production and operations systems
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PRODUCTION and OPERATIONS SYSTEMS. Management 362. PART ONE. INTRODUCTION. Chapter One Production and Operations Management Chapter Two Productivity, Competitiveness, and Strategy. What does the operations function do?. - PowerPoint PPT PresentationTRANSCRIPT
CHAPTER ONEPRODUCTION AND OPERATIONS SYSTEMS
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PRODUCTION and OPERATIONS SYSTEMS
Management 362
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INTRODUCTIONPART ONE
•Chapter One•Production and Operations Management
•Chapter Two
•Productivity, Competitiveness, and Strategy
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What does the operations function do?
The operations function is responsible for the the creation of goods and services
Alternatively, the operations function transforms a set of inputs into a set of outputs
The operations function exists in some form in all firms
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Overlap of Basic Functional areas
Marketing
Production/Operations
Finance
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Types of Operations
Operations ExamplesGoods Producing Farming, mining, construction,
manufacturing, power generationStorage/Transportation Warehousing, trucking, mail
service, moving, taxis, buses,hotels, airlines
Exchange Retailing, wholesaling, banking,renting, leasing, library, loans
Entertainment Films, radio and television,concerts, recording
Communication Newspapers, radio and televisionnewscasts, telephone, satellites
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A Value-Added Model• The difference between the cost of inputs
and the value or price of outputs.
Inputs Land Labor Capital
Transformation/Conversion
process
Outputs Goods Services
Control
Feedback
FeedbackFeedback
Value added
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The Model Applied to a Food Processor
InputsTransformation/Processing Outputs
Raw Vegetables Cleaning Canned vegetablesMetal Sheets Making cansWater CuttingEnergy CookingLabor PackingBuilding LabelingEquipment
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The Model Applied to a Hospital
InputsTransformation/Processing Outputs
Examination Healthy patientsSurgeryMonitoringMedication
DoctorsNursesStaffBuildingMedical SuppliesEquipmentLaboratories
Therapy
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Accounting
IndustrialEngineering
Operations
Maintenance
Public Relations
PersonnelPurchasing
Distribution
Operations Interfaces Within the Organization
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Operations System Design
Decisions conerning– capacity– location– arrangement of work areas– product and service planning– acquisition and placement of processes
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Operations System Operation
Decisions concerning– personnel– inventory– scheduling– project management– quality– assurance
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Differentiating Features of Operations/Production Systems
Degree of standardization/customization Volume
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Manufacturing or Service?
Goods-Oriented
Act-Oriented
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Opportunity to correct High Lowquality problems
Measurement of productivity Easy Difficult
Uniformity of output High Low
Labor content Low High
Uniformity of input High Low
Customer contact Low High
Output Tangible Intangible
Characteristic Manufacturing Service
High
Key Differences Between Service and Manufacturing Operations
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What Does the Managerof the Operations Function Do?
Makes and implements decisions regarding the design, operation and control of the operations system
Applies analyses and tools to enhance the performance measures for the operations system
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Responsibilities of Operations Management
Products and services
• Planning– Capacity– Location–
– Make or buy– Layout– Projects– Scheduling
• Controlling– Inventory– Quality
• Organizing– Degree of centralization– Subcontracting
• Staffing– Hiring/laying off– Use of Overtime
• Directing– Incentive plans– Issuance of work orders– Job assignments
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Quantitative Approaches to Decision Making
Linear programming Queuing techniques Inventory models Project models Statistical models
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SuboptimizationSuboptimization
A Systems Approach to Decision Making
A system is a set of interrelated parts that must work together
The whole is greater than the sum of the parts
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Establishing Priorities
Determining what is critical Pareto phenomenon
– a vital few things are important in reaching a goal or solving a problem
– 80/20 rule - 80% of the problems are caused by 20% of the activities
How do we identify the vital few?
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Ethics
Worker safety Product safety Quality The environment The community Hiring and firing workers Closing facilities Workers’ rights
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Some Significant Events inOperations Management
Division of labor Standardized parts Scientific
management Motion study Gantt charts Coordinated
assembly line Statistical quality
control
Human relations movement
Management science Computer/Information
systems– MRP– CAD/CAM– Flexible Manufacturing
Systems (FMS)– Computer Integrated
Manufacturing (CIM)
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Recent Trends in Operations (1 of 2)
Global marketplace Operations strategy Total quality management Flexibility Time reduction Technology Worker involvement
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Recent Trends in Operations (2 of 2)
Reengineering Environmental issues Corporate downsizing Supply-chain management Lean production
– a system that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety
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