MGT 3370: Ch. 14
Fixed-position layout
The product stays in a fixed spot and components produced at remote stations are brought the product for to final assembly. ----products that are complex and difficult to assemble or so large that moving them from one workstation to another would be difficult.
Production System
The system that an organization uses to acquire inputs, convert inputs into outputs, and dispose of the outputs
Efficiency
amount of inputs required to produce a given output
The Concept of Quality
applies to the products of both manufacturing and service firms
Quality
goods and services that are reliable, dependable, or psychologically satisfying
Attributes of an organization's outputs
quality, cost, and features **determined by the organization's production system**
Customer relationship management (CRM)
technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time
Inventory
the stock of raw materials, inputs, and component parts that an organization has on hand at a particular time
Example of Process Layout
Custom furniture manufacturer might use a this layout so that different teams of workers can produce different styles of chairs or tables made from different kinds of woods and finishes
Example of fixed-position layout
Layout is commonly used for products such as jet airlines, mainframe computers, and gas turbines
Product layout
Machines are organized so that each operation is performed at work stations arranged in a fixed sequence.
Operations Manager
Manager who is responsible for managing an organization's production system and for determining where operating improvements might be made
Example of Product Layout
Mass production systems where workers are stationary and a belt moves work to them.
Flexible Manufacturing
Operations management techniques that attempt to reduce the setup costs associated with a production system.
Types of Facilities Layouts
Product layout, Process layout, Fixed-position layout
Process Layout
Self contained work stations not organized in a fixed sequence. **Provides flexibility in making a wide variety of products tailored to customers**
Just-in-Time (JIT) Inventory
System in which parts arrive at an organization when they are needed, not before
Improving Efficiency
The fewer the inputs required to produce a given output, the higher the efficiency of a production system
Process Reengineering (Def.)
The fundamental rethinking and radical redesign of the business process to achieve dramatic improvement in critical measures of performance such as cost, quality, service, and speed
Operations Management
The management of any aspect of the production system that transforms inputs into finished goods and services
Facilities Layout
The operations management technique whose goal is to design the machine-worker interface to increase production system efficiency.
Responsiveness to customers (Def.)
Action taken to meet the demands and needs of customers
Self-managed Work Teams
**The team takes on the role of the supervisor** -Teams boost efficiency by allowing for a flatter organization structure. -Teams working together often become very skilled at enhancing productivity.
Improving Responsiveness to Customers
**Without customers, organizations would cease to exist.** - Non-profit and for-profit firms all have customers. - Managers need to identify who the customer is and their needs.
Input Stage
*First Stage of Production System* - Raw Materials - Component Parts - Labor
Conversion Stage
*Second Stage of Production System* - skills - machines - computers
Output Stage
*Third and Final part of Production System* - Goods - Services
Improving Quality
- 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 through lower waste levels and operating costs.
What Customers Want
- A lower price to a higher price - High-quality products to low-quality products - Quick service to slow service - Many features over few features. - Products that are customized or tailored to their specific needs
Process Reengineering and Efficiency
- Boosts efficiency by directing efforts to activities that add value to the good or service produced - Top managers must support efficiency improvements for them to be accepted by workers
Expenses of Flexible Manufacturing
- These costs must be paid before production begins. - The more often products to be built change, the higher setup costs become.
How to reduce setup costs
- Using easily replaced manufacturing equipment - Redesigning the production system itself to be more productive.
Goals of Operations Management
1) Improve Quality 2) Improve Efficiency 3) Improve Responsiveness
Total Factor Productivity
How well an organization vitalizes all its resources to produce its output (labor, capital, materials, etc.) TFP = Outputs/All inputs
A drawback to JIT
If a firm does not maintain a large buffer stock of parts which makes the firm vulnerable to strikes or supply problems that can quickly deplete on-hand inventories.