mgsm 890 operations management l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
MGSM 890 Operations Management PowerPoint Presentation
Download Presentation
MGSM 890 Operations Management

Loading in 2 Seconds...

play fullscreen
1 / 56

MGSM 890 Operations Management - PowerPoint PPT Presentation


  • 306 Views
  • Uploaded on

MGSM 890 Operations Management. Session 7 - Scheduling & Control of Operations & Projects. This Evening’s Program. Scheduling & Control – Concepts & Techniques Information Systems in Managing Operations Enterprise Resources Planning (ERP) concepts Scheduling & Controlling Projects

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'MGSM 890 Operations Management' - beverly


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
mgsm 890 operations management
MGSM 890Operations Management

Session 7 - Scheduling & Control of Operations & Projects

this evening s program
This Evening’s Program
  • Scheduling & Control – Concepts & Techniques
  • Information Systems in Managing Operations
  • Enterprise Resources Planning (ERP) concepts
  • Scheduling & Controlling Projects
  • In-class Activities:
    • Problems 2, 5 on pp 639-640 in Chase et al
    • Problems 1, 2 & 4 on pp 89-90 in Chase et al
  • Case study analysis (“Keep patients waiting? Not in My Office” on pp 643 - 644)
  • Case Study for the week: The Rise & Demise of an Excellent Team
what is planning control
What is Planning & Control?

Supply of products & Services

Planning & Control

Demand for products & Services

The activities which reconcile supply & demand

The organisation’s resources

The organisation’s customers

p c as a function of the volume variety matrix
P&C as a Function of the Volume Variety Matrix

Variety

Short planning horizon

Timing decisions important

Detailed plans

Long planning horizons

Volume decisions important

Aggregated plans

Volume

planning and control functions
Planning and Control Functions
  • Loading How much to produce?
  • Sequencing In what order?
  • Scheduling When to produce?
  • Controlling Are we on plan?
loading comparing demand with available capacity
Loading – Comparing Demand with Available Capacity

Maximum Time Available

Normal Time Available

Not worked

Planned Time Available

Planned Running Time

Set-ups

Available Time

Actual Running time

Down Time

loading
Loading

Finite Loading

Possible to limit the load eg GP

Necessary to limit the load eg aircraft

Infinite Loading

Not possible to limit the load eg hospital

Not necessary to limit the load eg queue or flexible capacity

sequencing
Sequencing

Various sequencing rules can be deployed:

  • Customer priority;
  • Due Date
  • LIFO – last in first out
  • FIFO – first in fist out
  • Longest operation time first
  • Shortest operation time first
scheduling
Scheduling

Forward Scheduling

Start work as soon as job arrives

Advantage of flexibility, labour utilisation

High inventory costs

Backward Scheduling

Start work to finish when job is required

Advantage of lower inventory costs

Higher risk

JIT based

gantt charts
Gantt Charts

Mon

Tue

Wed

Thu

Fri

Mon

Tue

Job

5th

6th

7th

8th

9th

12th

13th

Table

Chairs

Units

Schedule

Progress

Time now

controlling
Controlling

Monitor deviations from plan and take corrective action.

Push system Material moved to next stage as soon as processed

Downhill metaphor

Consistent with MRP

Pull system Material moved to next stage only as needed

Uphill metaphor

Consistent with JIT

what is erp
What is ERP?
  • Enterprise Resources Planning

or

  • Eternal Revenue Provider?
  • Exaggerated Requirements Promise?
  • Extremely Repetitive Pandemonium?
where did erps come from
Where did ERPs come from?
  • Early IT systems (1960s – 1980s) were primarily stovepipe (standalone) systems
  • Organisations began to recognise the need for sharing information across the enterprise
  • Organisations began to focus on resources and their costs
  • Organisations had to optimise the utilisation of their scarce resources
where did erps come from cont
Where did ERPs come from (cont.)?
  • Integration of information / processes and systems became a requirement
  • MRP (Material Requirements Planning) systems evolved
  • Then MRP II (Manufacturing Resources Planning) systems came on the scene
  • But what was needed was something which could manage the business from end-to-end (i.e. as per the Value Chain)

