1. Per AGRELL agrell@poms.ucl.ac.be Lecture 1
ESPO/IAG/POMS
PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations
Per AGRELL
Lecture 1

2. Outline Presentation What is OM? Processes and products
Instructor
Course outline
Grouping
What is OM?
Processes and products
Manufacturing Strategy
PROD 2800

3. Course outline Operations Strategy L 2 E 2
Competition, positioning, strategic trade-offs
Product and Process Design L 6 E 2
Process analysis, project design, quality
Planning and Control Methodology L 12 E 6
Long-range, medium-range and short-range planning
Supply Chain Design L 6 E 4
Inter-firm coordination, theory of constraints, chain design
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4. Learning methods Text book Lectures 26 h Exercise sessions 14 h
On-line material
Readings
Assignments
Exercise sessions 14 h
Cases
Case Summary
Case Presentation
Case Report
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5. What is operations management?
Production (transformation) system
Physical
Locational
Exchange
Storage
Physiological
Informational
System design, operation, improvement
Systematic analysis of organizational processes
Services and goods
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6. Core services Basic service dimensions operations management COST
FLEXIBILITY
DELIVERY
QUALITY
Basic
service dimensions
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7. Value-added services Differentiating service dimensions operations
CONSULTANCY
operations
management
INFORMATION
SALES SUPPORT
FIELD
SUPPORT
Differentiating
service dimensions
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8. Operations strategy 1. Business objectives 2. Market strategy
3. How are orders won on the market?
4. Choice of technology
5. Infrastructure
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9. Order qualifiers and order winners
Qualifies the firm as a potential vendor
Order winners
Successfully differentiates the firm for competitors
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10. Competitive dimensions
Price
Quality
Conformance
Delivery
Speed
Reliability
Flexibility
Volume flexibility
Product flexibility
Mix flexibility
Design
Value-added services
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11. Manufacturing strategy
1. Market segmentation in product groups
2. Market assessment per group
3. Find Qualifiers and Winners for each group.
4. Translate Winners into process requirements.
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12. Process dimensions Process Requirements Core Capabilities Process Type
Order Regime
Core Capabilities
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13. Process flow classification
Project
Jobbing
Batch
Line
Continuous processing
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14. Production order regimes
Design to order (DTO)
Specific design and manufacture for all customers
Engineer to order (ETO)
Changes to standard products are offered and produced
Make to order (MTO)
Production of standard product on receipt of order/call-off
Assemble to order (ATO)
Components MTS. Assembly made on receipt of order.
Make to stock (MTS)
Production to forecast. Order met from inventory.
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15. Product-process matrix
Few
Major
Products,
Higher
Volume
High
Volume,
Standard-
ization
Low
Volume,
One of a
Kind
Multiple
Products,
Low
Volume I.
Job
Shop
Flexibility (High)
Unit Cost (High)
Le Prof
II.
Batch
cafe
III.
Assembly
Line
Le Sablon
IV.
Continuous
Flow
Sugar
Refinery
Flexibility (Low)
Unit Cost (Low)
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16. Process positioning Horizontal Integration Vertical Integration
Vendors
Joint ventures
Vertical Integration
The Virtual Enterprise?
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17. Implications of process choice
Products and Markets
Type of product
Product range
Customer order size
Rate of product introductions
Order winners?
Order qualifiers?
Manufacturing
Nature of process technology
Focus
Investment and Cost
Level of capital investment
Level of inventory
Level of WIP
Cost drivers
Infrastructure
Organizational control
Organizational style
Required support expertise
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18. Strategic fit Commitment Communication Credibility Coherence
Focused manufacturing
PWP
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19. Examples Sports car market Competition European, road-use, private
Porsche
Ferrari
Jensen
Honda etc.
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20. OM challenges Bundling Value-added focus Ex: Automotive
Yesterday Today Tomorrow
Car Car + maint. Transport.
Maintenance
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21. Recapitulation Definition of OM Manufacturing strategy (Hill)
OQ, OW, process choice, implications
Product-Process Matrix (Hayes-Wheelwright)
Strategic fit (Skinner)
Focus, PWP
Service operations strategy
Bundling, integration, disintermediation
PROD 2800