MGMT Chap 15 (yay last one)

Drawbacks to computer assisted manufacturing:

-represent fundamental change, so they generate resistance -complex, so they are not always reliable. -expensive, so they raise the breakeven point, must operate at high levels of production and sales to be able to afford the systems.

Manufacturing technology:

-small batch -mass production -continuous processes Each form is associated with an organizational structure.

Guidelines for increasing speed of operations:

1. start from scratch. It is usually easier than trying to do what the organization does now faster. 2. minimize the number of approvals needed to do something. The fewer people who have to approve something, the faster it will get done. 3. Use work teams as a basis for organization. Teamwork and cooperation work better than individual effort and conflict 4. Develop and adhere to a schedule. A properly designed schedule increases speed 5. Do not ignore distribution: making something faster is only part of the battle 6. Integrate speed into the organization's culture. If everyone understands the importance of speed, things will naturally get done more quickly.

Improving productivity:

-improving operations -increasing employee involvement

Service organization:

during the decline of manufacturing, a tremendous growth in the service sector kept the US economy from declining at the same rate. A service organization is one that transforms resources into an intangible output and creates time or place utility for its customers. Ex. E*Trade makes stock transactions for its customers, Hertz leases cars to its customers, and local hairdressers cut clients hair. Grown to 80% of GNP in 2013

Work in progress:

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

Methods:

improved methods can improve product and service quality. Methods are operating systems used by the organization during the actual transformation process.

Costs:

improved quality also lowers costs. Poor quality results in higher returns from customers, higher warranty costs, and lawsuits. future sales are lost.

Capacity decisions:

involves choosing the amount of products, services or both that can be produced by the organization. Determining whether to build a factory capable of making 8000 or 100000 units per day is a capacity decision. -high risk due to uncertainties of future product demand the large monetary stakes involved. -a major factor in determining capacity is demand. A company operating with fairly constant monthly demand might build a plant capable of producing an amount each month roughly equivalent to its demand.

Managerial control:

managerial control ensures that resources and activities achieve primary goals such as high percentage of on time deliveries, low unit production cost, or high product quality.

Technology:

new forms of technology are useful in TQM. automation and robots can often make procusts with higher precision and better consistency than people.

Raw materials:

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

Just in time method (JIT)

recent breakthrough in inventory management. materials arrive just as they are needed. This helps an organization control its raw materials inventory by reducing the amount of space it must devote to storage. -popularized by the Japanese. reduces organization's investment in storage space for raw materials and in the materials themselves.

Cellular layout:

relatively new approach to facilities design. used when families of products can follow similar flow paths. Ex. a clothing manufacturer might create a cell, or designed area dedicated to making a family of pockets, such as pockets for shirts, coats, blouses, and slacks. Although each kind of pocked it unique, the same basic equipment and methods are used to make all of them. All pockets may be made in the same area and then delivered directly to different product layout assembly areas where the shirts, coats, blouses and slacks are actually being assembled.

supply chain management:

the process of managing operations control, resource acquisition and purchasing, and inventory so as to improve overall efficiency and effectiveness. -controls transformation processes to ensure that relevant goals are achieved in areas such as quality and costs.

Strategic commitment:

the starting point for TQM done by top management. important because: 1. the organizational culture must change to recognize quality is an objective goal. 2. a decision to pursue the goal of quality carries with it real costs-for expenditures such as new equipment and facilities. (without commitment from top management, quality will just be a gimmick)

Quality:

the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Has several different attributes: 1. performance: a product's primary operating characteristic; examples are automobile acceleration and a television's picture clarity 2. Features: supplements to a product's basic functioning characteristics, such as power windows on a car. 3. Reliability: a probability of not malfunctioning during a specified period. 4. Conformance: the degree to which a product's design and operating characteristics meet established standards. 5. Durability: a measure of the product's life 6. serviceability: the speed and ease of repair 7. aesthetics: how a product looks, feels, tastes and smells 8. Perceived quality: as seen by customer

Levels of productivity:

the units of analysis used to calculate or define productivity. Ex. aggregate productivity is the total set of productivity achieved by a country. Industry productivity: the total productivity achieved by all the firms in a particular industry. Company productivity: the level of productivity achieved by an individual company. Unit and individual productivity: the productivity achieved by a unit or department within an organization and the level of productivity attained by a single person.

computer aided design (CAD)

the use of computers to design parts and complete products and to simulate performance so that prototypes need not be constructed. Ex. Boeing uses CAD tech to study hydraulic tubing in its commercial aircraft.