ERP systems were seen as the solution

what were the promised benefits
What were the Promised Benefits?
  • Cost reduction
  • Increased productivity
  • Reduced cycle times
  • Increased quality & customer service
  • Managerial benefits
  • Organisational benefits
what is the reality
What is the Reality?
  • The average ERP implementation costs around $US11 million and takes around 23 months to complete
  • Almost two-thirds of organisational management consider that their ERP systems may hurt the organisation
  • The average large system is finished overall a year late and costs almost twice as much as the original estimate.
what are the problems
What are the Problems?
  • Poor project management
  • Lack of commitment by senior management
  • Poor governance of the implementation (the Lego Box effect)
  • Focus on processes rather than information
what are the problems cont
What are the Problems (cont.)?
  • Poor, inadequate understanding of the business and its information requirements
  • Inefficient & ineffective business processes
  • “Not Invented Here” syndrome
what are the problems cont20
What are the Problems (cont.)?
  • Poor fit between the tools, technology and the requirements
  • Lack of appreciation / recognition of the cascade effect in ERP systems
  • Underestimation of the effort required – resources, skills, communication, technology, training, post-implementation support, etc.
one of the biggest problems however is
One of the biggest problems however is . . .
  • The Lack of Proper Change Management over:
    • The project
    • The corporate culture
    • The people, and
    • The existing business processes

And communicating the changes effectively

the solution
The Solution

Seven things MUST be done right:

  • Planning
  • Senior Management Commitment
  • User Involvement & Training
  • Business Analysis
  • Project Management
  • Change Management, and
  • Constant Communication
the opportunities
The Opportunities

If you get your ERP system right, you can:

  • Reduce order-to-shipment times by 50% (Colgate-Palmolive)
  • Increase efficiencies of coal handling by more than 20% (DBCT)
  • Obtain improved timeliness of information, greater accuracy, better monitoring, quicker response for information requests and achieve competitive advantage (Philips, Shell, Orica)
the opportunities cont
The Opportunities (cont.)
  • Improved supply-demand linkages between remote locations and local offices (Unilever)
  • Improved international operations - multiple tax structures, currencies, accounting practices, etc. (Deutsche Bank)
  • 42% ROI in 2 years (Houston Independent School District)
in summary
In Summary . . .
  • ERP Systems can provide enormous benefits – but at a cost
  • Done badly, ERP Systems can cost millions (see recent press re Crane)
  • At worst, the organisation can go belly up
  • ERP systems don’t just support the business – they ARE the business
exercises
Exercises
  • pp 639-640 Chase et al
    • Problem 2 – Scheduling Hotel Receptionists
    • Problem 5 – Scheduling a list of jobs
  • pp 89-90 Chase et al
    • Problem 1 – prepare a CPM diagram
    • Problem 2 – Scheduling using CPM
    • Problem 4 – CPM for a construction project
case study keep my patients waiting not in my office
Case Study – Keep My Patients Waiting? Not in My Office
  • What features of the appointment scheduling system were crucial in capturing “many grateful patients”?
  • What procedures were followed to keep the appointment system flexible enough to accommodate the emergency cases, and yet able to keep up with the other patients’ appointments?
  • How were special cases such as latecomers and no-shows handled?
case study the rise and demise of an excellent team
Case Study – The Rise and Demise of an Excellent Team
  • What motivated the team up to the Documentation stage?
  • What happened then?
  • What forces were acting on the group?
  • What lessons can be learned here?
volume variety matrix
Volume -Variety Matrix

Variety

Projects

Volume

matrix of project types
Matrix of Project Types

Military Campaign

Oil Exploration

Uncertainty

Wedding

Building an Aircraft

Complexity

what is a project
What is a Project?
  • Unique set of objectives
  • Definite start point and end point
  • Governed by scope, cost and time goals
  • Aim to achieve results and disband
  • Contract to on-going management
what is management
What is Management?
  • The Purpose of Management is to plan, lead, organise and control (Fayol, 1916)
    • leadership of a team;
    • determination of team objectives;
    • communication control of a team with its client or sponsor;
    • comparison of achievement against set objectives;
    • authority to change what a team is doing; and;
    • resolution of conflict.
  • Planning and control are the core of project management
job design in a project environment
Job Design in a Project Environment
  • Project team

- Individuals from different departments within company

  • Matrix structure

- Team structure with members from different functional areas, depending on skills needed

  • Project manager

- Leader of project team

project planning tools
Project Planning Tools
  • Gantt Charts
  • Critical Path Method (CPM)
  • Program Evaluation and Review Technique (PERT)
gantt chart
Gantt Chart
  • Also known as a bar chart
  • Named after Henry Gantt (World War I shipbuilding)
  • Very useful for showing:
    • Amount of time involved
    • Sequence of activities
    • Dependencies between activities
  • Can also be used for:
    • Tracking progress of the project
    • Scheduling resources to activities
    • Identify milestones (major review points) for the project
gantt chart38
Gantt Chart

