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CHAPTER 9: MANAGING SERVICE AND MANAGEMENT OPERATIONS

CHAPTER 9: MANAGING SERVICE AND MANAGEMENT OPERATIONS. Chapter 9 Production and Operations Management. Goya Foods : Quality Operations and Products. Goya Foods offers a wide range of products. As their product lines have expanded, management of operations has become a major priority.

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CHAPTER 9: MANAGING SERVICE AND MANAGEMENT OPERATIONS

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  1. CHAPTER 9: MANAGING SERVICE AND MANAGEMENT OPERATIONS

  2. Chapter 9 Production and Operations Management

  3. Goya Foods: Quality Operations and Products Goya Foods offers a wide range of products. As their product lines have expanded, management of operations has become a major priority.

  4. Importance of Production & Operations Management Operations Management The planning and designing of the processes that transform resources into finished products; managing the transformation process; ensuring high quality of finished goods.

  5. Operations Management Operations Management (OM) Development and administration of the activities involved in transforming resources into goods and services.

  6. Operations Management Operations Management (OM) Historically called production or manufacturing Change to operations = focus on goods & services Emphasis on viewing the operations function as a whole

  7. Production & Operations Management Manufacturing – activities and processes used in making tangible products (production) Production – activities and processes used in making tangible products (manufacturing) Operations – the activities and processes used in making both tangible and intangible products

  8. Production & Operations Management Transformation Process of operations management

  9. Transformation Process Inputs – Labor Money Materials Energy Outputs Goods Services ideas

  10. Production & Operations Management Inputs, outputs, and transformation processes Manufacturing Oak Furniture

  11. Operations Management OM in Service Businesses Service Businesses – Airlines Colleges Nonprofit organizations

  12. Operations Management OM in Service Businesses Service Businesses – 70% of all employment in the United States; fastest growth of jobs

  13. Operations Management OM in Service Businesses Service Businesses – actions that are directed toward consumers who use them

  14. Operations Management OM in Service Businesses Ideal Service Business - Customer contact High-tech High-touch

  15. Operations Management OM in Service Businesses Service Business Output Intangible Perishable Difficult to gauge demand

  16. Operations Management Differences in Nature & Consumption of Output (Manufacturing vs. Service Providers) Nature and consumption of output Uniformity of inputs Uniformity of outputs Labor required Measurement of productivity

  17. Planning & Designing Operations Systems Planning the Product Determine – What consumers want Design product to satisfy the want Marketing research

  18. Planning & Designing Operations Systems Planning the Product Determine – Types and quantities of raw materials Skills & quantity of labor Processes for transformation to outputs

  19. Designing the Operations Processes Standardization – the making of identical interchangeable components or products. Faster, reduces production costs Televisions Ballpoint pens Tortilla chips

  20. Designing the Operations Processes Modular Design – creation of an item in self-contained units that can be combined or interchanged to create different products Personal computers -- CPU’s, motherboards, monitors

  21. Designing the Operations Processes Customization – making products to meet a particular customer’s needs or wants Repair services Photocopy services Custom artwork Bridges Ships Computer software

  22. Designing the Operations Processes Mass Customization – making products to meet needs or wants of a large number of individual customers. Customer selects Model, size, color, style, design Dell Computer Fitness program Travel packages

  23. Planning Capacity Capacity – maximum load that an organizational unit can carry or operate Hershey’s production capacity 33 million Hershey’s kisses per day 12 billion per year

  24. Planning Facilities Facility location Facility layout Technology

  25. Planning Facilities • Facility layout • Fixed-Position Layout • Project Organization • Process Layout (intermittent organizations) • Product Layout (continuous manufacturing organization)

  26. Planning Facilities Fixed-Position Layout--Project organization All resources needed for a product are brought to a central location. Process Layout--Intermittent organization Layout is organized into departments that group related processes. Product Layout--Continuous manufacturing organization Production is broken down into relatively simple tasks assigned to workers positioned along a line.

  27. Planning Facilities -- Technology Computer-assisted design (CAD) – design of components, products, and processes utilizing computers instead of paper & pencil Computer-assisted manufacturing (CAM) – manufacturing that employs specialized computer systems to actually guide and control the transformation processes.

  28. Planning Facilities -- Technology Flexible manufacturing – the direction of machinery by computers to adapt to different versions of similar operations Computer-integrated manufacturing (CIM) – a complete system that designs products, manages machines and materials, and controls the operations function.

  29. Facilities Planning Robotics Industries Association – Estimate – 160,000 robots at work in U.S. factories – Japan #1 employer of robotics

  30. Green Manufacturing • It pays to go green • The affluent use green products as status symbols • Smart Car’s US sales are soaring, as it has the highest mgp of any gas-powered car on the market • 95% of Smart Car buyers opt for deluxe versions over the base model

  31. Managing the Supply Chain Supply chain management Connecting and integrating all parties or members of the distribution system in order to satisfy customers.

  32. Managing the Supply Chain Purchasing Procurement – buying of all materials needed by the organization. Desired quality Correct quantities Lowest cost

  33. Managing the Supply Chain Managing Inventory Inventory – all raw materials, components, completed or partially completed products, and pieces of equipment that a firm uses

  34. Managing the Supply Chain Managing Inventory Inventory control – process of determining how many supplies and goods are needed and keeping track of quantities on hand, where each item is, and who is responsible for it.

  35. Managing the Supply Chain EOQ model Economic order quantity model – a model that identifies the optimum number of items to order to minimize the costs for managing them (ordering storing, and using).

  36. Managing the Supply Chain JIT Just-in-Time inventory management – eliminates waste by using smaller quantities arriving “just in time” for use in the transformation process.

  37. Managing the Supply Chain MRP Material-requirements planning – planning system that schedules the precise quantity of materials needed to make the product.

  38. Managing the Supply Chain Outsourcing Outsource aspects of operations to companies that provide products more efficiently, at lower cost, greater customer satisfaction.

  39. Managing the Supply Chain Routing – sequence of operations through which the product must pass Scheduling – the assignment of required tasks to departments or specific machines, workers, or teams.

  40. Managing Quality Quality – critical element of operations management. Degree to which a good or service meets the demands and requirements of customers.

  41. Managing Quality Hypothetical PERT Diagram for a McDonald’s Big Mac

  42. Managing Quality Quality complaints from Air Travelers -- 2007

  43. Managing Quality Malcolm Baldrige National Quality Award Criteria -- Leadership Information and analysis Strategic planning Human resource development Process management Business results Customer focus & satisfaction

  44. Managing Quality Quality Control – processes an organization uses to maintain its established quality standards. Total Quality Management (TQM) – philosophy that uniform commitment to quality will promote a culture that meets customers’ perceptions of quality.

  45. Managing Quality Statistical process control – system to collect and analyze information about production processed to pinpoint quality problems in the system. ISO 9000 – International Organization for Standardization (ISO) system of quality management standards designed to ensure the customer’s quality standards are met.

  46. Managing Quality Inspection – reveals whether a product meets quality standards. Sampling – how many items should be inspected. Depends on potential costs of product flaws in terms of human lives and safety.

  47. Communications in Organizations Informal Communication – separate from management’s formal, official communication channels. Grapevine

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