1. Operations Management Part IV

2. For Friday Friday recitations in KOBL 320 or KOBL S125
Section 101: 9:00 – 9:50 AM in KOBL S125 – Noah
Section 102: 10:00 – 10:50 AM in KOBL S125 – Whitney
Section 103: 11:00 – 11:50 AM in KOBL S125 – Whitney
Section 104: 12:00 – 12:50 PM in KOBL 320 – Jason
Section 105: 12:00 – 12:50 PM in KOBL S125 – Addison
Section 106: 1:00 – 1:50 PM in KOBL 320 – Vimi
Section 107: 1:00 – 1:50 PM in KOBL S125 – Chris
Section 108: 2:00 – 2:50 PM in KOBL 320 – Nhan
Section 109: 2:00 – 2:50 PM in KOBL S125 – Chris
Section 110: 3:00 – 3:50 PM in KOBL 320 – Addison

3. Reading Assignments Reading Assignments:
For this week – Read ‘Interceptor Body Armor’ pp. 1-56, 57 – 60 and 75 to 81 and read ‘End of the Line for GM’ stored in Additional Readings folder on CULearn
Quiz Wednesday, April 7th (open from 7 am to 11:30 am) will cover these readings

4. The Value Equation

5. Operations Flexibility
Types of Flexibility
Mass Customization
Pitfalls of Flexibility
Driving Flexibility

6. Sources of Competitive Advantage
Lower labor costs
COST-
BASED
MGMT
Economies of scale
Focused production
Flexible
production
Flexible
production
Increased
variety
TIME-
FLEX
MGMT
Increased
innovation
Fast response
time
Blackburn, “Time-based competition,’’ in Strategic Manufacturing, Moody (ed), Dow Jones-Irwin, Homewood IL, 1990.

7. Operations Flexibility
Flex’i*bil’i*ty: capable and adaptable to change.
Perspective of the producer: Flexibility
Perspective of the customer: Responsiveness

8. Factors Driving Flexibility
Shorter Product
Life-Cycles
Fragmented
Markets
Demand
Uncertainty
Increased New
Product Intro’s
Unexpected
Competitors
Marketplace Factors
Need for
FLEXIBILITY
Operations Factors
Pressures to
Reduce Inventories
Pressures to
Improve Quality
Process/Product
Simplification
Changing Supplier
Relationships
Smaller
Plants/Facilities

9. Like Quality, flexibility is not one-dimensional
Types of Flexibility
Like Quality, flexibility is not one-dimensional
1. Mix Flexibility
2. Changeover Flexibility
3. Modification Flexibility
4. Volume Flexibility
5. Rerouting/Program Flexibility
6. Resource Flexibility

10. Changeover Flexibility
Types of Flexibility
Mix Flexibility
Ability to produce a variety of products (goods/services) with the same operational processes.
Changeover Flexibility
Ability to rapidly change over equipment and technology for a variety of products

11. Modification Flexibility
Types of Flexibility
Modification Flexibility
Ability to implement rapid design changes; customize standard products to meet customer requirement
Volume Flexibility
Ability to adapt quickly and easily to changing demand patterns and volumes

12. Rerouting/Program Flexibility
Types of Flexibility
Rerouting/Program Flexibility
Ability to create products and add value in using alternative methods, routings, techniques.
Resource Flexibility
Ability to handle variations in input resources (e.g., raw materials) and to use alternative resources

13. Mass Customization
Delivering unique services in large quantities
Manufacturing unique products in large quantities
Offering customized services & products at (near) commodity prices
Customization varies from cosmetic to structural

14. Mass Customization & Technology
Product Structure
One-of-a-
Kind
Multiple
Products
Product
Lines
Standardized
Commodities
Job Shop
Flow Shop
(batch)
Assembly
Line
Continuous
Flow
Process Structure
Mass Customization

15. Mass Customization in Context

16. Pitfalls of Flexibility
Focus vs. flexibility
Specialists vs. generalists
Cost/flexibility trade-offs
Flexibility for whom and what?
When does the market reward flexibility?
Customization/responsiveness squeeze

17. Alter design of operations (process)
Driving Flexibility
Alter design of operations (process)
Single vs. multiple steps
Focused layouts
General purpose equipment
Assemble to order
vs. make to order/stock

18. Alter design of product
Driving Flexibility
Alter design of product
Design for manufacturability
Shared parts and components
Personnel with broad training
Information technology to assist
Cross-functional design teams

19. Driving Flexibility Manage demand Manage supply Improved forecasts
Yield management
Manage supply
Alter purchase contracts for quick delivery
Bring long lead-time items in-house
Process in smaller batches

20. Driving Flexibility Use slack resources
Yield management (induce demand)
Multi-tasking of employees/personnel

21. Flexibility has multiple dimensions
Take-Aways
Flexibility has multiple dimensions
Must strategically understand which are most important, and those that are less so
Flexibility involves process design, product design, sourcing design
Processes carefully married w/ products
To provide appropriate flexibility
Product / process matrix can help