Instructor: Spyros Reveliotis homepage: IE3104: Supply Chain Modeling: Manufacturing & Warehousing Spring 2006

“Course Logistics” TA: TBA Office Hours: MWF 1-2pm Grading policy: –Homework: 20% –Midterm I: 20% (Tentative Date: Wed., February 15) –Midterm II: 20% (Tentative Date: Wed., March 29) –Final: 30% (Date: TBA) –Class Participation: 10% –Exams closed-book, with 2 pages of notes per midterm exam and 6 pages for the final –No make-up exams and incompletes. Reading Materials: –Course Textbook: S. Nahmias, “Production and Operations Analysis”, 5 th Ed. McGraw Hill / IRWIN –Course slides and any other material posted at my homepage or circulated in class.

Course Objectives (What this course is all about?) How to design and operate manufacturing and warehousing facilities (and more…) –A conceptual description and classification of modern production and warehousing environments and their operation –An identification of the major issues to be addressed during the design, planning and control of the production and warehousing activity –Decomposition of the overall production planning and control problem to a number of sub-problems and the development of quantitative methodologies for addressing the arising sub-problems –Emerging trends, including the implications of a globalized and internet-based economy

Organizational Operations Organization / Production System: A transformation process (physical, locational, physiological, intellectual, etc.) Organization InputsOutputs Materials Capital Labor Manag. Res. Goods Services Supply or Value Chain / Network: Stage 5 Stage 4 Stage 3 Stage 2Stage 1 SuppliersCustomers

Productivity: Basic Organizational Performance Measure Productivity = Value produced / Input used = Output / (Labor + Material + Capital + Energy + Miscellaneous) Remarks: Typically both the numerator and the denominator are measured in $$$. If the output corresponds to actual sales, then productivity measures both effectiveness (doing the right thing) and efficiency (in the right way). From an economic standpoint, major emphasis is placed on the annual percentage change (hopefully increase) of productivity. For the entire US economy, the annual increase in productivity is higher than 2.5% (38% of this increase is due to capital improvements, 10% to labor improvements and 52% to management improvements). For the Chinese economy, this number has been more than 6% lately!

Major Productivity Variables and their contribution to productivity increase Labor –Better basic education –Better diet –Better social infrastructure like transportation and sanitation –Better labor utilization and motivation Capital –Steady and well-planned investments on equipment and its timely maintenance –Research & Development –Controlling of the cost of capital Management –Exploitation of new (information) technologies –Utilization of accumulated knowledge –Education Knowledge Society

Operations Management (OM) Definition: The study and improvement / optimization of the set of activities that create goods and services in an organization. Typical issues addressed: Service and product selection and design Quality Management Process and capacity design Facility design Facility Location Human resources and job design Inventory management Production planning and control Maintenance Supply-chain management

The major functional units of a modern organization Strategic Planning: defining the organization’s mission and the required/perceived core competencies Production/ Operations: product/service creation Finance/ Accounting: monitoring of the organization cash-flows Marketing: demand generation and order taking

Examples (borrowed from Heizer & Render)

Reading Assignment Chapter 1: Sections