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Operations Management models for powerpoint presentations

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  1. Plan Act Do Check Operations Management... 100 Slides Powered by www.drawpack.com. All rights reserved.

  2. Key Words... Transformation Process – In-Output – Macro Operations – Physical Buffering – Operations Strategy – Process Design – Manufactoring – Supply Chain Management – Vertical Integration – Assembly Operations – Capacity Leading Strategy – Product Technology – CAD – Job Design – Capacity Planning – Inventory Management – Economic Order Quantity – Pareto Curve – ABC Analysis – Material Management – Master Production Schedule – Layouting – Production Plan – Just-in-Time – Quality Management – PDCA Cycle – Process Reengineering – Cause Effect Diagram – Pareto Diagram – Why Why Analysis – TQM – Operations Network – Buffer Inventory

  3. Engineering/ technical Operations management Product/service development Marketing Personnel Purchasing Accounting and finance Extent of the operations function Operations Function: Narrow Definition

  4. Engineering/ technical Operations management Product/service development Marketing Personnel Purchasing Accounting and finance Extent of the operations function Operations Function: Broad Definition

  5. Input transformed resources Materials information customers Environment Input Output The transformations process Goods and services Environment Facilities staff Input transforming resources Input-Transformation-Output Processes

  6. Pure Goods Tangible Can be stored Production precedes consumption Low customer contact Can be transported Quality is evident Crude oil production Aluminium smelting Specialist machine tool manufacturer Restaurant Computer systems services Pure Services Intangible Cannot be stored Production and consumption are simultaneous High customer contact Cannot be transported Quality difficult to judge Management consultancy Psychotherapy clinic Output: A Mixture of Goods and Services

  7. Information from customers Computer systems Survey and analysis staff Market forecasts, sales proposales and plans Marketing and sales Wood, steel, plastic, etc. Carpenters Machines Scenery and props Broadcasting and programme- making equipment Test and repair equipment Staff Adapted, maintained and repaired equipment Set and props manufacture Engineering Macro and Micro Operations

  8. Micro operations Marketing and sales Set and props manufacture Engineering Production units Finance and costing Preparing quotations Customer needs Business processes Customer needs fulfilled Programme production Promotional and advertising contracts Technical support contracts Music videos Size of each micro operation‘s contribution to each process Micro Operations and Business Processes

  9. Buffer The operation system Buffer e.g. Physical inventories of raw materials and components Material processors e.g. Physical inventories of finished goods e.g. Databases in national and local government Information processors e.g. On-line subscriber services of financial data e.g. Queues and waiting lists at hospitals Customer processors Not applicable Physical Buffering

  10. Staff Funds Personnel Accounting and finance The operation function Purchasing Marketing Suppliers Customers Product/services development Technical/ engineering Staff Process technology Organizational Buffering

  11. Implication Implication Low repetition Each staff member performs more of job Less systemization High unit costs High repeatability Specialization Systemization Capital intensive Low unit costs Low Low Low Low Volume Volume Volume Volume High High High High Flexible Complex Match customer needs High unit costs Well defined Routine Regular Low unit costs Changing capacity Anticipation Flexibility In touch with demand High unit costs Stable Routine Predictable High utilization Low unit costs Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit costs Time lag between production and consumption Standardized Low contact skills High staff utilization Centralization Low unit costs A Typology of Operations

  12. Environment The operation‘s strategic objectives Input transformed resources Operations strategy Operations strategy The operation‘s competitive role and position Materials information customers Operations strategy Input Output Goods and services Design Improvement Planning and control Facilities staff Input transforming resources Environment Operations Management and Strategy

  13. Operations as effector Being the „implementer“ of strategy Operations as follower Being „appropriate“ for strategy Operations as leader Being the „driver“ of strategy Strategy OPS OPS OPS OPS Strategy Strategy OPS Operations must „make strategy happen“ by trans- lating strategic decisions into operational reality Operations must support strategy by developing appropriate objectives and policies for the resources it manages Operations must provide the means to achieve competitive advantage The Three Roles of the Operations Function

  14. Give an operations advantage Increasing contribution of operations Redefine the industry‘s expectations Externally supportive Link strategy with operations Be clearly the best in the industry Internally supportive Adopt best practise Be as good as competitors Externally neutral Correct the worst problems Stop holding the organisazion back Internally neutral Stage 1 Stage 2 Stage 3 Stage 4 The ability to implement The ability to be appropriate The ability to drive strategy The Role and the Contribution of the Operations Function

  15. Low price high margin, or both Short delivery lead time Cost Dependable delivery High total productivity Speed Dependability Internal effects of the five performance objective Fast throughput Reliable operation Error-free processes Ability to change Quality Flexibility Frequent new product/services Wide product/services range Volume and delivery adjustments On-specification products/ services External and Internal Effects on the Performance Objectives

