1. Business Essentials, 7th Edition Ebert/Griffin
Operations Management and Quality
Business Essentials, 7th Edition Ebert/Griffin
Instructor Lecture PowerPoints
PowerPoint Presentation prepared by
Carol Vollmer Pope Alverno College
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L E A R N I N G O B J E C T I V E S
After reading this chapter, you should be able to:
Explain the meaning of the term production or operations.
Describe the three kinds of utility that operations processes provide for adding customer value.
Explain how companies with different business strategies are best served by having different operations capabilities.
Identify the major factors that are considered in operations planning.
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4. L E A R N I N G O B J E C T I V E S (cont’d)
After reading this chapter, you should be able to:
Discuss the information contained in four kinds of operations schedules—the master production schedule, detailed schedule, staff schedule, and project schedule.
Identify the activities involved in operations control.
Identify the activities and underlying objectives involved in total quality management.
Explain how a supply chain strategy differs from traditional strategies for coordinating operations among firms.
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5. What in It for Me?
By understanding this chapter’s methods for managing operations and improving quality, you can benefit in two ways:
As an employee, you’ll have a clearer picture of who your customers are and what they want and how your job depends on the services they receive from you
You’ll better understand how companies around you—even successful firms—have to change production methods whenever they adopt new business goals to remain competitive
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6. What Does Operations Mean Today?
Operations (Production)
All the activities involved in making products—goods and services—for customers
Service Operations (Service Production)
Provide intangible and tangible service products
Goods Operations (Goods Production)
Produce tangible products
Operations managers create utility for customers through production, inventory and quality control.
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7. Creating Value Through Operations
Utility
The ability of a product to satisfy a want or need
Form utility
Time utility
Place utility
Operations (Production) Management
The systematic direction and control of processes that transform resources into finished services and goods that create value for and provide benefits to customers
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8. Differences Between Service and Goods Manufacturing Operations
Goods are produced, services are performed
Service operations differ from manufacturing operations in that service operations:
Involve interacting with consumers.
Are sometimes intangible and unstorable.
Involve a customer’s presence in the process.
Involve certain service quality considerations.
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9. Goods Production Processes
Operations Processes
Operations Process
A set of methods and technologies used to produce a good or a service
Goods Production Processes
Make-to-order processes
Make-to-stock processes
Service Production Processes
Extent of Customer Contact
Low-contact systems: low customer involvement
High-contact systems: high customer involvement
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10. Business Strategy as the Driver of Operations
Businesses with contrasting business strategies choose different operations capabilities—the activities or processes that production must perform especially well, with high proficiency
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11. TABLE 7.1 Business Strategies That Win Customers for Four Companies
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12. Operations Planning Capacity Planning Location Planning
Capacity: The amount of a product that a company can produce under normal conditions
Planning deals with determining how much can be produced
Location Planning
Location affects production costs and flexibility
Planning deals with determining where it will be produced
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13. Operations Planning (cont’d)
Layout Planning
The layout of machinery, equipment, and supplies determines whether a company can respond efficiently to demand for more and different products or whether it finds itself unable to match competitors’ speed and convenience
Planning deals with determining how the product will be produced
Process layouts
Product layouts
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14. FIGURE 7.1 Operations Planning and Control
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15. Quality Planning What Is Quality?
The combination of “characteristics of a product or service that bear on its ability to satisfy stated or implied needs” (American Society for Quality)
Quality planning begins when products are designed: goals are set for performance and consistency
Quality planning includes deciding what constitutes a high-quality product and determining how to measure these quality characteristics
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16. Methods Planning
Managers identify each production step and methods for performing it.
They reduce waste and inefficiency by examining procedures in an approach called methods improvement.
They reduce waste and inefficiency by improving process flows.
A detailed description, often a process flowchart, helps managers organize and record information.
They attempt to improve customer service.
