EM 420 Production and Operations Management

1. EM 420Production and Operations Management Eng. Rodger L. NKUMBWA Dept. of Electrical Engineering Copperbelt University http://www.nkumbwa.weebly.com/

2. What is Operations Management? • OM is the design, operation, and improvement of the systems that create and deliver primary products and services. • It is a field of management, and should not to be confused with operations research, management science, or industrial engineering. • OM is concerned with the management of the entire system. • Decisions fit into three broad areas: • Strategic (long term) • Tactical (intermediate term) • Operational (short term) Eng Nkumbwa @CBU

3. Why Study Operations Management? Eng Nkumbwa @CBU

4. Definitions • Automation is a technology concerned with the application of mechanical, electronic, and computer-based systems to reduce the amount of clerical and manual effort in product design, manufacturing planning and control, and the business functions of the firm. • Computer-aided design (CAD) is the use of computer systems to support the product design functions. • Computer-aided manufacturing (CAM) is the use of computer systems to perform functions related to manufacturing engineering. • CAD/CAM is the integration of CAD and CAM into one. • Computer-integrated manufacturing (CIM) combines CAD/CAM with other business functions. Eng Nkumbwa @CBU

5. Definitions (2) • Flexible Manufacturing System (FMS) is an automated, mid-volume, mid-verity, central computer-controlled manufacturing system • Supply chain management is the term used to describe the management of materials and information across the entire supply chain, from suppliers to component producers to final assemblers to distributors and ultimately to the customers. • Total Quality Management (TQM) is management approach that pursues three main objectives: • achieving customer satisfaction, • continuous improvement, and • encouraging involvement of the entire workforce. Eng Nkumbwa @CBU

6. What are Business Functions? • Business functions are the principal means of communication with the customer. • These functions include: • Design • Marketing • Sales • Forecasting • Cost accounting Eng Nkumbwa @CBU

7. What is a Production System? • A production system uses resources to transform inputs into desired outputs. • Inputs: raw materials, parts, and customers • Resources: labour, equipment, and supplies • Outputs: goods, services, and satisfied customers • Examples of transformation processes: • Physical – manufacturing • Locational – transportation • Exchange – retailing • Storage – warehousing • Physiological – health care • Informational – telecommunications Eng Nkumbwa @CBU

8. Goods versus Services • Services are intangible processes • Location of the service facility and customer interaction are important • Goods are physical outputs of a process • Location of the service facility and customer interaction are not important Eng Nkumbwa @CBU

9. Value-Added Services • Value-added services are qualities of a product or service that make a customer’s life easier. • Commonly grouped into four categories: • Information • Problem solving • Sales support • Field support • Provide two benefits: • Differentiate the organization from the competition. • Build relationships with customers. Eng Nkumbwa @CBU

10. OM in the Organization Chart Eng Nkumbwa @CBU

11. Eng Nkumbwa @CBU

12. Importance of Operations Management • Synergies need to exist with other functional areas of the organization. • Sharing between customer service processes, purchasing, distribution, manufacturing, etc. • Operations account for 60-80% of the direct expenses that burden a firm’s profit. Eng Nkumbwa @CBU

13. Product Design • Product design involves both determinations of which products are to be produced and the detailed design of individual products. • The product design process involves: • Identification of need (some deficiency in machine design, adding more features to existing products, developing new product). • Generation of preliminary ideas with respect to technical choices, materials, etc. • Refinement of the product idea. • Analysis of best designs from point of view of cost, functional requirements, manufacturability, etc. • Selection of the best design. • Creation of a detailed design that provides detailed specifications with respect to materials, tolerance, etc. Eng Nkumbwa @CBU

14. Manufacturing Planning • Process planning • determining the sequence of individual processing and assembly operations needed to produce the product. • Master scheduling • a listing of the products to be made, when they are to be delivered, and in what quantities. • Requirements planning • ensures that all required material and parts are available when needed. • Capacity planning • ensures that the factory is capable of producing what is required by its given number of machines and manpower. Eng Nkumbwa @CBU

15. Manufacturing Control • Concerned with managing and controlling physical operations to implement manufacturing plans. • Shop floor control • deals with the problem of monitoring the progress of the product as it is being processed, assembled, moved, and inspected. • Inventory control • is concerned with striking a balance between having too little inventory (with possible material stock-outs) and the carrying costs of too much inventory. • Quality control • ensures that the quality of the product meets the standards specified by the product design (and customer expectations. Eng Nkumbwa @CBU

16. Business Strategies and Product Life Cycle • Introduction • Research and product development • Process modification • Supplier development • Acceptance and growth • Forecasting • Manufacturing capacity • Maturity • Production innovation • Cost control • Decline • Reduction and phase-out • Transition to new products Eng Nkumbwa @CBU

17. Product Life Cycle Eng Nkumbwa @CBU

18. Business Strategies and Product Life Cycles 2.. • First-to-market • Strong applied research is needed. • Set high prices to achieve large short term-profits (focus only on the introduction and acceptance phases and then license production), or • set a lower initial price to secure a high market share. • Second-to-market • Imitate successful outputs offered by first-to-market organizations. • Learn from their mistakes and offer improved or enhanced versions of the original products. • Late-to-market (or cost minimization) • Wait until a product becomes fairly standardized and is demanded in large volume. • Attempt to compete on the basis of costs. • Strong production systems research is needed. Eng Nkumbwa @CBU

19. Significant Operations Management Concepts • Just-in-time (JIT) Production • Total Quality Control (TQC) • Manufacturing Strategy • Total Quality Management (TQM) and Quality Certification • Business Process Reengineering • Supply Chain Management Eng Nkumbwa @CBU

20. Current Issues in Operations Management • Coordinate the relationships between mutually supportive but separate organizations. • Optimizing global supplier, production, and distribution networks. • Increased co-production of goods and services. • Managing the customers experience during the service encounter. • Raising the awareness of operations as a significant competitive weapon. Eng Nkumbwa @CBU

21. Trends in Business • Recent Trends • Internet and e-business • Supply chain management • Continuing Trends • Quality and process improvement • Technology integration • Globalization • Environmental issues • Time-based competition Eng Nkumbwa @CBU

22. Strategic Management Issues • Strategic Management Thinking • The Strategic Management Process • Customer Analysis • Competitor Analysis • Strategy Formulation • Execution of Manufacturing strategy Eng Nkumbwa @CBU

23. Wrap up… • “Plans are nothing, planning is everything.”Dwight D. Eisenhower Eng Nkumbwa @CBU

24. Eng Nkumbwa @CBU