  16. The influence of the organization‘s customers What are order-winning, qualifying, and less important factors to them? The influence of the organization‘s competitors How does the operation react to changes in the way competitors behave? The relative importance of each performance objective to the operation The stage of the organization‘s products and services in their life cycle Are products and services at their introduction, growth, maturity or decline stage? The Influences on the Relative Importanceof Performance Objectives

  17. Competitive factors If the customer value these... Performance objectives Then, the operation will need to exel at these... Low price Cost High quality Quality Fast delivery Speed Reliable delivery Dependability Innovative products and services Flexibility (product/service) Wide range of products and services Flexibility (mix) The ability to change the timing or quantity of products and services Flexibility (volume and/or delivery) Different Competitive Factors and Performance Objectives

  18. Order-winnig factors Qualifying factors Less important factors Competitive benefit Competitive benefit Competitive benefit Performance Performance Performance Order-winning and Qualifying Objectives

  19. Competitor Activity and the Influence on Performance Objectives

  20. Introduction Growth Maturity Decline Product/ service first introduced to market Product/ service gains market acceptance Markets needs start to be fulfilled Market needs largely met Volume Slow growth in sales Rapid growth in sales volume Sales slow down and level off Sales decline Customers Innovators Early adoptors Bulk of market Laggards Competitors Few/ none Increasingly number Stable number Declining number Variety of product/service designs Possible high customization or frequent design changes Increasingly standardized Emerging dominant types Possible move to commodity standardization Likely order winners Product/ service characteristics performance or novelty Availability of quality products/ services Low price dependable supply Low price Likely qualifiers Quality Range Prince Range Range Quality Dependable supply Dominant operations performance objectives Flexibility Quality Speed Dependability Quality Cost Dependability Cost Effects of the Product/Service Life Cycle

  21. The general principles of design in operations The design of products and services The design of processes Concept generation Screening Network design Preliminary design Layout and flow Evaluation and improvement Process technology Job design Prototyping and final design Design Activities in Operations Management

  22. Concept Large number of design options Uncertainty regarding the final design Choice and evaluation screens Time Certainty regarding the final design Final design specification Design Screening

  23. Low High Variety Volume High Project Jobbing Batch Mass Continous Low Process Types in Manufacturing Operations

  24. Low High Variety Volume High Professional services Service shops Mass services Low Process Types in Service Operations

  25. Manufacturing operations process types Variety Service operations process types Volume Project Professional service None Less process flexibility than is needed so high cost Jobbing Service shop Batch Mass Less process flexibility than is needed so high cost Mass service Continuous None The natural line of process to volume variety characteristics Line of Fit of Process to Volume/Variety Characteristics

  26. Interpretation of expectation Expectations Marketing Product/service design Operations Customer Product/ service specification Product/ service The Customer-Marketing-Design Feedback Loop

  27. Concept generation Screening Preliminary design Evaluation and improvement Prototyping and final design The concept The package The process Stages of Product/Service Design

  28. Internal sources External sources Analysis of customer needs Marketing department Market surveys Suggestion from customers Suggestion from customer contact staff Actions of competitors Ideas from research & development Concept generation Concept Generation from Internal and External Sources

  29. Idea From The overall shape of the product or service Adventure holiday for young people Adventure holiday for young people Function The way in which the product or service operates • A holiday which is • One week long • Residential • Multi-activity • Adventure • In a safe but • Exciting envirnonment • For 14 to 16-year-old • Boys and girls • Away from their parents • A telefone which is • In lower quartile • price range • Multi-coloured • Fashionably styled • Easy to use • Dual position • Capable of use • with two carriers Purpose The need the product or service is intended to satisfy Benefits The advantage the product or service will bring to customers Idea From an Idea to a Concept

  30. Many concepts Marketing screen Operations screen Financial screen Acceptable concepts Concept Screening

  31. Cash Sales revenue Cash flow Delayed sales revenue Delayed cash flow Time Development costs Development costs of delayed project Delay in time to market Delay in financial breakeven Effect of a Delay in Time to Market

  32. P.M. P.M. P.M. P.M. P.M. Increasing project orientation Pure functional organization P.M. P.M. P.M. P.M. P.M. F.M. F.M. F.M. F.M. F.M. F.M. = Functional Manager F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. P.M. P.M. P.M. P.M. P.M. P.M. = Project Manager P.M. P.M. P.M. P.M. P.M. Pure project organization Organization Structures for Design Activity

  33. First-tier customers Second-tier customers Second-tier suppliers First-tier suppliers The Operation Supply side of the network Demand side of the network The total supply network The immediate supply network Total and Immediate Supply Networks

  34. Downstream vertical integration Raw materials supplier Component maker Assembly operation Wholesaler Retailer Upstream vertical integration Raw materials supplier Component maker Assembly operation Wholesaler Retailer Stages owned by the organization Vertical Integration for an Assembly Operation

  35. Narrow process span Raw materials supplier Component maker Assembly operation Wholesaler Retailer Wide process span Raw materials supplier Component maker Assembly operation Wholesaler Retailer Stages owned by the organization The Extent of Process Span of Vertical Integration

