factory management

8/3/2019 Factory Management

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Factory Management


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Overview

Introduction Different Ways of Studying FM

Wrap-Up: What World-Class Producers Do


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Introduction

Factory management is the management of anorganizations productive resources or its production

system.

A production system takes inputs and converts them

into outputs.

The conversion process is the predominant activity of

a production system.

The primary concern of an operations manager is theactivities of the conversion process.


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Organizational Model

Marketing

MISEngineering

HRM

QA

Accounting

Sales

Finance

FM


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Scientific Management

Frederick Taylor is known as the father of scientificmanagement. His shop system employed these steps:

Each workers skill, strength, and learning ability

were determined.

Stopwatch studies were conducted to precisely set

standard output per worker on each task.

Material specifications, work methods, and routing

sequences were used to organize the shop. Supervisors were carefully selected and trained.

Incentive pay systems were initiated.


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Scientific Management

In the 1920s, Ford Motor Companys operationembodied the key elements of scientific management:

standardized product designs

mass production

low manufacturing costs

mechanized assembly lines

specialization of labor

interchangeable parts


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Human Relations and Behavioralism

In the 1927-1932 period, researchers in theHawthorne Studies realized that human factors were

affecting production.

Researchers and managers alike were recognizing

that psychological and sociological factors affected

production.

From the work of behavioralists came a gradual

change in the way managers thought about andtreated workers.


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Operations Research

During World War II, enormous quantities ofresources (personnel, supplies, equipment, ) had to

be deployed.

Military operations research (OR) teams were formed

to deal with the complexity of the deployment.

After the war, operations researchers found their way

back to universities, industry, government, and

consulting firms. OR helps operations managers make decisions when

problems are complex and wrong decisions are

costly.


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The Service Revolution

The creation of services organizations acceleratedsharply after World War II.

Today, more than two-thirds of the US workforce is

employed in services.

About two-thirds of the US GDP is from services.

There is a huge trade surplus in services.

Investment per office worker now exceeds the

investment per factory worker.

Thus there is a growing need for service operations

management.


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The Computer Revolution

Explosive growth of computer and communicationtechnologies

Easy access to information and the availability of

more information

Advances in software applications such as Enterprise

Resource Planning (ERP) software

Widespread use of email

More and more firms becoming involved in E-Business using the Internet

Result: faster, better decisions over greater distances


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Today's Factors Affecting FM

Global Competition Quality, Customer Service, and Cost Challenges

Rapid Expansion of Advanced Technologies

Continued Growth of the Service Sector Scarcity of Operations Resources

Social-Responsibility Issues


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Studying Factory Management Operations as a System Decision Making in FM


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Operations as a System

Inputs Outputs

Conversion

Subsystem

Production System

Control

Subsystem


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Inputs of an Operations System

External Legal, Economic, Social, Technological

Market

Competition, Customer Desires, Product Info. Primary Resources

Materials, Personnel, Capital, Utilities


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Conversion Subsystem

Physical (Manufacturing) Locational Services (Transportation)

Exchange Services (Retailing)

Storage Services (Warehousing) Other Private Services (Insurance)

Government Services (Federal)


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Outputs of an Operations System

Direct Products

Services

Indirect Waste

Pollution

Technological Advances


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Production as an Organization Function

US companies cannot compete with marketing,finance, accounting, and engineering alone.

We focus on FM as we think of global

competitiveness, because that is where the vast

majority of a firms workers, capital assets, and

expenses reside.

To succeed, a firm must have a strong operations

function teaming with the other organizationfunctions.


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Decision Making in FM

Strategic Decisions Operating Decisions

Control Decisions


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Strategic Decisions These decisions are of strategic importance and have

long-term significance for the organization.

Examples include deciding:

the design for a new products production process

where to locate a new factory

whether to launch a new-product development plan


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Operating Decisions

These decisions are necessary if the ongoingproduction of goods and services is to satisfy market

demands and provide profits.


how much finished-goods inventory to carry

the amount of overtime to use next week

the details for purchasing raw material next month


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Control Decisions These decisions concern the day-to-day activities of

workers, quality of products and services, production

and overhead costs, and machine maintenance.


labor cost standards for a new product

frequency of preventive maintenance

new quality control acceptance criteria


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What Controls the Operations System?

Information about the outputs, the conversions, andthe inputs is fed back to management.

