1. Operations Management: Managing Vital Operations and Processes Chapter Fourteen Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Operations Management – The management of any aspect of the production system that transforms inputs into finished goods and services 14-2

3. The Purpose of Operations Management Figure 14.1 14-3

4. 14-4 What do customers want? Usually customers prefer: – A lower price to a higher price – High-quality products to low-quality products – Quick service to slow service – Many features over few features. – Products that are customized or tailored to their specific needs

5. 14-5 Customer Relationship Management Customer relationship management (CRM) – technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time

6. Impact of Increased Quality on Organizational Performance Figure 14.2 14-6

7. Facilities Layout, Flexible Manufacturing, and Efficiency Facilities Layout – The operations management technique whose goal is to design the machine-worker interface to increase production system efficiency. 14-7

8. 14-8 Facilities Layout, Flexible Manufacturing, and Efficiency Flexible Manufacturing – Operations management techniques that attempt to reduce the setup costs associated with a production system.

9. Figure 14.3 Three Facilities Layouts 14-9

10. 14-10 Facilities Layout Product layout – Machines are organized so that each operation is performed at work stations arranged in a fixed sequence. – Example: mass production systems where workers are stationary and a belt moves work to them.

11. 14-11 Facilities Layout Process Layout – Self contained work stations not organized in a fixed sequence. – Provides flexibility in making a wide variety of products tailored to customers.

12. 14-12 Facilities Layout Fixed-Position Layout – The product stays in a fixed spot and components produced at remote stations are brought the product for to final assembly. – Large jet aircraft assembly uses this type of layout.

13. Changing a Facilities Layout Figure 14.4 14-13

14. Just-in-Time Inventory and Efficiency Inventory – the stock of raw materials, inputs, and component parts that an organization has on hand at a particular time 14-14

15. 14-15 Process Reengineering and Efficiency Process Reengineering – The fundamental rethinking and radical redesign of the business process to achieve dramatic improvement in critical measures of performance such as cost, quality, service, and speed