productivity opmgmt chpt20 100528121421 phpapp02

7/31/2019 Productivity Opmgmt Chpt20 100528121421 Phpapp02

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SEWP ZC 241:

PRINCIPLES OF

MANAGEMENT

Productivity,

Operations

Management, andTotal Quality

Management


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Management

After studying this chapter, you

should understand:

1. The nature of productivity issues and ways toimprove effectiveness and efficiency.

2. Production and operations management as anapplied case of managerial planning and control.

3. Techniques for improving productivity includingJIT and outsourcing.

4. The importance of quality, the nature of a varietyof techniques for improving quality, and lean

manufacturing.


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What is Productivity?

Productivity is the input-output ratio within a time

period with dueconsideration

for quality


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Production and OperationsManagement: Manufacturing

and Service

Production management was theterm used to refer to those activities

necessary to

manufacture

products


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Production and OperationsManagement: Manufacturing

and ServiceOperations management refers toactivities necessary to produce and

deliver a serviceas well as aphysical product


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WHAT IS OPERATIONS MGMT?

Business Function that:PLANS

ORGANIZES

COORDINATESCONTROLS

the RESOURCES needed to provide

companys GOODS and SERVICES.

OPERATIONS MANAGEMENT is aMANAGEMENT FUNCTION.


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Definitions of tasks:

PLANNING:

Activities that establish a course of

action. Guidesfuturedecision making. ORGANIZING:

Activities that establish astructureoftasks and authority.

CONTROLLING:

Activities that ensure that actualperformance is inaccordancewith

planned performance.


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Operations managementINVOLVES:

People

EquipmentTechnology

Information

OPERATIONS MANAGEMENTis a CORE FUNCTION of any

company.


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ROLE OF OPERATIONS MGMT:

OPERATIONS SYSTEM

INPUTS

COMPARISON:ACTUALVERSUSDESIRED

OUTPUTS

CONVERSION/TRANSFORMATION

PROCESS

ADJUSTMENTNEEDED

MONITOROUTPUT

RANDOMFLUCTUATIONS

To TRANSFORM companys INPUTS into FINISHEDGOODS or SERVICES


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COMPONENT DEFINITIONS

INPUTS:

Human Resource

Facilities and processes

Materials

Technology

Information

OUTPUTS:

Physical Goods

Services


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OPERATION SYSTEMS:

Part of orgn. That produces organizations

physical goods and services. CONVERSION/ TRANSFORMATION

PROCESS:

The process of changing INPUTS to

OUTPUTS.

TECHNOLOGY:

The level of scientific sophistication in plant/

equipement or skills in the CONVERSIONPR E ..


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RANDOM FLUCTUATIONS:Unplanned/ Uncontrollable influencesthat cause differences betweenACTUAL and EXPECTED output.Can be EXTERNAL or INTERNAL.

VALUE ADDED:

Net increase between FINAL VALUEof outputs compared to SUM ofVALUE OF INPUTS.Greater the value, more profitable the

business.


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FEEDBACK:

INFORMATION in the control process

that allows management to decidewhether organizational activitiesrequire ADJUSTMENT.


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DEFINITION OF OPERATIONS

MANAGEMENT:

OPERATIONS MANAGEMENT:

THE MANAGEMENT OF THECONVERSIONPROCESS

WHICH CONVERTSINPUTS

INTODESIRED OUTPUTS OFGOODS AND SERVICES.


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DISTINCTIONS BETWEEN

MANUFACTURING & SERVICE

OPERATIONS Organizations divided into 2 broadcategories based on their OUTPUTS.

Primary distinctions

Manufacturing organizations Service organizations

Produces physical tangiblegoods.

Produces intangible goods(Services)

Can be stored asINVENTORY before theyrae needed.

Cannot be producedAHEAD of time.

Customers have noDIRECT CONTACT with the

conversion process.

Customers are presentduring CREATION or

DELIVERY of SEVICES.


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TYPE OF GOODS

MANUFACTURING- TANGIBLE

SERVICES-INTANGIBLE
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DEGREE OF CUSTOMER

CONTACT

MANUFACTURING- LOW SERVICES- HIGH
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INVENTORY

MANUFACTURING- STORED AHEADOF USAGE

SERVICES- REALTIME

&
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CHARACTERISTICS: MFG &

SERVICES ORGANIZATIONS


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OVERLAPS

In many organizations, there is an overlap ofmanufacturing and services:

Computer + Service

Car+ Service

There are certain organizations, which have:

Low Customer Contact.

Highly Capital Intensive.

Yet, they provide a SERVICE.

These are called QUASI MANUFACTURINGORGANIZATIONS


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QUASI MANUFACTURING

ORGANIZATION: EXAMPLE


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INDIA POSTS

Provides SERVICE- sppedy, reliable deliveryof letters, documents & packages.

Output is intangible and cant be stored ininventory.

Customer not present during creation ofservice.

