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Fundamentals of Operations Management BUS 3 – 140 Process Layout, Work System Design, and Supply Chain Management Nov

Fundamentals of Operations Management BUS 3 – 140 Process Layout, Work System Design, and Supply Chain Management Nov 2, 2011. Process Alternatives and Selection. Facilities and Equipment. Capacity Planning. Forecasting. Layout. Product and Service Design. Process Selection. Work Design.

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Fundamentals of Operations Management BUS 3 – 140 Process Layout, Work System Design, and Supply Chain Management Nov

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  1. Fundamentals ofOperations ManagementBUS 3 – 140Process Layout, Work System Design, and Supply Chain ManagementNov 2, 2011

  2. Process Alternatives and Selection

  3. Facilities andEquipment CapacityPlanning Forecasting Layout Product andService Design ProcessSelection WorkDesign TechnologicalChange Inputs and Outputs when Selecting a Process OUTPUTS INPUTS Capacity planning is focused on How Many (Quantity) that will be produced. Process planning is focused on HOW the items will be produced * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  4. Key Elements of Process Strategy • Capital Intensity (does the output come more from machines or more from human labor?) • Process flexibility required • Technology • Likelihood of Changes • Product Design • Volumes • Technology

  5. Uses of Technology and Automation Three (3) basic kinds of technology • Product or service innovation (Cell Phones, Computers, etc..) • Process technology (increasing quality and productivity, lowering costs) • Information Technology (speed, data storage and retrieval, complex and high-volume processing, process support)

  6. Process Types Table 6.1 * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  7. Key Characteristics of different Process Types Table 6.2 * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  8. Work System Design

  9. Considerations in Work System Design • Observe actual performance and then establish a BASIS for any estimates • Sandwiches made per hour • Sales closed per quarter • Design changes per model • Other • Be careful to distinguish between “busy” and “valuable” • Track your own output and trends and see how you can improve your individual performance • Watch your boss

  10. Supply Chain Management

  11. Operations is a Key Element of a Supply Chain Revenue Utilization of Assets (People, Plant, Equip) Cash Inventory BALANCING keeping Customers completely satisfied and Resources optimally utilized ……. against spending the least amount of Cash and carrying the least amount of Inventory

  12. Supply Chain Scope (this course shaded) Customer Service Customer Demand Production Scheduling Production Materials Mgmt Shipping • Process Layout • Work System Design • Lean Operations • Quality • Inventory Mgmt • MRP • ERP • Forecasting • Aggregate Planning • Strategic Capacity Planning • Demand & Supply Matching • Scheduling • Just In Time (JIT) • Project Mgmt

  13. Supply Chain Challenges • Barriers to integration of organizations • Top management support • Dealing with trade-offs • Small businesses • Variability and uncertainty • Long lead times

  14. Example of Supply Chain Strategy MAXIMIZE CUSTOMER SATISFACTION • Assured Supply and best value • Accurate and timely exchange of demand and supply data • Shared savings from continuous improvement • Other • Other MAXIMIZE PROFITABLE REVENUE MINIMIZE TOTAL COST • Optimal Inventory • Company owned • Supplier owned • Customer owned • Optimal headcount • Manufacturing • Support • Worldwide indirect • Lean optimization for entire Supply Chain • Optimized Supply Chain Network (including integrating Mergers & Acquisitions) • Automation whenever possible and supported by business case • Responsiveness to Market opportunities • Speed to react • Credibility of commits • Assurance of delivery • Optimum utilization of resources • Manufacturing • Product life cycle • Suppliers • Transportation and Logistics • Scalability for growth and increased complexity • Secure collaboration and visibilityamong customers, suppliers, and the enterprise

  15. The Increasing Emphasis on Supply Chain Management Several factors are driving this trend: • Improve operations • Opportunities and Risks of outsourcing • Rising transportation costs • Competitive pressures • Globalization • e-commerce • Complexity of supply chains • Manage inventories Supply Chain Management is not simply a cost / efficiency discipline. It is a key differentiator in gaining customer satisfaction, market share and loyalty

  16. Benefits of Supply Chain Management * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  17. Benefits of Supply Chain Management • Lower inventories • Higher productivity • Greater agility • Shorter lead times • Higher profits • Greater customer loyalty • Integrates separate organizations into a cohesive operating system Monitoring Inventory is CRITICAL at virtually every step in the Chain * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  18. Selected Supply Chain Metrics Table 11.4 * From Stevenson, Operations Management, Ninth Edition, McGraw Hill Irwin

  19. Logistics Logistics * The management of inventory at motion and at rest Logistics – from the Council of Logistics Management (CLM) That part of the supply chain that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements Transportation The movement of goods from the point of origin to the point of consumption: a subset of the overall Logistics process * Leenders, Johnson, Flynn, and Fearon, Purchasing and Supply Management, Thirteenth Edition, McGraw Hill Irwin

  20. Services provided by Third Party Logistics providers (3PL) • Economies of Scale • Professional focus and expertise • Warehousing • Outbound and Inbound transportation • Freight bill auditing and payment • Freight consolidation • Distribution • Order Fulfillment • Cross-docking • Packaging • Returns Major Carriers enable their customers to focus on core competencies, while the carrier drives efficiencies and increased services in transportation and logistics

  21. Reverse Logistics The backward flow of goods returned to the supply chain • Processing returned goods • Sorting, examining/testing, restocking, repairing • Reconditioning, recycling, disposing • Gatekeeping • Providing Return Material Authorization (RMA) • screening goods to prevent incorrect acceptance of goods • Avoidance • finding ways to minimize the number of items that are returned Good career opportunity for an entry level job

  22. Example of Reverse Logistics Damaged Units Refurbished Product sent to Distribution Center(s) Refurbished Product shipped From FGI at DC Customer Returns Damaged Product Product Received at Local Service Center Product Collected and Forwarded to Repair Center Product Repaired to Refurbished Status Repaired Units

  23. Expansion of MRP principles to plan and coordinate: Transportation Warehousing Regional allocations Equipment Financial flows Distribution Requirements Planning (DRP) The right amount of inventory, at the right place, at the right time

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