This information is matched with managements

expectations

When there is a difference, management must take

corrective action to maintain control of the system


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Wrap-Up: World Class Practice

FM important in any organization Global competition forces rapid evolution of OM

Decision based framework focus of course

Strategic, Operating, and Control


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Supply Chain Management - Introduction

Supplier

Supplier

Supplier

Storage} Mfg. Dist. Retailer CustomerStorage

Supplier

Supplier

Storage} Service Customer


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Product design Should products be redesigned to reduce logistics costs?

Should products be redesigned to reduce lead times?

Would delayed differentiation be helpful?

Information technology and decision-support systems What data should be shared (transferred)

How should the data be analyzed and used?

What infrastructure is needed between supply chain

members?

Should e-commerce play a role?

?


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Customer value How is customer value created by the supply

chain?

What determines customer value? How do we

measure it?

How is information technology used to enhance

customer value in the supply chain?


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Creating an effective supply chain Develop strategic objectives and tactics

Integrate and coordinate activities in the internal

portion of the supply chain

Coordinate activities with suppliers and customers

Coordinate planning and execution across the

supply chain

Consider forming strategic partnerships


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Shop Floor Control

Even a journey of one thousand li begins with a single

step.

Lao Tze

It is a melancholy thing to see how zeal for a good thing

abates when the novelty is over, and when there is no

pecuniary reward attending the service.

Earl of Egmont


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What is Shop Floor Control?

Definition: Shop Floor Control (SFC) is the processby which decisions directly affecting the flow ofmaterial through the factory are made.

Functions:

WIP

Tracking

Throughput

Tracking

Status

Monitoring

Work

Forecasting

Capacity

Feedback

Quality

Control

Material Flow

Control


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Planning for SFC

Gross Capacity Control: Match line to demand via:

Varying staffing (no. shifts or no.

workers/shift)

Varying length of work week (or work day)

Using outside vendors to augment capacity Bottleneck Planning:

Bottlenecks can be designed

Cost of capacity is key Stable bottlenecks are easier to manage


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Span of Control: Physically or logically decompose system

Span of labor management (10 subordinates)

Span of process management (related technology?)


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Discovering the Hidden Factory


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Plant capacity can be increased by putting the hiddenfactory to work. The hidden factory is all the

production capacity lost due to the unnecessary waste

of operating time and production rate. It can total to

more than half of the plant and equipment capacity inthose organisations that are not aware of their time

and production wastes.


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To find the size of the hiddenfactory it is necessaryto measure actual performance against the maximum

rated potential of the operation. The difference

between the two - maximum possible and actual

achievementis the size of the hiddenfactory.


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As the plant uptime is increased more production ismade in the same time for the same cost. This drives

the unit cost down, the return on assets goes up, the

profit also goes up, and because customers get their

orders sooner, their satisfaction also rises.


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STORE MANAGEMENT


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Managing the Store


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Nordstrom for Store Managers

This is your business. Do your own thing.

Dont listen to us in Seattle, listen to your

customers. We give you permission to take

care of your customers.

James Nordstrom, the CEO of Nordstroms


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Responsibilites of Store ManagersUndertaken by Store Managers

Managing Store Employees

Recruiting & selecting

Socializing & training

Motivating

Evaluating & providing constructive feedback

Rewarding & compensating

Controlling Costs

Increasing labor and productivity

Reducing maintenance & energy costs

Reducing inventory lossesManaging Merchandise

Displaying merchandise & maintaining visual standards

Working with buyersSuggesting new merchandise

Buying merchandise

Planning & managing special events

Marking down merchandiseProviding Customer Service

$

John


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Steps in the Employee ManagementProcess

1. Recruit & select

employees

2. Socialize & train

new employees

3. Motivate & manage

employees to

achieve store

performance goals

4. Evaluate employee

performance &

provide feedback

5. Compensate &

reward employees


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Recruiting and Selecting Employees

Job analysis

Job description

Locating prospects

Screening applicants

- Application form, references, testing

Selecting applicants

- Interviewing candidates

S


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Socializing and Training Employees

Orientation program

Training

- Where, when, what

M i i d M i E l


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Motivating and Managing Employees

Leadership

- Task and group maintenance management

- Participate and authoritarian

Motivation

- Setting goals

- Maintaining morale

E l i d P idi F db k


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Evaluating and Providing Feedback toEmployees

Evaluation

- Who, when, how often?

