Date post: | 08-Dec-2014 |
Category: |
Documents |
Upload: | vanga-srinivas-reddy |
View: | 36 times |
Download: | 2 times |
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Operations ManagementOperations Management Systematic direction, control, and evaluation of
the entire range of processes that transform inputs into finished goods or services.
Environmental factors-culture, political, and market influences
Inputs-HR, capital, materials, land, energy, information, customer
Transformations-convert inputs into outputs
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
O.M. (cont)O.M. (cont) Outputs-goods or services, and waste Customer Contact-customers actively
participate in transformation processes, self-service
Performance Feedback-repair records, customer comments
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Operations ManagementOperations ManagementOperations ManagementOperations Management
Refers to the management of the production system that transforms inputs into finished goods and services.
Production system: the way a firm acquires inputs then converts and disposes outputs.
Operations managers: responsible for the transformation process from inputs to outputs.
Operations management seeks to increase the quality, efficiency, and responsiveness of the firm.
Seeks to provide a competitive advantage.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Operations Management ConceptsOperations Management ConceptsOperations Management ConceptsOperations Management Concepts Quality: goods and services that are reliable and
perform correctly. Quality allows customers to receive the performance that they
expect.
Efficiency: the amount of input to produce a given output.
Less input required lowers cost and waste.
Responsiveness to customers: actions taken to respond to customer needs.
Firm can react quickly and correctly to customer needs as they arise.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Differences Between Services and Differences Between Services and GoodsGoods Information Asymmetry Intangible Inventory Customer Contact Response Time Labor Intensity
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Typical Characteristics of Services and Goods ProducersTypical Characteristics of Services and Goods Producers
Adapted from Table 21.1
Primarily Service Primarily Service ProducersProducers
Primarily Primarily GoodsGoodsProducersProducers
Continuum of Continuum of CharacteristicsCharacteristics
Intangible, nondurable
Output can’t be inventoried
High customer contact
Short response time
Labor intensive
Tangible, durable
Output can be inventoried
Low customer contact
Long response time
Capital intensive
MixedMixed
21.3
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Positioning Strategies-approach Positioning Strategies-approach selected for transformational selected for transformational processesprocesses Process Focus-layout of
plant and equipment around each production unit custom made Low Volume Norwegian Ship Building
Product Focus-arranging plant and equipment around one or a few output types
many of one product high-volume, highly
automated low flexibility Factory Lines
Intermediate Strategy-plant and equipment layout reflects some of both strategies batches of products Kinkos, Ball Homes
Agile Strategy-mass customization
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
FlexibilityFlexibility Product Flexibility-speed with which products
are created, ability to customize, ability to modify products for special needs
Volume Flexibility-ability to respond to sudden changes in demand, change from small to full scale
Process Flexibility-ability to manufacture a variety of goods in a short time, adjust to product mix over time, ability to accommodate changes in raw materials
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Core Positioning StrategiesCore Positioning Strategies
Adapted from Figure 21.2
Sources: Adapted from Brown, H.K., Clark, K.B., Holloway, C.A., and Wheelwright, S.C. The Perpetual Enterprise Machine: Seven Keys to Corporate Renewal Through Successful Product and Process Development. New York: Oxford University Press, 1994; Upton, D.M. “The management of manufacturing flexibility.” California Management Review, Winter 1994, 72–89.
Process focus
Space shuttleLegal practice
Product focus
Auto assembly plant
Mail processingIntermediate
Garment
industryBranch banks
Product volumeProduct volume
Custom products,low volume
Standard products,high volume
Mixture of custom and standard products, moderate volume
Continuous process(stable)
Re
so
urc
e f
low
sR
es
ou
rce
flo
ws
Massproduction
Largebatch
Sporadic(unstable)
21.5
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Improving Responsiveness to CustomersImproving Responsiveness to CustomersImproving Responsiveness to CustomersImproving Responsiveness to Customers Without customers, organizations cease to exist.
Non-profit and for-profit firms all have customers. Managers need to identify who the customer is and their
needs.
What do customers want? Usually customers prefer: A lower price to a higher price. High quality over low quality. Fast service over slow service.
Also good after sale support. Many features over few features. Products tailored to their specific needs.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Quality-how well a product does Quality-how well a product does what the customer expectswhat the customer expects Internal View-within the organization
External View-value customers expect
Value-the relationship between quality and price
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Competitiveness Value MapCompetitiveness Value Map
Relative QualityRelative QualitySuperiorInferior
Higher
Lower
Poorvalue
Adapted from Figure 21.3
Rel
ativ
e P
rice
Rel
ativ
e P
rice
Economyvalue Outstanding
value
Premiumvalue
Averagevalue
Source: Adapted from Gale, B.T., and Buzzell, R.D. “Market perceived quality: Key strategic concept.” Planning Review, March-April, 1989, 10.
