CH 20

in transit (pipeline)

purpose: distribute products to customers source of control: transportation and distribution control system

competition

quality has become one of the most important competitive points in business today

outsourcing

subcontracting services and operations to other firms that can perform them more cheaply or better

conformance

the degree to which a products design and operating characteristics meet established standards

control mechanism

the device that sends instructions to the automatic machine

feedback

the flow of information from the machine back to the sensor

company productivity

the level of productivity of a single company

sensors

the parts of the system that gather information and compare it to preset standards

automation

the process of designing work so that it can be completely or almost completely performed by machines -automated machines operate quickly and make few errors, they increase the amount of work that can be done. Thus automation helps to improve products and services and fosters innovation. -relies on feedback, information, sensors, and a control mechanism ex: A thermostat has sensors that monitor air temperature and compare it to a preset value. If the air temperature falls below the preset value, the thermostat sends an electrical signal to the furnace, turning it on. The furnace heats the air. When the sensors detect that the air temperature has reached a value higher than the low preset value, the thermostat stops the furnace. The last step (shutting off the furnace) is known as feedback, a critical component of any automated operation.

bechmarking

the process of learning how other firms do things in an exceptionally high-quality manner ex: Xerox routinely buys copiers made by other firms and takes them apart to see how they work. This enables the firm to stay abreast of improvements and changes its competitors are using

unit productivity

the productivity level of a unit or department

industry productivity

the total productivity of all firms in an industry

computer-integrated manufacturing (CIM)

CAD and CAM are linked together, and computer networks automatically adjust machine placements and settings to enhance both the complexity and the flexibility of scheduling

strategic commitment

Such commitment is important for several reasons. First, the organizational culture must change to recognize that quality is not just an ideal but an objective goal that must be pursued.Footnote Second, a decision to pursue the goal of quality carries with it some real costs—for expenditures such as new equipment and facilities. Thus, without a commitment from top management, quality improvement will prove to be just a slogan or gimmick, with little or no real change.

features

Supplements to a product's basic function - the "bells and whistles"

layout

The physical configuration of facilities, the arrangement of equipment within facilities, or both

cycle time

The time needed by the organization to accomplish activities such as developing, making, and distributing products or services

operations management

The total set of managerial activities used by an organization to transform resource inputs into products, services, or both ex: When Dell Computer buys electronic components, assembles them into PCs, and then ships them to customers ex: When a Pizza Hut employee orders food and paper products and then combines dough, cheese, and tomato paste to create a pizza

the meaning of quality

The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. -both a relative and absolute concept. -relevant to both products and services.

cellular layout

a configuration of facilities used when families of products can follow similar paths

manufacturing organization

a form of business that combines and transforms resource inputs into tangible outcomes that are then sold to others ex: Harley Davidson combines sheet metal, rubber, paint, internal combustion engines, and human skills to make a motorcycle

reliability

a probability of not malfunctioning during a specific period

service organization

an organization that transforms resources into an intangible output and creates time and place utility for its customers ex: Delta Airlines - The airline transports passengers and freight according to agreed-upon departure and arrival places and times

perceived quality

as seen by a customer

designing operations systems

-Determining Product-Service Mix -Capacity Decisions -Facilities Decisions -Types of layouts

8 dimensions of quality

1. Performance 2. Features 3. Reliability 4. Conformance 5. Durability 6. Serviceability 7. Aesthetics 8. Perceived Quality

computer assisted manufacturing

A technology that relies on computers to design or manufacture products types: computer-aided design computer-aided manufacturing

productivity

An economic measure of efficiency that summarizes what is produced relative to resources used to produce it

improving productivity

Improving Operations Increasing Employee Involvement

manufacturing technology

Technology Automation Robot Robotics

durability

a measure of product life

employee involvement

all successful quality enhancement programs involve making the person responsible for doing the job responsible for making sure it is done right

types of layouts

product layout process layout fixed position layout cellular layout

value added analysis

the comprehensive evaluation of all work activities, materials flows, and paperwork to determine the value that they add for customers -often reveals wasteful or unnecessary activities that can be eliminated without jeopardizing customer service

levels of productivity

the unit of analysis used to calculate or define productivity 1. aggregate 2. industry 3. company 4. unit 5. individual

operations management as control

coordinating operations management with other functions helps insure the system focuses on critical elements and crucial to goal attainment

fixed position layout

facilities arranged around a single work area; used for the manufacture of large and complex products

process layout

facilities arranged around the process; used in facilities that create or process a variety of products

product layout

facilities arranged around the product; used when large quantities of a single product are needed

costs

improved quality reduces costs from customer returns, warranty, and lawsuits for faulty products, and lost sales to future customers

increasing employee involvement

-Increased employee participation can increase both quality and productivity -Cross-training of employees allows firms to function with fewer workers -Rewards are essential to success in improving productivity

statistical quality control

-acceptance sampling -inprocess sampling

facilities decisions

-facilities are the physical locations where products or services are created, stored, and distributed -location -layout

importance of excellence in operations

-necessary for competitiveness and overall organization performance -creates value and utility through the production of products and services

role of operations in organizational strategy

-operations management has a direct impact on competitiveness, quality, productivity, and effectiveness -operations management and organizational strategy have reciprocal effects on each other -strategic goals cannot be met if there are deficiencies and insufficiencies in operations resources

improving operations

-spending more resources on research and development helps identify new products, new uses for existing products, and new methods for making products -reworking transformation processes and facilities can boost productivity

TQM Tools and Techniques

1. Value-Added Analysis 2. Benchmarking 3. outsourcing 4. reducing cycle time 5. statistical quality control

reducing cycle time

1. start from scratch 2. minimize the number of approvals needed to do something 3. use work teams as a basis for organization 4. develop and adhere to a schedule 5. do not ignore distribution 6. integrate speed into the organizations culture

total quality management (TQM)