Feedback

- Performance outcome vs. process


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Factors Used to Evaluate SalesAssociates at The Gap

25% Operations 50%

Sales/Customer

Relations25% Compliance


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Common Evaluation Errors

Ratings unduly negative

Rating unduly positive

Using the same rating on all aspects of the evaluation

Placing too much weight on recent events rather than

evaluating performance over the entire period

Having the evaluation of a salesperson unduly

influenced by the evaluation of other salespeople

Making errors in identifying causes of the salespersons

performance

C ti d R di


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Compensating and RewardingEmployees

Extrinsic vs. intrinsic rewards

Compensation

- Type

Straight salary Straight commission

Salary plus commission

Quota bonus (Setting quotas)

- Individual vs. group incentives

Ad t d Di d t f


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Advantages and Disadvantages ofStraight Salary

Straight Salary Incentive Compensation

Offers flexibility in assigning employees Has high motivating potential

to activities

Builds stronger employee commitment Has more variable cost

Is easy for employees to understand Relates compensation to productivity

Is easy to administer

Allows for better performance of

non-selling activities such as customer

service

C t lli C t


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Controlling Costs

Labor scheduling

Store maintenance

Energy maintenance

Reducing inventory loss

Sources of Inventory Shrinkage


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Sources of Inventory Shrinkage

Employee theft (38%)

Shoplifting (36%)

Mistakes and inaccurate records (19%)

Vendor errors (6%)

Preventing Shoplifting


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Preventing Shoplifting

Store design

Employee training

Good customer service

- Security measures

- TV cameras

- Prosecution

Reducing Employee Theft


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Reducing Employee Theft

Trusting, supportive work atmosphere

Employee screening

- Honesty, drug testing

Security personnel - mystery shoppers

Policies and procedures

Employee theft is an HR problem.

Closing the Knowledge GAP


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Closing the Knowledge GAP

Customer research

More interactions between managers

and customers

Better communications between

managers and service providers

Closing the Standards GAP


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Closing the Standards GAP

High quality service commitment

Innovative solutions

Define the role of service providers

Set service goals

Measure service performance

Closing the Delivery GAP


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Closing the Delivery GAP

Information and training

Internal communications

Reduce conflicts

Empower employees

Providing incentives

Closing the Communications GAP


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Closing the Communications GAP

Realistic commitments

Managing customer expectations

Service Recovery


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Service Recovery

Listen to the customer

Provide a fair solution

Resolve problem quickly

- Reduce number of contacts

- Give clear instructions

- Avoid jargon


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Retail Selling

Steps in the Selling & Buying Process


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Steps in the Selling & Buying Process

1. Approaching the customers

2. Collecting Information

3. Presenting & demonstrating merchandise &overcoming reservations

4. Making the sale

5. Building future sales

Steps in the Selling & Buying process


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Steps in the Selling & Buying process

1. Problem recognition

2. Information search

3. Alternative evaluation

4. Alternative choice

5. Postpurchase evaluation

Selling Benefits Not Features


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Selling Benefits, Not Features

PRESENTATION EMPHASIZING FEATURES

This chinawear has a hard glaze that is applied after the pattern

is on the cups and plates. The handles are molded into the cup

before it is fired. All the china is fired at 2600 F.

PRESENTATION EMPHASIZING BENEFITS

This chinawear will last a long time. It is stronger than most

chinawear because it is fired at 2600 F. To prevent the cuphandles from breaking off, they are molded into the cup body

before it is fired. The pattern will also last a long time. It wont

fade because a hard leadless glaze is applied over the pattern.

Types of Reservations


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Types of Reservations

TimingI havent made

up my mind.

Salesperson

I dont like him.

Store

I dont know

about this stores

return policy.

MerchandiseI dont think this

is made well.

Price

This is too expensive.

Location

I cant find it.

Building Relationships With a Customer


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Building Relationships With a Customer

11-10-97

Dear Ms. Marker,

It was a pleasure meeting you and assisting you with your

sunglasses from our accessories dept. at our Neimans Northpart

store. Looking forward to seeing you again soon, and please do not

hesitate to call for any assistance.

Sincerely,

Diana Carreon

NeimanMarcus

Diana Carreon

SALES. FASHION . ACCESSORIES

400 NORTHPARK CENTERDALLAS, TX 75225

(214)363-8311

Ext. 2127Res. 327-2258

Patterns of Nonverbal Communication


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INTERPRETATION BODY ANGLE FACE ARMS HANDS

Power,

dominance,

superiority

Exaggerated

leaning over.

Piercing

eye

contact.

Hands on

hips.

Hands

behind neck

or back.

Steepling

(fingertips

touching).


Nervousness,

submission,

apprehension

Fidgeting or

shifting from

side to side.

Head

down.

Minimumeye

contact.

Constant

blinking.

Hands to

face, hair.

Rubbingback of

neck.

Wringing

hands.

Fingersclasped.

