Operations management in manufacturing and service industries Chapter 11
Operations Management The value-creation activities that convert a company’s inputs into finished goods and services.
Materials Management The set of activities that control the flow of resources into and out of a firm’s operating system.
Creating a competitive advantage
Production Operation Systems Make-to-Order Alden Restaurant Furniture
Production Operation Systems Mass Production X-Box
Production Operation Systems Mass Customization Sears Optical
Facility Layouts Arranging the product process as efficiently as possible. Process layout: Grouping people by task; specialized equipment used to perform tasks. Product layout: Products produced by people arranged in an assembly line. Cellular layout: Small teams handle all aspects of production (e.g., construction, plumbers, or electricians)
Tyco’s factory layout
Bread factory layout
Furniture factory layout
Keeping track of production schedules Gantt chart Vermont Teddy Bear
Keeping track of production schedules PERT Chart: How long does it take to make a teddy bear? Start Cut material for cloth (10 min.) Sew clothes (10 min.) Embroider T-shirt (10 min.) Dress bear (15 min.) Package bear (5 min.) Ship bear (5 min.) Cut fur (10 min.) Stuff fur (30 min.) Cut accessories (5 min.) Sew accessories (10 min.)
Keeping track of production schedules PERT Chart: How long does it take to make a teddy bear? Start Cut material for cloth (10 min.) Sew clothes (10 min.) Embroider T-shirt (10 min.) Dress bear (15 min.) Package bear (5 min.) Ship bear (5 min.) Cut fur (10 min.) Stuff fur (30 min.) Cut accessories (5 min.) Sew accessories (10 min.) Critical Path: The longest path
Service Blueprint Components
Blueprint for Overnight Hotel Stay Service Hotel Exterior Parking Cart for Bags Desk Registration Papers Lobby Key Elevators Hallways Room Cart for Bags Room Amenities Bath Menu Delivery Tray Food Appearance Food PHYSICAL EVIDENCE Bill Desk Lobby Hotel Exterior Parking Arrive at Hotel Give Bags to Bellperson Call Room Service Check out and Leave Go to Room Receive Bags Sleep Shower CUSTOMER Receive Food Check in Eat Line of Interaction Greet and Take Bags (On Stage) Process Registration Deliver Bags Deliver Food Process Check Out CONTACT PERSON Line of Visibility (Back Stage) Take Food Order Take Bags to Room Line of Internal Interaction Registration System Registration System Prepare Food SUPPORT PROCESS
Total Quality Management (TQM) Continuous improvement of the product process by increasing the quality of product and lowering operating costs.
Key components of TQM Involve top management Employee involvement Focus on customer satisfaction Continuous improvement