chapter 6 - operations management and planning

8/2/2019 Chapter 6 - Operations Management and Planning

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OPERATIONS

MANAGEMENT AND

PLANNING

CHAPTER 8


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Learning Objectives

1. Define operations management.

2. Describe an operating system, and identifythe two basic types of operating systems.

3. Differentiate among product/service design,process selection, and site selectiondecisions.

4. Explain what a materials-handling system is.5. Describe and give an example of the three

basic classifications of facilities layouts


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6. Explain the sociotechnical approach to job design.

7. Describe several computer-related technologies thatare currently playing major roles inproduction/operations management.

8. Outline three major steps for developing anaggregate production plan.

9. Summarize the differences between resourceallocation and activity scheduling.

10. Distinguish between Gantt charts, critical pathmethod (CPM), and program evaluation and reviewtechnique (PERT).


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Introduction

Operations management is the applicationof the basic concepts and principles ofmanagement to those segments of theorganization that produce the goods and/orservices.

Operations planning is designing the

systems of the organization that producegoods or services and planning the day-to-day operations within these systems.


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The Importance of Operations

Management

Operations management consumes asignificant portion of resources.

Operations processes consume an

appreciable amount of time. Effective operations managers directly

influence employee output.

Managers face an unstable environment.


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Types of Operating Systems

Continuous flow system

Operating systems used by companies

that produce large amounts of similarproducts/services flowing through similarstages of the operating system.

Intermittent flow system

Operating system used when customized

products and services are produced.


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Simplified Model of anOperating System

Information

Plant,facilities,

equipment

Labor Labor

Goods orservices

Inputs

Conversionor

transformation

processes

Outputs

McGraw-Hill/Irwin 2005 The McGraw-Hill Companies, Inc. All rights reserved.


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Product/Service Design

An organizations product or service

determines the design of its operatingsystems.

Being functionally sound as well aseconomically sound are importantconsiderations.


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Process Selection

Conversion Changing iron ore into steelsheets.

Fabrication Changing sheet metal into a carbumper.

Assembly Assembling parts into a car.

Processes Example

Testing Systems check on a newlymanufactured car.

McGraw-Hill/Irwin 2005 The McGraw-Hill Companies, Inc. All rights reserved.


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Facilities Layout

Facilities layout

Process of planning the optimal physical arrangement of

facilities, including personnel, operating equipment, storage

space, office space, materials-handling equipment, androom for customer or product movement.

Needed for a variety of reasons

Construction of new facilities.

Obsolescence of current facilities.

Changes in demand.

Development of a new or redesigned product or process.

Personnel considerations: frequent accidents, poor working

environment, or prohibitive supervisory costs.


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Materials Handling

Principles:

1. Materials should move in direct flow patterns.

2. Related production processes should be arranged to provide

for direct material flows.

3. Mechanical materials-handling devices should be designed

and located to minimize human effort.

4. Heavy or bulky materials should be moved the shortest

distance possible.

5. The number of material movements should be minimized.

6. Systems flexibility should allow for unexpected situations.

7. Mobile equipment should carry full loads at all times.


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Layout Classifications

Product layout

Arranges equipment or services according to the

progressive steps by which the product is made or

the customer is served.

Process layout

Groups equipment or services of a similar function

type.

Fixed-position layout

Used when the product is too large to move and

remains in one place.


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Site Selection

Options for expanding capacity:

Subcontract work.

Add another shift. Work overtime.

Move operation to another facility.

Expand the current facility.

Keep the current facility and add another

facility elsewhere.


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Site Selection Factors

Revenue Location of customers and accessibility

Location of competitors

Operating Costs Price of materials

Transportation costs: materials, products, people

Wage rates

Taxes: income, property, sales

Utility rates

Rental rates

Communication costs


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Site Selection Factors (contd)

Investment Cost of land

Cost of construction

Other limiting factors Availability of labor with appropriate skills

Availability of materials, utilities, supplies

Union activity

Community attitudes and culture

Political situation

Pollution restrictions

Climate

General living conditions


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Job Design

Job design specifies the work activities of anindividual or group of individuals.

Job design specifies: The individual tasks.

The method of performing each task.

The combination of individual tasks intospecific jobs to be assigned to individuals


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Job content is the aggregate of all the work tasksthe jobholder may be asked to perform. Different people react differently to similar jobs. Job specialization has both advantages and

disadvantages.

Job method is the manner in which the human bodyis used, the arrangement of the workplace, and thedesign of the tools and equipment used; the purposeis to find the one best way to do a job. Motion studies are used to design jobs. Ergonomics studies the interaction between people

and machines.


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Job Characteristics

Job design may be described in terms of fivekey job characteristics:

Skill variety

Task identity Task significance

Autonomy

Feedback


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Sociotechnical Approach

Guidelines for job design:

1. The need for the content of a job to be reasonably

demanding for the employee in terms other than sheer

endurance and yet provide some variety.

2. The need to be able to learn on the job and go on learning.

3. The need for some minimum area of decision making that

the individual can call his or her own.4. The need for some minimum degree of social support and

recognition at the workplace.

5. The need to be able to relate what the individual does and

what he or she produces to the persons social life.


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Computer Technologyand the Design Process

Computer-aided design (CAD) Generates various views of different components

and assemblies.

Computer-aided engineering (CAE) Uses a products characteristics to analyze its

performance under different parameters.


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Computer Technologyand the Design Process (cont)

Computer-aided manufacturing (CAM) Uses stored data regarding various products to

provide instructions for automated production

equipment.

Computer-integrated manufacturing (CIM) Uses computer technology to incorporate all of

the organizations production-related functionsinto an integrated computer to assist, augment, orautomate most functions.


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Operations Planning

Aggregate operations planning Concerned with balancing major sections of the

operating system.

Matches the organizations resources with demand

for its goods and services.

Gantt chart Graphically depicts work planned and work

accomplished in relation to each other and to time.


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Operations Planning

Critical path method (CPM) Depicts the relationships among the various activities

of a project.

Used when time durations of project activities are

accurately known and have little variance.

Program evaluation and review technique(PERT)

Graphically depicts the relationships among the

various activities of a project. Used when time durations of project activities are not

accurately known.


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Gantt Chart


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Gantt Chart and Project Network


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Resource allocationefficient allocation ofpeople materials, and equipment to meet thedemand requirements of the operating

system; assisted by computer-assisted tools. Critical path method (CPM)

Program evaluation and review technique(PERT)


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Routing finds the best path and sequence ofoperations for attaining a desired level of output witha given mix of equipment and personnel; often usestwo types of charts.

Assembly chart depicts the sequence and manner inwhich the various components of a product or serviceare assembled.

Flow process chart outlines what happens to aproduct or service as it progresses through the facility.

Activity scheduling develops the precise timetableto be followed in producing a product or service.


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Summary

1. Define operations management.

2. Describe an operating system, and identifythe two basic types of operating systems.

3. Differentiate among product/service design,process selection, and site selectiondecisions.

4. Explain what a materials-handling system is.5. Describe and give an example of the three

basic classifications of facilities layouts


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6. Explain the sociotechnical approach to job design.

7. Describe several computer-related technologies thatare currently playing major roles inproduction/operations management.

8. Outline three major steps for developing anaggregate production plan.

9. Summarize the differences between resourceallocation and activity scheduling.

10. Distinguish between Gantt charts, critical pathmethod (CPM), and program evaluation and reviewtechnique (PERT).

chapter 6 - operations management and planning

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