Source: Barton Weitz, Stephen Castleberry, and John Tanner, Selling: Building Parternships,3rd ed. (Burr Ridge, IL: Irwin/McGraw-Hill, 1998).



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Disagreement,

anger,

skepticism

Turning body

away.

Negative

shake of head,

frown. Lips

pursing. Eyes

squinting.

Chinthrusting out.

Arms

crossed.

Finger

under

collar.

Fist. Finger

pointing.

Hands

gripping

edge of

display.


Boredom,

distinterest

Slouching

against

display.

Lack of eye

contact.

Looking atdoor, at

watch, out

window.

Blank stare.

Playing with

object on

display case.Drumming

on display

case..

Source: Barton Weitz, Stephen Castleberry, and John Tanner, Selling: Building Parternships,3rd ed. (Burr Ridge, IL: Irwin/McGraw-Hill, 1998).

Points to Consider in Handling Objective


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Points to Consider in Handling Objective

Anticipate objections

Create opportunities from objectives

Maintain a positive attitude

Understand customer objections

Sources of Objections


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Sources of Objections

The customer may be objecting

due to lack of information

The customer may be setting acondition

The objection may be genuine

Indicators of Assertiveness


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Indicators of Assertiveness

Less Assertive More AssertiveAsk oriented Tell oriented

Go-along attitude Take-charge attitude

Cooperative Competitive

Supportive Directive

Risk avoider Risk takerMakes decisions slowly Makes decisions quickly

Lets others take initiative Takes initiative

Leans backward Leans forward

Indirect eye contact Direct eye contact

Speaks slowly, softly Speaks quickly, intensivelyMoves deliberately Moves rapidly

Makes few statements Makes many statements

Expresses moderate opinions Expresses strong opinions

Indicators of Responsiveness


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Indicators of Responsiveness

Less Responsive More ResponsiveControls emotions Shows emotions

Cool, independent Warm, approachable

Task oreinted People oriented

Use facts Uses opinions

Serious PlayfulImpersonal, businesslike Personable, friendly

Moves rigidly Moves freely

Limited use of gestures Gestures frequently

Formal dress Informal dress

Disciplined about time Undisciplined about timeControlled facial expressions Animated facial expressions

Monotone voice Many vocal inflections

The Social Style Matrix


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The Social Style Matrix

Low

Assertive

High

Assertive

Low Responsiveness

High Responsiveness

2

1

D C B A

1

2

3

4D C B A

4

3

Cues to Identify the Social Styles of


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Cues to Identify the Social Styles ofCustomers

Analyticals

Technical background

Achievement awards on

wall

Office is work-oriented,showing a lot of activity

Conservative dress

Like individual leisure

activities, such as reading,individual sports

DriversTechnical background

Achievement awards on

wall

No posters or slogans on

office walls

Calendar prominently

displayed

Desk placed so contact with

people is across desk

Conservative dress

Like group activities, such

as politics, team sports

Cues to Identify the Social Styles of


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Cues to Identify the Social Styles ofCustomers

Amiables

Liberal arts background

Office has friendly, open

atmosphere

Pictures of family displayedPersonal mementos on wall

Desk placed for open

contact with people

Casual or flamboyant dress

Like individual leisure

activities, such as reading,

individual sports

ExpressivesLiberal arts background

Motivational slogan on wall

Office has friendly, open

atmosphere

Cluttered, unorganized

desk

Desk placed for open

contact with people

Casual or flamboyant dress

Like group activities, such

as politics, team sports

Versatile and Non-Versatile Behavior


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Versatile and Non Versatile Behavior

Less Versatile

Limited adaptability to

others needs

Specialist

Well-defined interests

Firm of principle

Predictable

Single-minded

More VersatileAble to adapt to others

needs

Generalist

Broad interests

Negotiates issues

Unpredictable

Looks at many sides of

issue

Techniques to Alter Sales Behaviors


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Reducing Assertiveness

Ask for customers opinion

Acknowledge merits of

customers viewpoint

Listen without interruption

Be more deliberate dont rush

Let customer direct flow of

conversation

Reducing ResponsivenessBecome businesslike

Talk less

Restrain enthusiasm

Make decision based on

facts

Stop and think



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Increasing Assertiveness

Get to the point

Dont be vague or ambiguous

Volunteer information

Be willing to disagree

Take a stand

Initiate conversation

Reducing ResponsivenessVerbalize feelings

Express enthusiasm

Pay personal compliments

Spend time on relationships

rather than business

Socialize--engage in small talk

Use nonverbal communication


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