OM Prelims part 1
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.