1. 1 DECISION MAKING IN OM Chapter 2. 47- CORPORATE STRATEGY BUSINESS STRATEGY –COMPETITIVE PRIOROTIES OPERATIONS STRATEGY OPERATING DECISIONS

2. 2 COMPETITIVE STRAGTEGIES AND OPERATIONS STRATEGY Chapter 2 Competitive priorities: P, Q, A, F 50- Planning areas in operations = Operations Strategy. These were listed in a previous slide. –Process selection/ Vertical Integration decisions –Technology selection –Quality planning –Work force/Human resources planning –Capacity planning –Location of facilities –Layout of facilities –Supplier Selection

3. 3 PLANNING AREA 1: PRODUCT/SERVICE DESIGN Chapter 2 56- Information for design; QFD 58 Product developing process 59 –Technical-legal-environmental-ethical review –Market feasibility –Financial feasibility Manufacturabilty Service design –Service package 58

4. 4 Planning Area 2: Process Selection - Chapter 4 Process Types/Choice 129- –Job, batch, line and continuous –Job/batch process v. Line process Volume and variety Product-Process matrix 129

5. 5 PROCESS SELECTION Process determines other dimensions Line flow Flexible flow VolumeHighLow Variation Resource flexibility 134 Cap.intensity/Automation 136 Vertical Integration Customer Involvement 133

6. 6 PROCESS SELECTION Additional Concepts –Fixed v. Flexible automation Modern technologies: CAD, CAM, Robotics, FMS –Economies of scope 138 –Process re-engineering 141 –Process analysis and improvement 142 and chapter 5 Systematic approach 153; Six sigma approach 233 Documenting the process 155

7. 7 PROCESS SELECTION –Measurement and analysis tools 161- –Benchmarking 171 –Simulation 168 Process choice in services 122 –Customer contact 122 –Process complexity 125 –Degree of customization (divergence) 125 –Emphasis on front office/back office –Customer contact matrix for service processes 125

8. 8 Planning Area 3: Quality Planning Chapter 6 –Evolution of Quality Management Inspection based quality control (QC) Statistical Quality Control (SQC) Inspection alone does not improve quality Quality must be managed: P, O, D/L, C Quality improvement is a long term strategy QI is a company-wide effort Customer focus and supplier involvement TQM; continuous improvement 209 Deming and Juran Malcolm Baldrige Award 236 ISO 9000 certification 234

9. 9 USING QUALITY AS A COMPETITIVE WEAPON Improved quality could increases market share ….. and fetch higher prices ….and reduce costs The result is higher profits.

10. 10 WHY WOULD COSTS DECREASE WHEN QUALITY IS IMPROVED ? Costs of poor quality 207 Prevention costs207 Appraisal costs207 Internal failure costs207 External failure costs207 Short term effects Long term effects

11. 11 QUALITY PLANNING Customer perception of quality 209 –Conformance to specifications –Value –Fitness for use –Aesthetics –Durability –Reliability

12. 12 QUALITY PLANNING Definition of Value: meeting or exceeding customer expectations –customer expectations –management understanding –design of products/services, processes –delivery to customer –customer perception Customer satisfaction:

13. 13 QUALITY PLANNING Elements of TQM –Leadership (B1) Vision, cultural change Commitment, Involvement Strategic planning (B2) –Employee Involvement (B3)210 Participation Teams and teamwork 210 Types of teams Job design: enlargement, enrichment, rotation Empowerment

14. 14 QUALITY PLANNING –Elements of TQM Customer Focus (B4) Activities in customer focus Process management (B5) Measurement and Reporting (B6 and 7) –Statistical Quality Control 213 Variation in output 213 Control charts: attributes 224 variables 220 Acceptance sampling. Sampling plan and size 215 Process capability 227