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Introduction to Operations Management
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Operations Management
Introduction to Operations Management Operations Management Organization Finance Operations Marketing The management of systems or processes that create goods and/or provide services
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Operations Management includes:
Introduction to Operations Management Operations Management includes: Forecasting Capacity planning Scheduling（时间进度安排） Managing inventories Assuring quality Motivating employees And more . . .
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Business Operations Overlap
Introduction to Operations Management Business Operations Overlap Marketing Operations Finance
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Stage of Production Value Added Value of Product
Introduction to Operations Management Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 Wheat transported to mill磨坊 $0.08 $0.23 Mill produces flour面粉 $0.38 Flour transported to baker面包厂 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $1.08 Grocery store displays and sells bread $0.21 $1.29 Total Value-Added
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Types of Operations Operations Examples Goods Producing
Introduction to Operations Management Types of Operations Operations Examples Goods Producing Farming, mining, construction , manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites
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Food Processor Inputs Processing Outputs Raw Vegetables Cleaning
Introduction to Operations Management Food Processor Inputs Processing Outputs Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment
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Hospital Process Inputs Processing Outputs Doctors, nurses Examination
Introduction to Operations Management Hospital Process Inputs Processing Outputs Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy
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Decision Making System Design – Capacity生产能力 Location选址
Introduction to Operations Management Decision Making System Design – Capacity生产能力 Location选址 arrangement of departments部门设置 product and service planning acquisition and placement of Equipment设备采购和布置
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Decision Making System operation – personnel inventory scheduling
Introduction to Operations Management Decision Making System operation – personnel inventory scheduling project management quality assurance
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Tradeoffs Models A model is an abstraction of reality.
Introduction to Operations Management Models A model is an abstraction of reality. – Physical Schematic Mathematical Tradeoffs What are the pros and cons of models?
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Quantitative Approaches
Introduction to Operations Management Quantitative Approaches • Linear programming Queuing Techniques Inventory models Project models Statistical models
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Recent Trends The Internet E-Business Supply Chain Management
Introduction to Operations Management Recent Trends The Internet E-Business Supply Chain Management
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Simple Product Supply Chain
Introduction to Operations Management Simple Product Supply Chain Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer
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Continuing Trends • Quality and process improvement Technology
Introduction to Operations Management Continuing Trends • Quality and process improvement Technology Globalization Operations strategy Environmental issues
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Competitiveness, Strategy, and Productivity
Chapter 2 Competitiveness, Strategy, and Productivity
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Competitiveness: How effectively an organization meets the needs of customers relative to others that offer similar goods or services
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Competitiveness Quality Price Time Flexibility Differentiation Service
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Examples of Distinctive Competencies
Banks, ATMs Convenience Location Disneyland Nordstroms Superior customer service Service Burger King Supermarkets Variety Volume Flexibility Express Mail One-hour photo Rapid delivery On-time delivery Time Sony TV Lexus, Cadillac Pepsi, Kodak, Motorola High-performance design or high quality Consistent quality Quality U.S. first-class postage Motel-6, Red Roof Inns Low Cost Price
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Economic conditions Political conditions Legal environment Technology
Key External Factors Economic conditions Political conditions Legal environment Technology Competition Markets
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Facilities and equipment Financial resources Customers
Key Internal Factors Human Resources Facilities and equipment Financial resources Customers Products and services Technology Suppliers
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Measures of Productivity
Table 2-4 Partial Output Output Output Output measures Labor Machine Capital Energy Multifactor Output Output measures Labor + Machine Labor + Capital + Energy Total Goods or Services Produced measure All inputs used to produce them
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Examples of Partial Productivity Measures
Table 2-5 Units of output per kilowatt-hour Dollar value of output per kilowatt-hour Energy Productivity Units of output per dollar input Dollar value of output per dollar input Capital Productivity Units of output per machine hour machine hour Machine Productivity Units of output per labor hour Units of output per shift Value-added per labor hour Labor Productivity
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Example--Labor Productivity
10,000 units/500hrs = 20 units/hour or we can arrive at a unitless figure (10,000 unit* $10/unit)/(500hrs* $9/hr) = Can you think of any advantages or disadvantages of each approach?