Process layout:

used in operations settings that create or process a variety of products. Auto repair shops and health care clinics are good examples. The needs of each incoming job are diagnosed as its enters operations system and the job is routed through the unique sequence of workstations needed to create the desires finished product

Fixed positions layout:

used when the organization is creating a few very large and complex products. Aircraft manufacturers and shipbuilders require enormous plants, so instead the airplane shell itself remains stationary and people and machines move around it as it is assembled.

Flexible manufacturing systems:

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.

Materials:

Another important part of TQM is improving the quality of the materials hat organizations use. Suppose that a company that assembles stereos buys chips and circuits from another company. If the chips have a high failure rate, consumers will return defective stereos to the company whose name plate appears on them. Results in refunds to customers and damaged reputations.

Product layout:

Appropriate when large quantities of a single product are needed. Ex. assembly line, HP personal computer factories.

computer aided manufacturing (CAM)

CAD is usually combined with computer aided manufacturing (CAM) to ensure that design moves smoothly to production. The production computer shares the design computer's information and is able to have machines with proper settings ready when production is needed. A CAM system is especially useful when reorders come in because the computer can quickly produce the desired product, prepare labels and copies of orders, and send the product out to where it is wanted.

Computer integrated manufacturing (CIM)

In CIM, CAD and CAM are linked together, and computer networks are automatically adjust machine placements and settings to enhance both the complexity and the flexibility of scheduling. In settings that use these technologies, all manufacturing activities are controlled by the computer network.

Total quality management:

The most pervasive approach to managing quality. (quality assurance) 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. -a real and meaningful effort by an organization to change its whole approach to business in order to make quality a guiding factor in everything it does.

operations management:

The total set of managerial activities used by an organization to transform resource inputs into products and services. Ex. when a Domino's employee orders food ingredients and paper products and then combines them to create pizza. -creates value and utility If the product is physical, operations create value and provide a form of utility by combining dissimilar inputs to make something that is more valuable than the cost of inputs used to create it.

Forms of productivity:

Total factor productivity defined by the following formula: Productivity = outputs/inputs **an overall indicator of how well an organization uses all of its resources, such as labor, capital, materials and energy, to create all of its products and services. The biggest problems with TFP is that all the ingredients must be expressed in the same terms- dollars. gives little insight into how things can be changed. Most firms find it more useful to calculate a partial productivity ratio. Labor productivity= outputs/ direct labor **This method has two advantages: 1. it is not necessary to transform units of input into some other unit. 2. provides managers with specific insights into how change different resource inputs.

Manufacturing:

a form of business that combines and transforms resources into tangible outcomes that are then sold to others. -entered a period of decline in the 1970's.

Product-Service Mix:

a natural starting point in designing operations systems is determining product service mixes. This decision flows from corporate business and marketing strategies. Manager have to make a number of decisions about their products and services, starting with how may and what kinds to offer. Ex. Colgate-Palmolive makes regular tartar control gel and various other formulas of Colgate toothpaste and packages them in several different sizes of tubes, pumps, and other dispensers.

ISO 14000

a set of standards for environmental performance. requires that firms documents how they are using raw materials more efficiently, managing pollution, and reducing their impact on the environment.

Inventory management:

also called materials control, is essential for effective operations management. The four basic kinds of inventories are raw materials work in progress finished goods in transit inventories **the sources of control over these inventories are as different as their purposes.

Purchasing management:

also called procurement, is concerned with buying the materials and resources needed to produce products and services. In many ways, purchasing is at the very heart of effective supply chain management. The purchasing manager buys raw materials, parts, and machined needed by the organization. Must balance a large number of constraints. Cant buy too much or too little.

Productivity:

an economic measure of efficiency that summarizes the value of outputs, related to the value of inputs used to create them. -often assessed at different levels of analysis and in different forms.

Statistical quality control:

another control technique. As the term suggests, SQC is concerned primarily with managing quality. A set of specific statistical techniques used to monitor quality. Acceptance sampling: involves sampling finished goods to ensure that quality standards have been met. Effective only when the correct percentage of products that should be tested is determined. 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.

employee involvement:

another critical ingredient in TQM. all quality enhancement programs involve making the person responsible for doing the job responsible for making sure its done right. -work teams are common vehicles for increasing employee involvement.

Outsourcing:

another innovation for improving quality is outsourcing. Outsourcing is the process of subcontracting services and operations to other firms that can perform them cheaper or better. If a business performs each and every one of its own administrative and business services and operations, it is almost certain to be doing at least some of them in an inefficient or low quality manner.

Reducing cycle time:

another popular TQM technique is reducing cycle time. Cycle time is the time needed by an organization to develop, make and distribute products or services. If a business can reduce its cycle time, quality will often improve.

