Exploring Business 2.0 © 2012 Flat World Knowledge 1 Chapter 11: Operations Management in Manufacturing and Service Industries

Exploring Business 2.0 © 2012 Flat World Knowledge Chapter Objectives 1.Define operations management, and discuss the role of the operations manager in a manufacturing company. 2.Describe the decisions made in planning the production process in a manufacturing company. 3.Describe four major types of facility layouts: process, product, cellular, and fixed position. 4.Identify the activities undertaken by the operations manager in overseeing the production process in a manufacturing company. 5.Explain how to create and use both PERT and Gantt charts. 2

Exploring Business 2.0 © 2012 Flat World Knowledge Chapter Objectives 6.Explain how manufacturing companies use technology to produce and deliver goods in an efficient, cost- effective manner. 7.List the characteristics that distinguish service operations from manufacturing operations. 8.Describe the decisions made in planning the product delivery process in a service company. 9.Identify the activities undertaken to manage operations in a service organization. 10.Explain how manufacturing and service companies alike use total quality management and outsourcing to provide value to customers. 3

Exploring Business 2.0 © 2012 Flat World Knowledge Operations Management “…consists of all activities involved in transforming a product idea into a finished product, as well as those involved in planning and controlling the systems that produce goods and services.” 4

Exploring Business 2.0 © 2012 Flat World Knowledge The Transformation Process 5

Exploring Business 2.0 © 2012 Flat World KnowledgeManufacturing “…manufacturers…perform the same basic function: to transform resources into finished goods.” Operations Management: 1. Production Planning 2. Production Control 3. Quality Control 6

Exploring Business 2.0 © 2012 Flat World Knowledge Planning: Production Method Decisions  Make-To-Order  Mass Production  Mass Customization 7

Exploring Business 2.0 © 2012 Flat World Knowledge Facilities Decisions Site Selection Close to suppliers, customers, or both Supply of skilled workers Quality of life Resource costs Business climate Capacity Planning Layout Planning 8

Exploring Business 2.0 © 2012 Flat World Knowledge Facility Layout “…how equipment, machinery, and people will be arranged to make the production process...efficient...” 9

Exploring Business 2.0 © 2012 Flat World Knowledge Process Layout 10

Exploring Business 2.0 © 2012 Flat World Knowledge Product Layout 11

Exploring Business 2.0 © 2012 Flat World Knowledge Cellular Layout 12

Exploring Business 2.0 © 2012 Flat World Knowledge Materials Management “…encompass(es)... activities: purchasing, inventory control, and work scheduling.” 13

Exploring Business 2.0 © 2012 Flat World Knowledge Purchasing And Supplier Selection Purchasing Supplier Selection E-Purchasing Electronic Data Interchange 14

Exploring Business 2.0 © 2012 Flat World Knowledge Inventory Control  Just-In-Time  Material Requirements Planning  Manufacturing Resource Planning 15

Exploring Business 2.0 © 2012 Flat World Knowledge Work Scheduling  Master Production Schedule  Gantt Charts  PERT Charts 16

Exploring Business 2.0 © 2012 Flat World Knowledge Gantt Chart 17

Exploring Business 2.0 © 2012 Flat World Knowledge PERT Chart 18

Exploring Business 2.0 © 2012 Flat World Knowledge Technology Of Goods Production  Computer-Aided Design  Computer-Aided Manufacturing  Computer- Integrated Manufacturing  Flexible Manufacturing Systems 19

Exploring Business 2.0 © 2012 Flat World Knowledge Differences Between Manufacturers and Service Providers  Intangibility  Customization  Customer Contact Operational Efficiency...Important (to both) 20

Exploring Business 2.0 © 2012 Flat World Knowledge Service Provider Decisions What services/goods to offer? How to provide services? Where to locate business and what will it look like? How to forecast demand for services? 21

Exploring Business 2.0 © 2012 Flat World Knowledge Operations Planning Operations Processes Make-To-Order Make-To-Stock Facilities Site Selection Size/Layout Capacity Planning 22

Exploring Business 2.0 © 2012 Flat World Knowledge Managing Operations Scheduling Inventory Control 23

Exploring Business 2.0 © 2012 Flat World KnowledgeQuality “…the characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” 24

Exploring Business 2.0 © 2012 Flat World Knowledge Quality Management Or Assurance- TQM  Customer Satisfaction  Employee Involvement  Continuous Improvement Statistical Process Control Benchmarking  International Quality Standards ISO 9000 ISO

Exploring Business 2.0 © 2012 Flat World KnowledgeOutsourcing “…having outside vendors manufacture the actual product.” 26

Exploring Business 2.0 © 2012 Flat World KnowledgeOutsourcing Manufacturing Service 27