Highly capital intensive- 1,20,000+ PostOffices, telecom equipment, delivery trucks.

MANY ORGANIZATIONS FALL IN BETWEEN

MANUFACTURING & SERVICES


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Operations Management Systems

Steps in Pro ct an Pro ction


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Steps in Pro uct an Pro uctionDesign

1.Create product ideas by searching forconsumer needs and screening the variousalternatives

2. Select the product on the basis of variousconsiderations, including data from marketand economic analyses, and make ageneral feasibility study

3. Prepare a preliminary design byevaluating various alternatives, taking intoconsideration reliability, quality, andmaintenance requirements

S i P d d P d i


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Steps in Product and Production

Design

4. Reach a final decision by developing,testing, and simulating the processes to see ifthey work

5. Decide whether the enterprise's current

facilities are adequate or if new or modifiedfacilities are required

6. Select the process for producing theproduct; consider the technology and the

methods available

7. After the product is designed, prepare thelayout of the facilities to be used, plan thesystem of production, and schedule the

various things that must be done


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PROCESS OFCONVERTING AN IDEAINTO A PRODUCT OR A

SERVICE


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INNOVATION: DEFINITION Innovation means a new way of doing

something.

Something new must be substantiallydifferent to be innovative, NOT aninsignificant change.

Linked to performance and growththrough improvements in efficiency,productivity, quality, competitive

positioning, market share.
http://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Qualityhttp://en.wikipedia.org/w/index.php?title=Competitive_positioning&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Competitive_positioning&action=edit&redlink=1http://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/w/index.php?title=Competitive_positioning&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Competitive_positioning&action=edit&redlink=1http://en.wikipedia.org/wiki/Qualityhttp://en.wikipedia.org/wiki/Productivity


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COMPONENTS OF INNOVATION

BASIC RESEARCH

APPLIED RESEARCH

DEVELOPMENT

IMPLEMENTATION


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BASIC RESEARCHResearch for advancement

of scientific knowledge that

has no specific commercialuse.

Maybe, of present or potential interest

APPLIED RESEARCHResearch for advancement of

scientific knowledge that has specificcommercial uses.


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DEVELOPMENTTechnical activity concerned

with translating basic and

applied research results intoproducts or processes.

IMPLEMENTATION

Activities involved with designing andbuilding pilot models, equipment andfacilities, and initiating marketingchannels for products or servicesemerging from R & D


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Screening

Economic Analysis

Development

Testing

CommercialUse

DECAY CURVE FOR NEW PRODUCT

IDEAS


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TYPES OF PROCESS TECHNOLOGIES

PROJECTS

JOB SHOP

BATCH

ASSEMBLY LINE

CONTINOUS PLANTS


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CHARACTERISTICS: PROJECT

TECHNOLOGY

Unique Product Requirement of customer tailor

made

Products not standardized.

Flexible conversion process.

High degree of problem solvingrequired.

Teamwork and coordinationessential.


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EXAMPLES: PROJECT TECHNOLOGY


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CHARACTERISTICS: JOB SHOP

TECHNOLOGY

Small batches of different products.

High degree of customization.

Unique process steps or Routing

Each product uses small portion ofresources.

Elaborate job tracking and control systemsrequired.

High lead time for access to machines.

Equipment overloaded or under loaded.


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EXAMPLES: JOB SHOP

TECHNOLOGY


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CHARACTERISTICS: BATCH

TECHNOLOGY

Higher standardization than job shop.

Several products producedrepeatedly and in large volumes.

Certain parts/ components/ itemsproduced and stocked withoutcustomers orders.

System flexibility for small volume/high variety products.

No product sufficiently dominant to

warrant dedicated equipment


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EXAMPLES: BATCH TECHNOLOGY


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CHARACTERISTICS: ASSEMBLY LINE

TECHNOLOGY

Narrow range of specialized products.

Relatively stable product designs.

Specialized equipment, human skills

and management systems.

Beyond a range, manufacturing system

is inflexible.

EXAMPLES ASSEMBLY LINE


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EXAMPLES: ASSEMBLY LINE

TECHNOLOGY

CHARACTERISTICS CONTINOUS FLOW


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CHARACTERISTICS: CONTINOUS FLOW

TECHNOLOGY

Products manufactured in continuous,

endless flows.

Highly standardized products.

Normally highly capital intensive.

High degree of automation and process

controls required.

High start up costs.

EXAMPLES CONTINOUS FLOW


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EXAMPLES: CONTINOUS FLOW

TECHNOLOGY


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SERVICE PROCESS TECHNOLOGIES

As diverse as productprocess technologies.

Services vary:

In amount of customer

contact.

In intensiveness of labour

versuscapital.


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CUSTOMER CONTACT

Occurs in TWO ways:Involvement during

designing or customizing

service

During creation of service.


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CUSTOMER CONTACT Basis for categorizing services (high

to low)

Trade off between flexibility andoperational effectiveness.

