeping costs low due to high productivity from a satisfied workforce. • Provide employee financial security through wages and fringe benefits.

34. Fringe Benefits • Fringe Benefits -- Sick leave, vacation pay, pension and health plans that provide additional compensation to employees beyond base wages. • In 1929, Fringe benefits accounted for less than 2% of payroll cost. Today it’s about 30%. • Healthcare has been the most significant increase in fringe benefit cost.

35. LET’S GO to the BEACH!Average Vacation Days by Country

36. Management Information Systems • Focuses on the Design & Development of Systems; How to Link Users to Application Software & Other Technologies (like Multimedia); How to Solve Business Problems With Computing & Communications Technology …

37. MIS • Is “Applied Computer Science” • Bridges the Gap Between Theory & Practice • Focuses on the Users of Technology • Is Close to Business Models & Processes • Enables New Business Models – Like eBusiness • Assumes Technology + Management …

38. Business Processes • Managers now think in terms of business process - a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer • Take the customer’s perspective

40. ERP Systems • Software to allow all business areas to be integrated -- finance, sales, production, etc. • Interactive and real-time processing • Users interact with computer screen, not printed data • Major advantage: access to common data across business functions -- eliminated redundant data and communications lags • SAP is a leader in ERP software

42. Contemporary Issues in Technology • HR managers need to recruit workers who are tech savvy and can train others. • Technology makes telecommuting available to almost all companies. • Information Overload • Is Technology Good or Bad? Yes.

43. New HOW DO YOU ORGANIZE DATA GLUT? • A data warehouse stores data on a single subject for a firm over a specific period. eBay • Petabyte or about 6500 Villanova student laptops • Data mining is a technique for looking for hidden patterns and previously unknown relationships among the data. Beer and diapers

44. New Beyond the Internet • Intranet -- A companywide network closed to public access that uses Internet-type technology. Novasis • Extranet -- A semiprivate network that lets more than one company access the same information or allows people on different servers to collaborate. May use leased lines – expensive…

45. New Computer Networks • Network Computing System -- Computer systems that allow personal computers to obtain needed information from databases on a server. • Networks connect people to people and data to save time and money, provide links and let employees see complete information. • Thin Client

46. Cloud Computing • Cloud Computing -- A form of virtualization which stores a company’s data and applications at off-site data centers accessed over the Internet (the cloud). Google Docs, MozyBusiness Week

47. Social Networking and Web 2.0 • Millions have developed online profiles on social networking sites like Facebook and MySpace??. • Web 2.0 -- The set of tools that allow people to build social and business connections, share information and collaborate on projects online. • YouTube, Facebook, Wikipedia, and Twitter are among the largest Web 2.0 companies. • Tomorrow – It’s Friday! • Steve Jobs graduation speech