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Factors Affecting Productivity
Capital Quality Technology Management
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Factors Affecting Productivity
Standardization Use of Internet Computer viruses Searching for lost or misplaced items Scrap rates New workers Cuts in health benefits
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Factors Affecting Productivity
Safety Shortage of IT workers Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity
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Improving Productivity
Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Don’t confuse productivity with efficiency
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Introduction to Quality
Chapter 9 Introduction to Quality
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What does the term quality mean?
Quality Management What does the term quality mean? Quality is the ability of a product or service to consistently meet or exceed customer expectations.
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Performance - main characteristics of the product/service
Dimensions of Quality Performance - main characteristics of the product/service Aesthetics - appearance, feel, smell, taste Special features - extra characteristics Conformance - how well product/service conforms to customer’s expectations Safety - Risk of injury Reliability - consistency of performance
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Dimensions of Quality (Cont’d)
Durability - useful life of the product/service Perceived Quality - indirect evaluation of quality (e.g. reputation) Service after sale - handling of customer complaints or checking on customer satisfaction
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Examples of Quality Dimensions
Table 9-1
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Examples of Quality Dimensions (Cont’d)
Table 9-1
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The Consequences of Poor Quality
Loss of business Liability Productivity Costs
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Responsibility for Quality
Top management Design Procurement Production/operations Quality assurance Packaging and shipping Marketing and sales Customer service
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Internal Failure Costs
Costs of Quality Failure Costs - costs incurred by defective parts/products or faulty services. Internal Failure Costs Costs incurred to fix problems that are detected before the product/service is delivered to the customer. External Failure Costs All costs incurred to fix problems that are detected after the product/service is delivered to the customer.
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Costs of Quality (continued)
Appraisal Costs All product and/or service inspection costs. Prevention Costs All TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring
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Key Contributors to Quality Management
Table 9-6
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Malcolm Baldrige National Quality Award
Table 9-7 1.0 Leadership 2.0 Strategic Planning 3.0 Customer and Market Focus 4.0 Information and Analysis 5.0 Human Resource Development and Management 6.0 Process Management 7.0 Business Results
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Honoring W. Edwards Deming Japan’s highly coveted award
The Deming Prize Honoring W. Edwards Deming Japan’s highly coveted award Main focus on statistical quality control
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Chapter 10 Quality Control
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Centralized vs. On-site
Inspection Figure 10-2 How Much/How Often Where/When Centralized vs. On-site Inputs Transformation Outputs Acceptance sampling Process control
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Examples of Inspection Points
Table 10-1
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Statistical Process Control: Statistical evaluation of the output of a process during production
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Statistical Process Control
The Control Process Define Measure Compare to a standard Evaluate Take corrective action Evaluate corrective action
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Statistical Process Control
Variations and Control Random variation: Natural variations in the output of process, created by countless minor factors Assignable variation: A variation whose source can be identified
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Sampling Distribution
Figure 10-4 Sampling distribution Process distribution Mean
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Figure 10-5 Mean 95.44% 99.74% Standard deviation
Normal Distribution Figure 10-5 Mean 95.44% 99.74% Standard deviation
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Figure 10-6 Sampling distribution Process distribution Mean
Control Limits Figure 10-6 Sampling distribution Process distribution Mean Lower control limit Upper control limit
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Figure 10-8 UCL LCL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Out of control
Control Chart 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 UCL LCL Sample number Mean Out of control Normal variation due to chance Abnormal variation due to assignable sources Figure 10-8
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Control Chart for Attributes
p-Chart - Control chart used to monitor the proportion of defectives in a process c-Chart - Control chart used to monitor the number of defects per unit
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When observations can be placed into two categories.
Use of p-Charts Table 10-3 When observations can be placed into two categories. Good or bad Pass or fail Operate or don’t operate When the data consists of multiple samples of several observations each
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Use of c-Charts Table 10-3 Use only when the number of occurrences per unit of measure can be counted; non-occurrences cannot be counted. Scratches, chips, dents, or errors per item Cracks or faults per unit of distance Breaks or Tears per unit of area Bacteria or pollutants per unit of volume Calls, complaints, failures per unit of time
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