1 Slides used in class may be different from slides in student pack Core services: basic things that customers want from products they purchase. The 4 Objectives of Operations Management 1. Cost 2. Quality 3. Speed 4. Flexibility

2 Slides used in class may be different from slides in student pack Operations Strategy Example Strategy Process Customer Needs Corporate Strategy Operations Strategy Decisions on Processes and Infrastructure More Product Increase Org. Size Increase Production Capacity Build New Factory

3 Slides used in class may be different from slides in student pack Order Qualifiers and Winners - Terry Hill  Order qualifiers –The basic criteria/characteristics that permit the firms products to be considered as candidates for purchase by customers  Order winners –The criteria/characteristics that differentiates the products and services of one firm from another.  Order losers –The criteria/characteristics that cause a firms’ products to be dropped from consideration

4 Slides used in class may be different from slides in student pack Example of Productivity Measurement  You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms.  Which productivity measure should be used?  Answer: Could be classified as a Total Measure or Partial Measure.  Is productivity increasing or decreasing?  Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = So, productivity is decreasing slightly.

5 Slides used in class may be different from slides in student pack Work Breakdown Structure Program Project 1Project 2 Task 1.1 Subtask Work Package Level Task 1.2 Subtask Work Package

6 Slides used in class may be different from slides in student pack Project Control Charts: Gantt Chart Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time Vertical Axis: Always Activities or Jobs Horizontal Axis: Always Time Horizontal bars used to denote time.

7 Slides used in class may be different from slides in student pack Network-Planning Models  A project is made up of a sequence of activities that form a network representing a project.  The path taking longest time through this network of activities is called the “critical path.”  The critical path provides a wide range of scheduling information useful in managing a project.  Critical Path Method (CPM) helps to identify the critical path(s) in the project networks.

8 Slides used in class may be different from slides in student pack Prerequisites for Critical Path Methodology A project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.

9 Slides used in class may be different from slides in student pack Concurrent Engineering Defined  Concurrent engineering – the simultaneous development of product design functions –open and interactive communication existing among all team members for the purposes of: » reducing time to market, »decreasing cost, and »improving quality and reliability

10 Slides used in class may be different from slides in student pack Figure 5.5

11 Slides used in class may be different from slides in student pack Designing for the Customer: Value Analysis/Value Engineering (VA/VE)  Achieve equivalent or better performance at a lower cost while maintaining all functional requirements defined by the customer. –Does the item have any design features that are not necessary? –Can two or more parts be combined into one? –How can we cut down the weight? –Are there nonstandard parts that can be eliminated?

12 Slides used in class may be different from slides in student pack Value Engineering Example $.22 ea. $.10 ea. 1 Piece 3 Pieces

13 Slides used in class may be different from slides in student pack Process Flow Structures  Job shop - small batches of a large number of different products –printing, machine shop, tool & die  Batch shop - standardized job shop, products produced in batches –clothing  Assembly Line - parts move from station to station at a controlled rate –microwaves, cars  Continuous Flow - continuous versus discrete flow –beer, paint

14 Slides used in class may be different from slides in student pack IV. Continuous Flow III. Assembly Line II. Batch I. Job Shop Low Volume, One of a Kind Multiple Products, Low Volume Few Major Products, Higher Volume High Volume, High Standard- ization Commercial Printer French Restaurant Heavy Equipment Coffee Shop Automobile Assembly Burger King Sugar Refinery Flexibility (High) Unit Cost (High) Flexibility (Low) Unit Cost (Low) Exhibit 5.10