Chapter 20
U.S. is more productive country in the world
high standard of living
eight dimensions of quality
performance, features, reliability, conformance, durability, serviceability, aesthetics, perceived quality
why is operations management at the core of what organizations do?
they add value and create products and services
features
§ Supplements to a product's basic functioning characteristics, such as power windows on a car
conformance
§ The degree to which a product's design and operating characteristics meet established standards
serviceability
§ The speed and ease of repair
aggregate productivity
§ Total level of productivity achieved by a country § Business or individual or industry or country
industry productivity
§ Total productivity achieved by all firms in a particular industry
capacity
§ how much of products, services, or both that can be produced by the organization § Demand based § An organization that builds capacity exceeding its needs may commit resources that will never be recovered
work in progress
· Made up of partially completed products that need further processing · Controlled by the shop-floor system
Operations management
· Managerial activities that are anywhere in the line of turning inputs into products and services
facility layout
· Physical configuration of facilities, the arrangement of equipment within facilities, or both
facility location
· Physical positioning or geographic site of facilities and must be determined by the needs and requirements of the organization · Near customers? Railroad? Airport? Train?
supply chain management
· Process of managing operations control, resource acquisition, and inventory to improve overall efficiency and effectiveness
raw materials
· Provide the materials needed to make the product · Controlled by purchasing models and systems
finished goods
· Under the control of the overall production scheduling system · Controlled by high-level production scheduling systems in conjunction with marketing
why dont you want large amounts of inventory?
its cash sitting doing noting
productivity
o An economic measure of efficiency that summarizes the value of outputs relative to the value of the inputs used to create them o Assessed at different levels of analysis and in different forms
purchasing management
o Concerned with buying the materials and resources needed to create products and services o Also called procurement o Purchasing is at the heart of effective supply chain management
purpose of work in process
o Enable overall production to be divided into stages of manageable size
inventory control
o Essential for effective operations management
just in time method
o Necessary materials arriving as soon as they are needed (just in time) so that the production process is not interrupted
importance of productivity
o Primary determinant of an organization's level of profitability and ultimately of its ability to survive o Partially determines people's standard of living within a particular country
purpose of finished goods
o Provide ready supply of products on customer demand and enable long, efficient production runs
goal of operations system
o To control transformation processes to ensure that relevant goals are achieved in such areas as quality and costs
in transit purpose and who it is controlled by
o To distribute products to customers · Controlled by the transportation and distribution systems
quality
o Totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs o Absolute and relative concept
fixed position layout
o Used when the organization is creating a few very large and complex products o building or airplane o airplane remains stationary while the people and machines move around it as it is assembled o Not moving
process layout
o different processes all over a facility o In a hospital, all X-rays are done in one location, all surgeries in another, and all physical therapy in yet another. Patients are moved from location to location to get the services they need
product layout
o goes in order, robots, cars in an assembly line o appropriate when large quantities of a single product are needed o assembly lines o Dell's personal computer factories use a product layout
what are the approaches to facilities layout?
product layout, process layout, and fixed position layout
what are decisions that need to be made when designing operation systems?
product-service mix, capacity, and facilities
what are the four basic kinds of inventory?
raw materials, work in progress, finished goods, and in transit
durability
§ A measure of product life
reliability
§ A probability of not malfunctioning during a specified period
performance
§ A product's primary operating characteristic § Automobile acceleration and a television's picture clarity
perceived quality
§ As seen by a customer
improving operations
§ Firms can spend more on research and development because R&D helps identify new products, new uses for existing products, and new methods for making products. Attempt to increase speed and thus increase productivity
aesthetics
§ How a product looks, feels, tastes, and smells
product-service mix
§ How many and what kinds of products or services (or both) to offer § decision by a manager on what a product should be
increasing employee involvement
§ Individual worker's being given a bigger voice in how she does her job § A formal agreement of cooperation between management and labor § Total involvement throughout the organization § Increasing the flexibility of an organization's workforce by training employees to perform a number of different jobs § Reward employees for learning new skills and using them proficiently
company performance
§ Level of productivity achieved by an individual company
facilities
§ Physical locations where products or services are created, stored, and distributed
unit and individual performance
§ Productivity achieved by a unit or department within an organization and the level of productivity attained by a single person
economically
Creates value and utility of one type or another, depending on the nature of the firm's products or services
efficiency
Efficient and effective management of operations goes a long way toward ensuring competitiveness and overall organizational performance, as well as quality and productivity
GDP
US's productivity is measured in GDP
levels of productivity
aggregate, industry, company, and unit (individual) productivity