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17. Operations Scheduling
Identifying times when specific production activities will occur
Kinds of Planning Schedules
Master schedule: Shows which products will be produced, and when, in upcoming time periods
Detailed schedule: Shows day-to-day activities that will occur in production
Staff schedules: Show who and how many employees will be working, and when
Project schedules: Coordinate completion of large-scale projects
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18. FIGURE 7.3 Example Partial Master Production Schedule (Tons of Each Product to be Produced)
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19. Project Scheduling Gantt Chart
Breaks down projects into steps to be performed
Specifies the time required to complete each step
A Project Manager uses the Gantt chart to:
List all activities to be performed
Estimate the time required for each step
Record the progress on the chart
Check the progress against the time scale on the report
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20. Figure 7.4 Gantt Chart
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21. Operations Control Operations Control
Requires managers to monitor performance by comparing results with detailed plans and schedules.
Follow-up: Checking to ensure that production decisions are being implemented—is a key and ongoing facet of operations.
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22. Materials Management Activities
The process by which managers plan, organize, and control the flow of materials from sources of supply through distribution of finished goods
Materials Management Activities
Supplier selection
Purchasing
Transportation
Warehousing
Inventory control
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23. Lean Production Systems: Just-in-Time Operations
Lean Production Systems Goals
Smooth production flows avoid inefficiencies
Elimination of unnecessary inventories
Continuous improvement in production processes
Just-in-Time (JIT) Production
Bringing together all needed materials only when they are required, creating fast and efficient responses to customer orders
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24. Benefits of Just-in-Time Production
Reduces the number of goods in process (goods not yet finished)
Minimizes inventory costs
Reduces inventory storage space requirements
Replaces stop-and-go production with smooth movement
Disruptions are more visible and get resolved more quickly
Continuous improvement of the process
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25. Quality Control Quality Control
Taking action to ensure that operations produces products that meet specific quality standards
Requires establishment of specific standards and measurements
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26. Quality Improvement and Total Quality Management
Building quality into products and services rather than trying to control quality by inspection
Total Quality Management (TQM)
All of the activities necessary for getting high-quality goods and services into the marketplace
Quality Ownership
Quality belongs to each person who creates it while performing a job and it requires a focus on quality by all parts of an organization
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27. Total Quality Management
Always Delivering High Quality
Planning for quality
Organizing for quality
Directing for quality
Controlling for quality
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28. Tools for Total Quality Management
Competitive Product Analysis
Analyzing competitors’ products to identify improvements
Value-Added Analysis
Eliminating wasteful and unnecessary activities
Quality Improvement Teams
Adopting quality circles
Getting Closer to the Customer
Identifying internal and external customers
ISO 9000 and ISO 14000
Ensuring certification of quality management in processes
Business Process Reengineering
Starting over from scratch to improve processes
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29. Adding Value Through Supply Chains
Supply Chain (or Value Chain)
The flow of information, materials, and services that starts with raw-materials suppliers and continues adding value through other stages in the network of firms until the product reaches the end customer
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30. FIGURE 7.5 Supply Chain for Baked Goods
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31. The Supply Chain Strategy
Supply Chain Management (SCM)
Working with the supply chain as a whole to improve overall flow through a system composed of companies working together
Supply Chain Reengineering
Improving the process for better results:
Lower costs, speedier service, and coordinated flows of information and material
Outsourcing and Global Supply Chains
Paying suppliers and distributors to perform certain business processes or to provide needed materials or services
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32. Key Terms assembly line business process reengineering capacity
competitive product analysis
consistency (in quality)
detailed schedule
follow-up
Gantt chart
goods operations (goods production)
high-contact system
inventory control
ISO 14000
ISO 9000
just-in-time (JIT) production
lean production system
low-contact system
make-to-order operations
make-to-stock operations
master production schedule (MPS)
materials management
operations (production)
operations (production) management
operations (production) manager
operations capability
operations control
operations process
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33. Key Terms (cont.) performance (in quality) process layout
product layout
purchasing
quality
quality control
quality improvement team
quality ownership
service operations (service production)
staff schedule
supplier selection
supply chain (value chain)
supply chain management (SCM)
total quality management (TQM)
transportation
utility
value-added analysis
warehousing
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