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Operations andProductivity

PowerPoint presentation to accompany

Heizer and Render

Operations Management

PowerPoint slides by Jeff Heyl

11

2014 Pearson Education, Inc.

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Learning Objectives

Wen you complete tis capteryou sould be able to!

"# $efineoperations management%# &'plainthe distinction between

goods and services

(# &'plainthe difference betweenproduction and productivit

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Learning Objectives

Wen you complete tis capteryou sould be able to!

)# *omputesing"e-factor productivit+# *omputemu"tifactor productivit

,# -dentifythe critica" variab"es in

enhancing productivit

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Operations Management at

Hard Roc. *afe

#irst opened in 1$%1 &ow ' 1(0 restaurants in over (! countries

)oc* music memorabi"ia

+reates va"ue in the form of good food andentertainment

!,(00custom mea"s per da in r"ando

ow does an item get on the menu/

)o"e of the perations anager 2014 Pearson Education, Inc.

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Wat -s Operations

Management/

Productionis the creation of

goods and servicesOperations management 0OM1 is

the set of activities that create

va"ue in the form of goods andservices b transforming inputsinto outputs

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Organizing to Produce

2oods and 3ervices Essentia" functions

"# Mar.eting' generates demand%# Production4operations' creates

the product

(# 5inance4accounting' trac*s howwe"" the organi3ation is doing, pasbi""s, co""ects the mone

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Organizational *arts

5igure "#"

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5igure "#"

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5igure "#"

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6e 3upply *ain

5 g"oba" networ* of organi3ations andactivities that supp" a firm with goods andservices

embers of the supp" chain co""aborate toachieve high "eve"s of customer satisfaction,efficienc and competitive advantage.

5igure "#%

#armer 6rup 7ott"er 8istributor )etai"er producer

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Wy 3tudy OM/

1. is one of three ma9or functions of anorgani3ation, we want to stud how peop"eorgani3e themse"ves for productiveenterprise

2. :e want ;and need< to *now how goodsand services are produced

!. :e want to understand what operationsmanagers do

4. is such a cost" part of anorgani3ation

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Wat Operations

Managers $o7asic Management 5unctions

P"anningrgani3ing6taffing

=eading+ontro""ing

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6en 3trategic $ecisions

TABLE 1.2DECISION CHAPTER(S)

1. Design of goods and servies !" S#$$%e&en' !

2. anaging #a%i'* +" S#$$%e&en' +

,. Proess and a$ai'* design -" S#$$%e&en' -

. Loa'ion s'ra'eg* /

!. La*o#' s'ra'eg* 0

+. H#&an reso#res and o design 13

-. S#$$%*45ain &anage&en' 11" S#$$%e&en'

11/. Inven'or* &anage&en' 12" 1" 1+

0. S5ed#%ing 1," 1!

13. ain'enane 1-

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6e 3trategic $ecisions

"# $esign of goods and services

8efines what is re>uired of operations

Product design determines >ua"it,sustainabi"it and human resources

%# Managing 8uality

8etermine the customer?s >ua"it

e@pectations Estab"ish po"icies and procedures to

identif and achieve that >ua"it

6able "#%0cont#1

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(# Process and capacity design

ow is a good or service produced/

+ommits management to specifictechno"og, >ua"it, resources, andinvestment.

)# Location strategy

&earness to customers, supp"iers, andta"ent.

+onsidering costs, infrastructure, "ogistics,and government. 6able "#%0cont#1

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+# Layout strategy

Integrate capacit needs, personne" "eve"s,techno"og, and inventor

8etermine the efficient f"ow of materia"s,peop"e, and information.

,# Human resources and job design

)ecruit, motivate, and retain personne" withthe re>uired ta"ent and s*i""s.

Integra" and e@pensive part of the tota"sstem design.

6able "#% 0cont#1

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9# 3upply:cain management

Integrate supp" chain into the firm?s strateg.

8etermine what is to be purchased, from

whom, and under what conditions.;# -nventory management

Inventor ordering and ho"ding decisions.

ptimi3e considering customer satisfaction,supp"ier capabi"it, and production schedu"es.

6able "#%0cont#1

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Were are te OM Jobs/

Bechno"ogCmethods #aci"itiesCspace uti"i3ation

6trategic issues

)esponse time

Peop"eCteam deve"opment

+ustomer service

Dua"it

+ost reduction

Inventor reduction

Productivit improvement

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Opportunities6ig#re 1.,

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*ertifications

5PI+6, the 5ssociation for perationsanagement

5merican 6ociet for Dua"it ;56D#3# ?griculture@ Manufacturing@

and 3ervice &mployment5igure "#+100 '

0 '

0 '

40 '

20 '

0 'Percentof:or*force

10012(

1(01%(

1$001$2(

1$(01$%(

2000202( ;est.uiring signatureson credit card purchasesunder G2(

6aved secondsper transaction

+hange the si3e of the icescoop

6aved 14 secondsper drin*

&ew espresso machines 6aved 12 seconds

per shot

perations improvements havehe"ped 6tarbuc*s increase ear"revenue per out"et b G2(0,000 toG1,000,000 in seven ears.

Productivit has improved b 2%J, orabout 4.(J per ear.

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easure of process improvement

)epresents output re"ative to input

n" through productivit increasescan our standard of "iving improve

Productivity

Productivit KAnits produced

Input used

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Productivity *alculations

Productivit KAnits produced

=abor-hours used

4unitsC"abor-hour1,000

2(0

Labor Productivity

One resource inputsin'le)factor productivity

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Multi:5actor Productivity

utput

=abor ateria" Energ +apita" isce""aneous

Productivit K

5"so *nown as tota" factor productivit

utput and inputs are often e@pressed indo""ars

*ultiple resource inputsmulti)factor productivity

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Measurement Problems

"# Cualityma change whi"e the>uantit of inputs and outputsremains constant

%# &'ternal elements ma cause anincrease or decrease in productivit

(# Precise units of measure ma be"ac*ing

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Productivity Dariables

"# Labor- contributesabout 10J of theannua" increase

%# *apital- contributesabout !J of theannua" increase

(# Management-contributes about (2Jof the annua" increase

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Eey Dariables for -mproved

Labor Productivity1. 7asic education appropriate for the

"abor force

2. 8iet of the "abor force!. 6ocia" overhead that ma*es "abor

avai"ab"e

+ha""enge is in maintaining and enhancings*i""s in the midst of rapid" changingtechno"og and *now"edge

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Labor 3.ills

?bout alf of te "9:year:olds in te >#3# cannotcorrectly answer 8uestions of tis type

5igure "#9

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*apital

"=

;

,

)

%

=

Perc

entincrease

inp

roductivity

Percentage investment

"= "+ %= %+ (= (+

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Management

Ensures "abor and capita" are effective"used to increase productivit

Ase of *now"edge

5pp"ication of techno"ogies

Lnow"edge societies

8ifficu"t cha""enge

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Productivity and te

3ervice 3ector1. Bpica"" "abor intensive

2. #re>uent" focused on uni>ue individua"

attributes or desires!. ften an inte""ectua" tas* performed b

professiona"s

4. ften difficu"t to mechani3e and automate(. ften difficu"t to eva"uate for >ua"it

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&tics@ 3ocial Responsibility@

and 3ustainability

*allenges facing

operations managers! 8eve"op and produce safe, high->ua"it

green products

Brain, retrain, and motivate emp"oeesin a safe wor*p"ace

onor sta*eho"der commitments

om ch 1 - heizer 2015

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