Robotics:

another trend in manufacturing technology is computerized robotics. Any artificial device that is able to perform functions ordinarily though to be appropriate for human beings. Robotics refers to the science and tech of the construction, maintenance and use of robots. -welding is the most common application of robotics.

Malcom Baldridge Award:

created by the us government, named after the former secretary of commerce who championed quality in US industry. Given annually to firms who achieve major improvements in the quality of their products or services. Based on changes in quality rather than absolute quality.

Computer assisted manufacturing:

current extensions of automation generally revolve around computer assisted manufacturing- a technology that relies on computers to design or manufacture products. Technology that relies on computers to design or manufacture products.

Six Sigma:

developed in the 1980's for Motorola. The tool can be used by manufacturing or service organizations. The six sigma method tries to eliminate mistakes. Although firms rarely obtain six sigma quality, it does provide a challenging target. Sigma refers to a standard deviation so a sic sigma defect rate is six standard deviations above the mean rate. requires correcting errors until they virtually disappear.

In transit (pipeline)

distribute products to customers source of control: transportation and distribution control systems.

productivity:

managers have also come to recognize that quality and productivity are related. In the past, managers thought they could increase output only by decreasing quality. Managers today have learned the hard way that such an assumption is almost always wrong. If a firm installs a meaningful quality enhancement program, three things are likely to result: 1. the number of defects is likely to decrease, causing fewer returns from customers 2. resources dedicated to reworking flawed output will decrease 3. making employees responsible for quality reduces the need for quality inspectors, the organization is able to produce more units with fewer resources.

Technology:

one central element of effective operations management. A set of processes and systems used by organizations to convert resources into products or services.

Operations management as control

one way of using operations management as control is to coordinate it with other functions. Monsanto company established a consumer products division that produces and distributes fertilizers and lawn chemicals. To facilitate control, the operations function was organized as an autonomous profit center. Monsanto finds this effective because its manufacturing division is given authority to determine not only the costs of creating the product, but also the product price and the marketing program.

increasing employee involvement:

participation, Ex. an individual worker being given more voice in how she does her job, a formal agreement of cooperation between management and labor, and total involvement throughout the organization. -increasing flexibility and training workers to perform a number of different jobs. This cross-training allows the firm to function with fewer workers. -giving rewards is essential in making employee involvement work

Finished goods:

provide ready supply of products on customer demands and enable long, efficient and production runs. Source of control: high level production scheduling systems in conjunction with marketing

competition:

quality has become one of the most competitive points in business. Ex. cutting representatives at call centers

Improving operations:

spending more on research and development. This helps identify new products, new uses for existing products, and new methods for making products. -reassessing/revamping transformation facilities.

Layout:

the choice of physical configuration. Closely related to other operations decisions. The three entirely different layout alternatives demonstrate the importance of layout decisions. -product layout -process layout -fixed positions 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. Such an analysis often reveals wasteful or unnecessary activities that can be eliminated without jeopardizing customer service. Ex. HP determined that its contracts were unnecessarily long, confusing, and hard to understand. The firm cut its standard contract down from 20 pages to 2 pages and experiences an 18% increase in sales.

Feedback:

the flow of information from the machine back to the sensor. sensors are the parts of the system that gather information and compare it to present standards. The control mechanism is the device that sends instructions to the automatic machine. Ex. a thermostat has sensors that monitor air temperature and compare it to a present low value. If the air temperature falls below the present 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 present value, the thermostat stops the the furnace. The last step (shutting off the furnace) is known as feedback, a critical component of any automated operation.

Facilities:

the physical locations where products or services are created, stored, and distributed. Major decisions pertain to facilities location and facilities layout. -location -layout

Location

the physical positioning or geographic site of facilities and must be determined by the needs and requirements of the organization. A company hat relies heavily on railroads for transportation needs to be located close to rail facilities.

automation:

the process of designing work so that it can be completely or almost completely performed by machines. -automated machines work quickly and make few mistakes. -most recent step in the development of machines and machine controlling devices. -relies on feedback, information, sensors and a control mechanism. -started in the 1700s

Benchmarking:

the process of learning how other firms do things in an exceptionally high quality manner. Some approaches to benchmarking are simple and straightforward, Ex. Canon routinely buys copiers made by other firms and takes them apart to see how they work.

ISO 9000:2000

useful technique for improving Quality. Refers to a set of quality standards created by the international organization for standardization; the standards were revised and updated in 2000. These standards cover areas such as product testing, employee training, and record keeping, supplier relations, and repair policies and procedures. Firms that want to meet these standards apply for certification and are audited by a firm chosen by the organization's domestic affiliate.

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.

TQm tools and techniques:

value added analysis benchmarking outsourcing cycle time ISO 9000:2000 ISO 14000 SQC Six Sigma