OM Prelims part 1

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TRANSFORMATION PROCESSES

(storing, transporting, cutting, etc.)

The degree of standardization and the volume of output of a product or service is influence the way a firm organizes production.

2.Type of Operation

1. Finance 2. Marketing 3. Operations Management

3 Basic Functions

TOTAL QUALITY MANAGEMENT

A never ending quest to improve the quality of goods and services.

LOCATION OF FACILITIES

According to manager's decisions on which cities to provide service for, where to locate maintenance facilities, and where to locate major and minor hubs.

ANALYSIS OF TRADE-OFFS

Advantages and disadvantages or pros and cons)

Marketing

Advertising and pricing decisions are made by marketing people.

Marketing

Also responsible for assessing customer wants and needs, and for communicating those to operations and design people.

Manufacturing and service organizations differ chiefly because manufacturing is goods-oriented and service is act oriented.

Both must make decisions on location, schedule and control operations and allocate resources.

Marketing

Can provide valuable insight on what competitors are doing.

Most for-profit firms obtain the majority of their funds through the revenues generated by sales of goods and services.

Careful planning can help avoid cash-flow problems.

1. Degree of Standardization 2.Type of Operation

DIFFERENTIATING FEATURES OF PRODUCTION SYSTEMS

LONG TERM commitments.

Decisions that usually, but not always, require

Operations Manager have the responsibility to make ethical decisions.

ETHICAL ISSUES IN OPERATIONS MANAGEMENT

TIME REDUCTION

Efforts on reducing the time needed to accomplish various tasks in order to gain a competitive edge.

ESTABLISHING PRIORITIES

Enables the managers to direct their efforts to where they will do the most good to avoid wasting time and energy on insignificant elements.

Worker safety The Community The Environment Quality Product Safety

Ethical issues arise in many aspects of Operations Management including:

ECONOMIC ANALYSIS OF INVESTMENT PROPOSALS

Evaluation of alternative investments in plant and equipment requires inputs from both operations and finance people.

he can provide to those decision makers a wide range of information that will have a bearing on their decisions.

Even though the Operations Manager is not responsible for making all design decisions,

Radios, Televisions, Computers Newspapers, Canned Goods Automobile Tires, Pens and Pencils

Examples of Standardized Goods:

Automatic Car washes Televised Newscasts Taped Lectures Commercial Airline Service

Examples of Standardized Services:

1. BUDGETING 2. ECONOMIC ANALYSIS OF INVESTMENT PROPOSALS 3. PROVISION OF FUNDS

Finance and OM personnel cooperate by exchanging info and expertise in such activities as:

GENERAL APPROACHES TO DECISION MAKING

GENERAL APPROACHES TO DECISION MAKING

Workers must be more skilled, the work moves slower, and the work is less susceptible to mechanism.

In custom systems, on the other hand, each job is sufficiently different.

In many instances, Operations Manager is more involved in day-to-day operating decisions than relating to system design.

In many instances, Operations Manager is more involved in day-to-day operating decisions than relating to system design.

Reducing waste Using less toxic chemicals Recycling Making it easier for consumers to recycle products And designing products and parts that can be reused.

Increasing emphasis on:

Marketing

It consists of selling and promoting the goods/services of an organization.

REENGINEERING

It means starting over, asking why a company does things the way it does, and questioning basic rules and assumptions

PARETO PHENOMENON

It means that all things are not equal; some things will be very important for achieving an objective or solving a problem, and other things will not.

Team Approach Finding and Eliminating Problems Emphasizes on serving the customer And continuously working to improve the system

Key Features of TQM:

CAPACITY PLANNING

Maintain the cash flow and make reasonable profit. (too few or too many planes or even the right number of planes but in the wrong places, will hurt profit

LEAD TIME in order to give customers realistic estimates of how long it will take to fill their orders.

One important piece of information marketing needs from operations is manufacturing or service

The Operations Manager exerts considerable influence over the degree to which the goals and objectives of the organization are realized.

Operations Managers are Planners and Decision Makers........

SUPPLY-CHAIN MANAGEMENT

Organizations are increasing their attention to managing the supply chain from suppliers and buyers of raw materials all the way to final customers.

ENVIRONMENTAL ISSUES

Pollution control and waste disposal are key issues managers must contend with.

PERT (Program Evaluation and Review technique) CPM (Critical Path Method)

Project Models

Linear Programming Queuing Techniques Inventory Models Project Models Forecasting Technique Statistical Models ANALYSIS OF TRADE-OFFS SYSTEM APPROACH

QUANTITATIVE APPROACHES

DOWNSIZING

Squeezing by competition, lagging productivity, and stockholders calling for improved profits and share prices, many corporations have responded by REDUCING THEIR LABOR FORCES.

Management of Personnel Inventory Planning and Control Scheduling Project Management Quality Assurance

System OPERATION Involves decisions that relate to:

1. System Capacity 2. Geographical Location of Facilities 3. Arrangements of Departments and Placement of Equipment within Physical Structures 4. Product and service Planning 5. Acquisition of Equipment

System design Involves decisions that relate to:

SYSTEM APPROACH

System is a set of interrelated parts that must work together. It emphasizes interrelationships among subsystems, but its main theme is that the WHOLE is greater than the sum of its individual parts.