Activity

Design house and

obtain financing

Lay foundation

Order and receive

materials

Build house

Select paint

Select carpet

Finish work

1

3

5

7

9

Month

slide39

Activity

Design house

Lay foundation

Order and receive

materials

Build house

Select paint

Select carpet

Finish work

Month

0

2

4

6

8

Resources required

slide40
CPM
  • Critical Path Method (CPM)
    • Du Pont & Remington-Rand (1956)
    • based on deterministic task times
critical path
Critical Path
  • A path is a sequence of connected activities running from start to end nodes in network
  • The critical path is the path with the longest duration in the network
  • A project cannot be completed in a shorter time than the time of the critical path
activities organised in a project
Activities OrganisedIn a Project

Activity 1

  • Activity on Arrow
  • Activity on Node

Node 1

Node 2

Activity 1

Activity 2

project planning activities in series

1

2

3

Project PlanningActivities in Series

Construct forms

Pour concrete

project planning activities in parallel

1

2

3

Project PlanningActivities in Parallel

Construct forms

Pour concrete

Build walls

4

Dummy activity

project plan for a house
Project Plan For A House

3

Dummy

Lay foundation

0

Finish work

Build house

2

3

1

7

6

1

2

4

6

1

Design house and obtain financing

Order and receive materials

1

1

Select paint

Select carpet

5

slide46
PERT
  • Project Evaluation & Review Technique (PERT)
    • - First used by US Navy
    • - Booz, Allen & Hamilton
    • - Task time estimates are not deterministic, but have some probability distribution
slide47
PERT

(3,4,6)

(1,3,4)

(optimistic time, most likely time, pessimistic time)

slide48
PERT

Mean time = t (opt) +4 t (likely) + t (pess)

6

Variance = ( t(pess) - t(opt) )

36

Project Mean = Sum of Activity Means

Project Variance = Sum of Activity Variances

( Measure of Riskiness)

2

pert example
PERT Example

2

Equipment testing and modification

Equipment installation

System development

1

4

6

System Testing

Dummy

Recruiting

On-job training

Off-line

Training

3

5

slide50
PERT
  • Nominate the Critical Path for this project?
  • What is the mean duration of the Critical Path?
  • What is the variance of the Critical Path duration?
  • Could there be a better path than the Critical Path?
slide51
PERT

Optimistic Likely Pessimistic Mean Var

Installation 1 2 6 2.5 .69

Recruiting 1 4 5 3.7 .44

System development 1 2 4 2.2 .25

Equip. testing 2 3 8 3.7 1.0

Off-line training 4 5 8 5.3 .44

On-job training 2 5 7 4.8 .69

System testing 2 4 8 4.3 1.0

pert example52
PERT Example

2

Equipment testing and modification 3.7, 1.0

Equipment installation

2.5, .69

System Testing

4.3, 1.0

System development

2.2, .25

1

4

6

Recruiting

3.7, .44

Off-line

Training

5.3, .44

On-job training

4.8, .69

Dummy

3

5

which is the critical path
Which Is the Critical Path?

Probability

Path 2

1-3-4-5-6

Mean=11.0

Var=2.38

Mean=13.8

Var=1.57

Path1

1-2-4-5-6

Time

8.62

12.23

13.38

15.37

project management
Project Management . . .
  • Is more than just the numbers
  • Is not the same as Managing the Project
  • Don’t forget the human factor
  • The success of a project is (usually) inversely proportional to its size and timeframe
  • Need exit champions just as much as they need project champions
project management the problems pitfalls
Project Management – The Problems & Pitfalls
  • Focus on quantitative aspects
  • Project Reification – blind faith
  • Failure to adequately carry out critical project reviews
  • Throw more resources at the problem
  • What was the objective again?

Royer, Isabelle (2003), “Why Bad Projects Are so Hard to Kill”, Harvard Business Review, 81(2), pp48-56

good project management must include appreciate the importance of
Good Project Management must include & appreciate the importance of:
  • Business Impact
  • Risk Management
  • Issue Management
  • Documentation Management
  • Change Management
  • Resource Management
  • Communications Management
  • Scope Management

Matta, Nadim F & Ashkenas, Ronald N, (2003), “Why Good Projects Fail Anyway”, Harvard Business Review, 81(9), pp109-114