High contact process technology:

More flexible, efficiency lowsinceconversionprocesscantbe

standardized. Low contact process technology:

Less flexible, but operations morestandardized and efficient..

TYPES OF SERVICE PROCESS


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TYPES OF SERVICE PROCESS

TECHNOLOGIES

LOW CUSTOMER CONTACTHIGH CUSTOMER

CONTACT

CAPITALINTENSIVE

QUASIMANUFACTURING

CUSTOM SHOPSERVICES

LABOURINTENSIVE

MASS SERVICES PROFESSIONALSERVICES

CHARACTERISTICS: SERVICE


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PROCESS TECHNOLOGIES

QUASI MANUFACTURING:

Rigidly standardized service.

Concerned with reliable delivery schedule.

Major capital intensive decisions.

MASS SERVICES:

Scheduling of human resource critical.

Standardized services.

Emphasis on training & development..



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PROCESS TECHNOLOGIES

CUSTOM SHOP SERVICE:

Professional staff, customized service.

Relatively capital intensive conversiontechnology..

Emphasis on cost containment and capitalinvestment decisions.

MASS SERVICES:

Customized service. Intensive interaction between customer and

professional personnel.

Professional skills critical.

LABOUR VERSUS CAPITAL


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LABOUR VERSUS CAPITAL

INTENSIVENESS

CAPITAL INTENSIVE LABOUR INTENSIVE

Dominant concerns:Employee scheduling &

training

Dominant concerns:Technological

advancements & capitalinvestments


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Tools and Techniques for

Improving Productivity

Inventory Planning and Control

Just-in-Time Inventory System

In the just-in-time (JIT) inventory method, thesupplier delivers the components and parts tothe production line "just in time" to beassembled

OutsourcingOutsourcing means that production and

operations are contracted to outside vendorsthat have expertise in specific areas

What is Operations


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Whatis Operations

Research?

Operations research is theapplication of scientificmethods to the study of

alternatives in a problemsituation, with a view toobtaining a quantitative basis

for arriving at a best solution

What is Operations


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Whatis Operations

Research?

An interdisciplinary branchof applied mathematics andformal sciencethat usesmethods such asmathematical modeling,

statistics, and algorithms toarrive at optimal or nearoptimal solutions to complex

roblems. What is Operations
http://en.wikipedia.org/wiki/Mathematicshttp://en.wikipedia.org/wiki/Formal_sciencehttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Algorithmshttp://en.wikipedia.org/wiki/Algorithmshttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Formal_sciencehttp://en.wikipedia.org/wiki/Mathematics


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Whatis OperationsResearch?


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OR APPLICATIONS

statistics,

optimization,

probability theory, queuing theory,

game theory,

graph theory,

decision analysis, and simulation
http://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Optimization_(mathematics)http://en.wikipedia.org/wiki/Probability_theoryhttp://en.wikipedia.org/wiki/Queuing_theoryhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Graph_theoryhttp://en.wikipedia.org/wiki/Decision_analysishttp://en.wikipedia.org/wiki/Simulationhttp://en.wikipedia.org/wiki/Simulationhttp://en.wikipedia.org/wiki/Decision_analysishttp://en.wikipedia.org/wiki/Graph_theoryhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Queuing_theoryhttp://en.wikipedia.org/wiki/Probability_theoryhttp://en.wikipedia.org/wiki/Optimization_(mathematics)http://en.wikipedia.org/wiki/Statistics


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What is Value Engineering?

Value engineering, is theprocess of analyzing theoperations of the product or

service, estimating the valueof each operation, andattempting to improve that

operation by trying to keepcosts low at each step or part


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What is Work Simplification?

Work simplification is theprocess of obtaining the

participation of workersin simplifying their work


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What is a Quality Circle?

A quality circle (QC) is agroup of people from thesame organizational area

who meet regularly to solveproblems they experience atwork

Total Quality Management


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Total Quality Management

(TQM)

Total quality management (TQM)is the organization's long-termcommitment to the continuous

improvement of quality,throughout the organization andwith the active participation of allmembers at all levels, to meetand exceed customerexpectations

Mass Production vs


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Mass Production vs

Lean Production

MASS PRODUCTION

Sporadic andinconsistent

improvements

Satisfied withgood enough

High inventory

acceptable

LEAN PRODUCTION

Continuousimprovements(kaizen) with

strategicbreakthroughs

Aim at zero defects

Just-in-timeinventory system

Mass Production vs


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Mass Production vs

Lean Production

MASS PRODUCTION

Me management

with emphasis on

individualperformance

Workersconsidered thecause of poor

quality

LEAN PRODUCTION

We or

team

management

Everyone isthe problem;especially

mana ement

C /C


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CAD/CAM

CAD/CAMs help engineers design

products much more quickly than they

could with the traditional paper-and-pencilapproach


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THANK YOU!!!

HAVE A GREATWEEKEND

productivity opmgmt chpt20 100528121421 phpapp02

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