21.7
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Price Price v.v. Attributes AttributesPrice Price v.v. Attributes Attributes
Firms offering high quality, fast service and other customer desires, often must raise price.
Customers must tradeoff price for attributes.
Operations management tries to push the price/attribute curve to the right with better production. Provides more attributes at the same cost.
By enhancing the price/attribute relationship, the firm can increase its competitive position.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Customer Responsive Production SystemsCustomer Responsive Production SystemsCustomer Responsive Production SystemsCustomer Responsive Production Systems
An output’s attributes is determined by the production system.
Firms must strike a balance between cost and attributes
Improving Quality: can apply to firms producing goods and services.
A firm that provides higher quality than others at the same price is more responsive to customers.
Higher quality can also lead to better efficiency. Lowers waste levels and operating costs.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Total Quality ManagementTotal Quality Management The continuous process of ensuring every
aspect of production builds in product quality Traditional Quality-product inspection during or
at the end of the transformation process
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Total Versus Traditional QualityTotal Versus Traditional Quality
Adapted from Table 21.3
Quality is a strategic issue
Plan for quality
Quality is everybody’s responsibility
Strive for zero defects Quality means conformance to
requirements that meet or exceed customers’ expectations
Scrap and reworking are only a small part of the costs of nonconformance
Traditional Quality ControlTraditional Quality ControlTotal Quality ManagementTotal Quality Management
Quality is a tactical issue
Screen for quality
Quality is the responsibility of the
quality control department
Some mistakes are inevitable Quality means inspection
Scrap and reworking are the major costs of poor quality
21.11
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Improving EfficiencyImproving EfficiencyImproving EfficiencyImproving Efficiency Labor productivity allows labor comparisons between
organizations. Improved efficiency leads to lower costs and better
performance.
TQM and Efficiency: TQM can lead to much higher labor productivity.
When quality rises, less time is wasted on scrap.
Flexible manufacturing and efficiency: reduces the set-up costs for production systems.
Facilities layout: seeks to design the machine-worker interface to increase production efficiency.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Efficient ManufacturingEfficient ManufacturingEfficient ManufacturingEfficient Manufacturing Most firms face major expense when setting up to
produce a product. These costs must be paid before production begins.
The more often products to be built change, the higher setup costs become.
Flexible Manufacturing reduces setup costs.
Just-in-Time (JIT) inventory, while developed for TQM, also adds to efficient production.
Many costs are reduced including warehousing, holding costs and inventory tracking.
Firm does not have a supply of parts, but can be vulnerable to strikes or supply problems.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Efficient ManufacturingEfficient ManufacturingEfficient ManufacturingEfficient Manufacturing Self-managed teams boost efficiency by allowing for a
flatter organization structure. The team takes the role of the supervisor. Teams working together often become very skilled at enhancing
productivity.
Kaizen: Japanese term for a management philosophy the stresses the need for continuous improvement.
Better operations can come from many, small, continuous improvements.
Focus on what adds value to the product and try to eliminate steps that do not add value (such as inspection for defects).
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
ReengineeringReengineeringReengineeringReengineering Process Reengineering: the fundamental rethinking
and radical redesign of the business process. Can boost efficiency by directing efforts to activities that add
value to the good or service produced. While Kaizen focuses on continuous enhancements, process
reengineering considers wholesale change.
Top managers must support operations enhancement tools for them to be accepted by workers.
Usually, a successful operations change means a complete change in the organizational culture.
Without a supporting culture, change will not succeed.
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Nine Categories of Operations Management DecisionsNine Categories of Operations Management Decisions
Product plans Competitive Priorities Positioning Strategies Location Technological Choices Quality management and control Inventory management and control Materials Management Master production scheduling
21.4
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Inventory CostsInventory Costs What contributes to inventory costs? TOTAL COST = ORDERING + CARRYING
Carrying Costs Warehouse Insurance Obsolescence taxes breakage
Ordering Costs Placing the order Transportation Shortage
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Inventory TermsInventory Terms Lead Time
Elapsed time between placing and receiving an order
EOQ-economic order cost optimum order quantity yielding the lowest total
inventory cost
Just-in-time finished goods to sell sub assemblies to be assembled purchases of raw materials to be transformed
Hellriegel, Jackson, and SlocumMANAGEMENT, 8ESouth-Western College PublishingCopyright © 1999
PPT
Quantity (Q)Quantity (Q)
HighHigh
LowLow
Ave
rag
e an
nu
al c
ost
($)
Ave
rag
e an
nu
al c
ost
($) Total cost
Carrying cost
Order cost
SmallSmall LargeLargeQ1
Adapted from Figure 21.5
Cost Trade-Offs in Determining Inventory Levels Cost Trade-Offs in Determining Inventory Levels
21.13