  36. Vertically integrated stages deal only with each other Raw materials supplier Component maker Assembly operation Wholesaler Retailer Vertically integrated stages also sell to/buy from other companies Raw materials supplier Component maker Assembly operation Wholesaler Retailer Stages owned by the organization The Balance of Internal/External Trade

  37. Supply-side factors Which vary in such a way as to influence cost as location varies The operation Demand-side factors Which vary in such a way as to influence customer services/ revenue as location varies • Labour costs • Land costs • Energy costs • Transportation costs • Community factors • Labour skills • Suitability of site • Image • Convenience for customer Supply- and Demand-Side Factors in Location Decisions

  38. Volume (units/week) Demand Capacity leads demand Capacity lags demand Time Capacity-Leading and Capacity-Lagging Strategies

  39. Manufacturing process types Basic layout types Service process types Fixed-position layout Project processes Professional services Jobbing processes Process layout Service shop Batch processes Cell layout Mass processes Product layout Mass service Continous processes Relationship Between Process and Basic Layout Types

  40. Variety Volume Low High Flow is intermittet High Fixed-position layout Process layout Cell layout Regular flow more feasible Product layout Flow becomes continuous Regular flow more important Low Volume Variety and Layout Type

  41. Amount of indirect resources included in the cell High e.g. Specialist process manufacturing cell Internal audit group in a bank e.g. Plant-within-a-plant manufacturing operation Maternity unit in a hospital Proportion of the direct resources needed to complete the transformation included in the cell Low High e.g. Small multi-machine manufacturing cell Joint reference and copying room in a library e.g. Complete component- manufacturing cell Lunch and snack produce area in supermarket Low Types of Cell

  42. Process technology Unco-ordinated Systemic Product technology Performance maximizing Product cost minimizing High Process technology Rate of innovation Product technology Low Introduction Growth Maturity Stage of development Relative Rates of Innovation for Product and Process Technology

  43. Variety Volume Low High High Stand-alone NC machine tool NC machining centres Flexible manufacturing systems Flexible trans- fer lines Dedicated systems Low Volume and Variety Characteristics

  44. Designing Controlling Handling Managing Computer-aided design (CAD) Computer-aided manufacturing (CAM) Automated guided vehicles (AGVs) Robotics Loading Scheduling monitoring INTEGRATED INTEGRATED The computer-based systems of other functions, suppliers and customers CAD/ CAM FMS INTEGRATED CIM INTEGRATED CIE Increasing Integration of Manufacturing Technologies

  45. Network services Home shopping Cashless services Video games Home banking Video conference Multimedia database Interactive video Telewriting Smart card comms Personal numbering Videotext Mobile videotext Telenewspaper Intelligent network Translation Artificial reality Virtual reality Hi-Fi telephony Teleworking Mobile videophone ATM Frame relay Speech fax Archiving Centrex SDH X400 Telepresence Voice messaging Image transmission Remote computing Voice conference Video conference Star services Alphanumeric paging Mobile telephony Colour fax Telemetry ISDN LinklineDDSN Satelite TV Cable TV Paging Teletext Multimedia Mobile telephony EDI CCTV Satelite services Colour TV Stereo radio 999 service Private circuit TV Telex Radio Telegram Telephony Telegraphie 1850 1880 1930 1970 1980 1990 2000 The Growth in Telecommunication Services

  46. What tasks? What sequence? Where to locate What skills Who else? How to interface with the facilities? How much autonomy What environmental conditions The Elements of Job Design

  47. before 1900 Division of labour 1900 Scientific management Operations job design Ergonomics Behavioural approach 1950 Empowerment Time 1980 1970 The Chronology of the Differente Approaches to Job Design

  48. Emphasis on managerial control Emphasis on commitment and engagement of staff Staff treated as a cost Division of labour Scientific management Ergonomics Behavioural approaches Empowerment Staff treated as a resource Self-managed method study Differente Approaches to Job Design

  49. Causes of seasonality Climatic Festive Behavioural Political Financial Social Some seasonal products and services • Construction materials • Beverages (beer, cola) • Foods (ice-cream, Christmas cakes) • Clothing (swimwear, shoes) • Gardening items (seeds, fertilizer) • Fireworks • Travel service • Holidays • Tax processing • Doctors (influenza epidemic) • Sport services • Education services Causes of Seasonality

  50. Periode t-1 Periode t Periode t+1 Current capacity estimates Current capacity estimates Updated forecasts Updated forecasts Outcome Decision Outcome Decision Actual demand and actual capacity How much capacity next period? Actual demand and actual capacity How much capacity next period? Shortages Queues inventory Shortages Queues inventory Capacity level Capacity level Capacity level Costs Revenues Working capital Customer satisfaction etc. Costs Revenues Working capital Customer satisfaction etc. Capacity Planning and Control