CHAPTER 18 OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT (OM) n The Nature of Operations Management u Innovative managers do not just manage people--they must also manage technical resources and processes associated with the production of goods and services.

OM STRATEGY AND MANAGEMENT DEFINED u operations strategy is part of the strategic plan which defines the role, capabilities, and expectations for operations management. u operations management involves the managerial activities and techniques used to convert resources into products and services u Refer to Exhibit 18.1 and 18.2 in the textbook

ELEMENTS OF OPERATIONS PLANNING MODEL n Product and Service Design u design for manufacturability and assemble (DMFA) n Facilities Layout u process layout u production layout u cellular layout u fixed position layout

ELEMENTS OF OPERATIONS PLANNING MODEL n Production Processes and Technology u robotics u CAD/CAM u Flexible Manufacturing Systems u Computer-Integrated Manufacturing u Computers and the Delivery of Service n Facilities Location n Capacity Planning

THE MANAGEMENT OF OPERATIONS n Once strategic planning decisions about design, layout, process and technology, location, and capacity have been made, specific plans need to be developed for the overall production operations. This involves u Aggregate Planning u Master Scheduling u Structuring for Operations

THE AGGREGATE PLAN n Involves planning production activities and the resources need to achieve them. Flow charts and road maps the production process based on demand forecasts and capacity of the operations. n Serves as the basis for the Master Plan

THE MASTER SCHEDULE n Specifies the quantity and type of each item to be produced and how, when, where it should be produced. n Materials requirements are derived from the master schedule, and the schedule affects inventory levels

STRUCTURE FOR PRODUCTION n Decisions on how to organize by department, whether to incorporate teams, nature of authority relationships, and extent of decentralization n The desired result is an integrated, flexible organizational structure which can respond to changes in the aggregate plan

QUALITY AND PRODUCTIVITY CONTROLS n Productivity traditionally viewed in terms of output. Managers today realize productivity is high-quality units of output whether goods or services. n Quality measures related to after-the-fact determination of scraps, re-work, repair, and downtime. Now quality involves proactive design decisions which minimize these measures of quality.

QUALITY AND PRODUCTIVITY CONTROLS n Design Control--focus on creating new products engineered for reliability, functionality, and serviceability. n Materials Control--achieved through effective purchasing and Just-In-Time manufacturing practices. n Inventory Control--critical aspect of operations management due to costs associated with inventory.

QUALITY AND PRODUCTIVITY CONTROLS n Schedule Control--scheduling operations and tracking production. n Product Control--at one time focused on inspection of finished goods. TQM involves reducing probability and cost of poor quality with inspection and testing techniques prior to production.