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PRODUCTION and OPERATIONS SYSTEMS

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  1. PRODUCTION and OPERATIONS SYSTEMS Management 362 MTSU Management 362

  2. PART ONE INTRODUCTION • Chapter One • Production and Operations Management • Chapter Two • Productivity, Competitiveness, and Strategy MTSU Management 362

  3. 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 MTSU Management 362

  4. Production/ Operations Marketing Finance Overlap of Basic Functional areas MTSU Management 362

  5. Operations Examples Goods Producing Farming, mining, construction , manufacturing, power generation Storage/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 television newscasts, telephone, satellites Types of Operations MTSU Management 362

  6. A Value-Added Model • The difference between the cost of inputs and the value or price of outputs. Value added Inputs Outputs Transformation/ Land Goods Conversion Labor Services process Capital Feedback Control Feedback Feedback MTSU Management 362

  7. The Model Applied to a Food Processor Transformation/Processing Inputs Outputs Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment MTSU Management 362

  8. Doctors Nurses Staff Building Medical Supplies Equipment Laboratories The Model Applied to a Hospital Transformation/Processing Inputs Outputs Examination Healthy patients Surgery Monitoring Medication Therapy MTSU Management 362

  9. Operations Interfaces Within the Organization MTSU Management 362

  10. Operations System Design • Decisions conerning • capacity • location • arrangement of work areas • product and service planning • acquisition and placement of processes MTSU Management 362

  11. Operations System Operation • Decisions concerning • personnel • inventory • scheduling • project management • quality • assurance MTSU Management 362

  12. Differentiating Features of Operations/Production Systems • Degree of standardization/customization • Volume MTSU Management 362

  13. Goods- Oriented Act- Oriented Manufacturing or Service? MTSU Management 362

  14. Key Differences Between Service and Manufacturing Operations Characteristic Manufacturing Service Output Tangible Intangible Customer contact Low High Uniformity of input High Low Labor content Low High Uniformity of output High Low Measurement of productivity Easy Difficult Opportunity to correct High Low quality problems High MTSU Management 362

  15. 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 MTSU Management 362

  16. Planning • Capacity – Location – – Make or buy – Layout – Projects – Scheduling – Controlling • Inventory – Quality – Responsibilities of Operations Management Organizing • Degree of centralization – Subcontracting – Products and services Staffing • Hiring/laying off – Use of Overtime – Directing • Incentive plans – Issuance of work orders – Job assignments – MTSU Management 362

  17. Quantitative Approaches to Decision Making • Linear programming • Queuing techniques • Inventory models • Project models • Statistical models MTSU Management 362

  18. Suboptimization 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 MTSU Management 362

  19. How do we identify the vital few? 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 MTSU Management 362

  20. Ethics • Worker safety • Product safety • Quality • The environment • The community • Hiring and firing workers • Closing facilities • Workers’ rights MTSU Management 362

  21. 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) Some Significant Events inOperations Management MTSU Management 362

  22. Recent Trends in Operations (1 of 2) • Global marketplace • Operations strategy • Total quality management • Flexibility • Time reduction • Technology • Worker involvement MTSU Management 362

  23. 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 MTSU Management 362

  24. MTSU Management 362