A strategic commitment by top management to change its whole approach to business in order to make quality a guiding factor in everything it does 5 basic dimensions: strategic commitment -employee involvement -materials -technology -methods to quality improvements

robot

Any artificial device that is able to perform functions ordinarily thought to be appropriate for human beings ex: Daimler-Benz, for instance, replaced about 200 welders with 50 robots on an assembly line and increased productivity about 20 percent ex: The Dallas police used a robot to apprehend a suspect who had barricaded himself in an apartment building. The robot smashed a window and reached with its mechanical arm into the building. The suspect panicked and ran outside

technology

Automation and robots, for example, can often make products with higher precision and better consistency than can people. Investing in higher-grade machines capable of doing jobs more precisely and reliably often improves quality

technology

The set of processes and systems used by organizations to convert resources into products or services

inventory control

also called materials control -managing raw materials, work in process, finished goods, and in-transit inventories

purchasing management

also called procurement -controlling the buying of the materials and resources is at the heart of effective supply chain management -The manager responsible for purchasing must balance a number of constraints. Buying too much ties up capital and increases storage costs. Buying too little might lead to shortages and high reordering costs. -The manager must also make sure that the quality of what is purchased meets the organization's needs, that the supplier is reliable, and that the best financial terms are negotiated.

just in time method

an inventory system that has necessary materials arriving as soon as they are needed so that the production process is not interrupted

aesthetics

how a product looks, fells, tastes, and smells

capacity decisions

involve choosing the amount of products, services, or both that can be produced by an organization -can be high risk due to uncertainty about future product demand and incurred costs of additional, possibly excess, capacity -An organization that builds capacity exceeding its needs may commit resources (capital investment, space, and so forth) that will never be recovered. Alternatively, an organization can build a facility with a smaller capacity than expected demand. Doing so may result in lost market opportunities, but it may also free capital resources for use elsewhere in the organization. ex: a restaurant - right now many people are waiting for tables. If the restaurant were larger more customers could be seated immediately and the restaurant would generate more revenue. However, during other periods when demand might be lower the restaurant would have unused space and experience higher costs.

determining product-service mix

involves deciding how many and what kinds of products to offer in the marketplace -Decisions also have to be made regarding the level of quality desired, the optimal cost of each product or service, and exactly how each is to be designed. ex: Procter & Gamble, for example, makes regular, whitening, tartar-control, and various other formulas of Crest toothpaste, offers each in a variety of flavors, and packages them in several different sizes of tubes, pumps, and other dispensers ex: workers at Subway sandwich shops can combine different breads, vegetables, meats, and condiments to create hundreds of different kinds of sandwiches

in-process sampling

involves evaluating products during production so that needed changes can be made -advantage is that it allows problems to be detected before the accumulate ex: The painting department of a furniture company might periodically check the tint of the paint it is using. The company can then adjust the color as necessary to conform to customer standards

acceptance sampling

involves sampling finished goods to ensure that quality standards have been met. - is effective only when the correct percentage of products that should be tested (for example, 2, 5, or 25 percent) is determined

materials

many firms have increased the quality requirements they impose on their suppliers as a way of improving the quality of their own products.

Malcolm Baldrige Award

named after a former secretary of commerce, this award is given by the commerce department to firms that achieve major quality improvements

methods

operating systems used by the organization during the actual transformation process. ex: American Express Company has found ways to cut its approval time for new credit cards from three weeks to only two days. This results in improved service quality.

performance

product's primary operating characteristics ex: automobile acceleration and a televisions picture clairty

work in process

purpose: enable overall production to be divided into stages of manageable size source of control: shop-floor control systems

finished goods

purpose: provide ready supply of products on customer demand and enable long, efficient production runs source of control: high-level production scheduling systems in conjunction with marketing

raw materials

purpose: provide the materials needed to make the product source of control: purchasing models and systems

productivity

quality enhancement programs decrease defects, reduce rework, and eliminate the need for inspectors as employees assume responsibility for quality

robotics

refers to the science and technology of the construction, maintenance, and use of robots

service technology

services are rapidly moving toward automated systems and procedures ex: Banking - new technological breakthroughs led to automated teller machines and made it much easier to move funds between accounts or between different banks. Most people now have their paychecks deposited directly into a checking account from which many of their bills are then automatically paid. Electronic banking—where people can access their accounts, move money between accounts, and pay bills—has become commonplace, and many people deposit checks digitally using imaging from their smartphones ex: Hotels - use increasingly sophisticated technology to accept and record room reservations. People can now, for instance, check in online and stop by the front desk only long enough to pick up their room key.

location

the physical positioning or geographic site of facilities

supply chain management

the process of managing operations control, resource and inventory acquisition and purchasing, and this improving overall efficiency and effectiveness

individual productivity

the productivity achieved by a unit or department within an organization and the level of productivity attained by a single person

serviceability

the speed and ease of repair

aggregate productivity

the total level of productivity for a country

computer aided manufacturing

the use of computers in the manufacturing of products to ensure that the design moves smoothly to production

computer aided design

the use of computers to design parts and complete products and to simulate performance so that prototypes need not be constructed ex: Boeing uses this to study hydraulic tubing in its commercial aircraft ex: Japan's automotive industry uses it to speed up car design

flexible manufacturing systems (FMS)

usually have robotic work units or workstations, assembly lines, and robotic carts or some other form of computer-controlled transport system to move material as needed from one part of the system to another ex: Ford Motors uses this as it adjusts plant capabilities to produce pickups, SUVs, or small hybrids depending on fluctuations in demand and supply