LEAN PRODUCTION

System that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety.

FLEXIBILITY

The ability to adapt quickly to change

Operation

The core of most business organizations; it is responsible for the creation of goods and services

Single or Large Scale product or service Continuous process Customized Batches Mass production

The degree of standardization and the volume of output of a product or service is influence the way a firm organizes production.

1. Customer contact (more in service than manufacturing) 2. Uniformity of input (manufacturing) 3. Labor content of jobs (service) 4. Uniformity of output (manufacturing) 5. Measurement of productivity (straightforward in manufacturing) 6. Quality Assurance (more important and challenging in service)

The differences involve the following: DIFFERENTIATING FEATURES OF PRODUCTION SYSTEMS

The essence of the operations function is to ADD VALUE during the transformation process.

The essence of the operations function is to ADD VALUE during the transformation process.

However, the jobs are the same.

The kinds of jobs that OPERATIONS MANAGER oversee vary from organization to organization.

OPERATIONS MANAGEment

The management of systems or processes that create goods and/or provide services. A term that more closely reflects the diverse nature of activities to which its concepts and techniques are applied.

PROVISION OF FUNDS

The necessary funding of operations and the amount and timing of funding can be important and even critical when funds are tight

Designed Redesigned Implemented Improved Changed

The output and objectives of the organization as a whole take precedence over those of any one subsystem. It is important if something is being:

Degree of Standardization

The output of production systems can range from highly standardized to highly customizedStandardized Output

FEEDBACK

To ensure that the desired outputs are obtained, measurements are taken at various points in the transformation process

1. OM activities are at the core of all business organizations. 2. Higher percentage or more jobs are in OM-related areas. (QA, Production Planning & Control, Scheduling, Job Design, Inventory) 3. All organizations are all interrelated with operations management activities.

WHY STUDY OPERATIONS MANAGEMENT

CONTROL

and then compared with previously established standards to determine whether corrective action is needed.

Production concepts and techniques

applied to a wide range of activities and situations outside manufacturing.

Business Organization

are devoted to producing goods and/or providing services. For Profit For Non-Profit

Organizations

are formed to pursue goals that are achieved more efficiently by the concerted efforts of a group of people than by individuals working alone.

Manufacturing and service

are often similar in terms of WHAT is done but different in terms of HOW it is done.

INPUTS

are used to obtain finished goods or services using one or more....

Forecasting Technique

are widely used in planning and scheduling.

The Community

being a good neighbor

Systems with standardized output can gerally take advantage of standardized

can generally take advantage of standardized methods, materials, and mechanization, all of which contribute to higher volumes and lower unit costs.

marketing

can provide also supply information on consumer preferences so that design will know the kinds of products and features needed.

finance function

comprises activities related to securing resources at favorable prices and allocating those resources throughout the organization.

Finance and OM personnel

cooperate by exchanging info and expertise

Statistical Models

currently used in many areas of decision making.

Quality

honoring warranties avoiding hidden defects

Customized Goods

include eyeglasses, custom-fitted clothing, window glass and customized draperies.

Customized services

include tailoring, taxi rides and surgery.

OPERATIONS MANAGER

is the key figure in the system: he has the ultimate responsibility for the creation of goods or provision of services.

VALUE ADDED

is the term used to describe the difference between the cost of inputs and the value or price of outputs.

Recognition of priorities

means devoting more attention to what is more important.

Customized Output

means that the product or service is designed for specific case or individual.

Standardized Output

means that there is a high degree of uniformity in goods or services.

BUDGETING

must be periodically prepared to plan financial requirements. must sometimes be adjusted, and performance relative to a budget must be evaluated.

The Operations Manager

must coordinate the use of resources through the management process of Planning Organizing Staffing Directing Controlling

Manufacturers

must decide what size building is needed

Marketing, Operations Management, and Finance

must interface on product and process design, forecasting, setting realistic schedules, quality and Quantity decisions, and keeping each other informed on the other's strengths and weaknesses.

The Environment

obeying government regulations

Unions

often oppose conversion from a traditional system to a lean system because they view the added responsibility and multiple tasks as an expansion of job requirements without comparable increases in pay

Linear Programming

optimum allocation of scarce resources

Finance

people should be included in these exchanges in order to provide info on what funds might be available and to learn what funds might be needed for new products or services.

operations manager

primary function is to guide the system by decision making.

Product Safety

providing products that minimize the risk of injury to users or damage to property or the environment.

GLOBAL MARKETPLACE OPERATIONS STRATEG TOTAL QUALITY MANAGEMENT 4. FLEXIBILITY 5. TIME REDUCTION 6. TECHNOLOGY 7. WORKER INVOLVEMENT 8. REENGINEERING

recent trends

They currently command considerable attention in business, as they heavily influence planning and decision making.

recent trends

Workers' Rights

respecting workers' rights, dealing with worker problems quickly and fairly.

Closing Facilities

taking into account the impact on a community, and honoring commitments that have been made.

LEAD TIME

the time necessary to deliver an order or perform a service.

Queuing Techniques

useful for analyzing situations in which waiting lines form.

Operations

will also have advance warning if new equipment or skills will be needed for new products or services.


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