1 / 16

1 Operations Strategy Class 1a: Introduction to OM Class 1b: Strategic Operational Audits

Operations Management & Performance Modeling. 1 Operations Strategy Class 1a: Introduction to OM Class 1b: Strategic Operational Audits 2 Process Analysis Class 2a + 2b: Process Flow Analysis CRU Computer Rentals presentation Detailed Capacity Analysis: Kristen’s Cookies

wiley
Download Presentation

1 Operations Strategy Class 1a: Introduction to OM Class 1b: Strategic Operational Audits

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Operations Management & Performance Modeling 1 OperationsStrategy • Class 1a: Introduction to OM • Class 1b: Strategic Operational Audits 2 Process Analysis • Class 2a + 2b: Process Flow Analysis • CRU Computer Rentals presentation • Detailed Capacity Analysis: Kristen’s Cookies • Key levers for improving process capacity and flow time 3 Lean Operations • Supply Chain Management • Capacity Management in Services 6 Total Quality Management 7 Business Process Reengineering OM&PM/Class 2b

  2. CRU Computer Rentals: Revenue and Cost Drivers Status 40 Ship Receiving Repairs 30% 70% R Status 24 15% Parts places order Receives from Supplier Customer Ic Pre-Config Status 41 R2 R1 Status 32 Ship Config Repairs Status 20 Status 42 OM&PM/Class 2b

  3. Take Order Wash & Mix Load & Set Timer Bake Spoon You You Roommate, Oven Oven 1 min / doz 2min / doz 9 min/doz 6min / 1-3doz Pay Pack Cool Unload Order Ready Roommate Roommate Roommate --- 1 min / order 2 min /doz 5 min Kristen’s Cookies: Flow Chart OM&PM/Class 2b

  4. Process Architecture is defined and represented by a process flow chart: Process = network of activities performed by resources 1. Process Boundaries: • input • output 2. Flow unit: the unit of analysis 3. Network of Activities & Storage/Buffers • activities with activity times • routes: precedence relationships (solid lines) 4. Resources & Allocation 5. Information Structure & flow (dashed lines) OM&PM/Class 2b

  5. Operational Measure: Flow Time Driver: Activity Times • (Theoretical) Flow Time • Critical Activity • Flow Time efficiency OM&PM/Class 2b

  6. Levers for Reducing Flow Time • Decrease the work content of critical activities • work smarter • work faster • do it right the first time • change product mix • Move work content from critical to non-critical activities • to non-critical path or to ``outer loop’’ • Reduce waiting time. OM&PM/Class 2b

  7. Most time inefficiency comes from waiting:E.g.: Flow Times in White Collar Processes OM&PM/Class 2b

  8. Operational Measure: Capacity Drivers: Resource Loads • (Theoretical) Capacity of a Resource • Bottleneck Resource • (Theoretical) Capacity of the Process • Capacity Utilization of a Resource/Process = throughput [units/hr] capacity [units/hr] OM&PM/Class 2b

  9. A Recipe for Capacity Measurements * assuming system is processing at full capacity OM&PM/Class 2b

  10. Demand Capacity [units/time] Process Capacity Resource x NCX-10 Furnaces Marginal Investment Cost [$/unit/time] Cost Capacity Profile OM&PM/Class 2b

  11. Levers for Increasing Process Capacity • Decrease the work content of bottleneck activities • work smarter • work faster • do it right the first time • change product mix • Move work content from bottlenecks to non-bottlenecks • to non-critical resource or to third party • Increase Net Availability • work longer • increase scale (invest) • increase size of load batches • eliminate availability waste OM&PM/Class 2b

  12. Increasing Process Capacity in The Goal • “is to increase the capacity of only the bottlenecks” • “ensure the bottlenecks’ time is not wasted” • increase availability of bottleneck resources • eliminate non-value added work from bottlenecks • reduce/eliminate setups and changeovers • synchronize flows to & from bottleneck • reduce starvation & blockage • “ the load of the bottlenecks (give it to non-bottlenecks)” • move work from bottlenecks to non-bottlenecks • need resource flexibility • unit capacity and/or #of units. • invest OM&PM/Class 2b

  13. Pricing and Capacity Investment: Trays + Rent another oven at $10/hr? • Resource cost = • Material cost = • Minimum sale price = • Contribution margin if sale price is $5 / dozen = OM&PM/Class 2b

  14. Other factors affecting Process Capacity • Batch (Order) Sizes • Product Mix • other managerial policies ... OM&PM/Class 2b

  15. Chocolate Chip and Peanut Butter Data OM&PM/Class 2b

  16. Class 2b Learning Objectives • CRU: manage better with the three key operational measures and an inter-functional macro process view of the organization • Process measures: • Flow time manage critical activities • Capacity  manage bottleneck resources • Levers for improving • Flow time manage critical activities • Capacity & Throughput • Process capacity depends on a zillion things OM&PM/Class 2b

More Related