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Introduction to Operations Operations -- Prof. Juran.

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Presentation on theme: "Introduction to Operations Operations -- Prof. Juran."— Presentation transcript:

1 Introduction to Operations Operations -- Prof. Juran

2 Intro to Operations Management Administrative Issues Basic Definitions Operations Strategy Historical Development of OM Scientific Management Current Issues in OM Measures of Productivity Outline

3 Operations -- Prof. Juran Web site – Mission – Description – Syllabus (note special dates) – Downloads Textbook TAs About the Class

4 Operations -- Prof. Juran What is Operations Management? The design, control, and improvement of the systems that create and deliver the firm’s primary products and services

5 Operations -- Prof. Juran What is a Production System? A user of resources to transform inputs into some desired outputs

6 Operations -- Prof. Juran Important Measures of Performance Efficiency: Using a minimum of resources Effectiveness: Creating value for some customer

7 Operations -- Prof. Juran Transformations

8 Operations -- Prof. Juran Manufacturing vs. Services What differentiates manufacturing operations from service operations? J&C proposition: All businesses are services

9 Operations -- Prof. Juran Operations Strategy J&C: Setting broad policies and plans for using the resources of the firm to best support its long-term competitive strategy Juran: Deciding how the firm’s competitive strategy will actually happen, in terms of processes that are more efficient and/or more effective than the competition’s processes.

10 Operations -- Prof. Juran Operations Strategy Key questions: What business are we in? Who are the customers? What do the customers need? How can we meet those needs more efficiently/effectively than the competition? How is all of this going to change over time?

11 Operations -- Prof. Juran Competitive Dimensions Cost Product Quality and Reliability Delivery Speed Delivery Reliability Coping with Changes in Demand Flexibility and New Product Introduction Speed Other Product-Specific Criteria

12 Operations -- Prof. Juran Dealing with Trade-offs Cost vs. Quality Flexibility vs. Speed Etc.

13 Operations -- Prof. Juran Strategic Frameworks Kaplan and Norton: Financial Customer Internal Learning and Growth

14 Operations -- Prof. Juran Strategic Frameworks Michael Porter: Rivalry Threat of Substitutes Buyer Power Supplier Power Barriers to Entry / Threat of Entry

15 Operations -- Prof. Juran Historical Development of OM Craft System Industrial Revolution Scientific Management Organizational Science Operations Research JIT and TQM Supply Chain Management Internet Commerce

16 Operations -- Prof. Juran Craft System

17 Operations -- Prof. Juran Industrial Revolution Eli Whitney 1765 - 1825

18 Operations -- Prof. Juran Scientific Management Frederick W. Taylor 1856 - 1915

19 Operations -- Prof. Juran Industrial Revolution Henry Ford 1863 - 1947

20 Operations -- Prof. Juran Scientific Management Frederick Winslow Taylor, (1856-1915), American industrial engineer. In 1878, he began working at the Midvale Steel Company. Developed measures of productivity based on time & motion studies. Became rich from 100+ patents including tempered steel.

21 Operations -- Prof. Juran Taylor’s Industrial Environment Large numbers of unskilled workers Many immigrants who often didn’t speak English Homogeneous markets meant great returns to scale (e.g, Model T dropped in price from $1000 to $360) Management not viewed as a general or learnable skill

22 Operations -- Prof. Juran Scientific Management Defined by Frederick Taylor, late 1800s. The systematic study of the relationships between people and tasks to redesign the work for higher efficiency. – Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done. Significant improvements in productivity

23 Operations -- Prof. Juran Taylor’s 4 Principles Develop a science for each element of work Select, train, and develop workers Cooperate with workers (share the savings – more $$$ for better performance) Divide work and responsibility equally

24 Operations -- Prof. Juran Resistance to Taylor Separation of work from planning destroyed the traditional craft system – ‘money substituted for pride’ Unions mistrusted – Taylor reduced work force from 450 to 150 on first job Some firms cut rates after changes Legislation to prevent time studies in government jobs.

25 Operations -- Prof. Juran Frank & Lillian Gilbreth Time and Motion Studies Film Therbligs Cheaper by the Dozen Henry L. Gantt Engineer; worked with Taylor Gantt Chart

26 Operations -- Prof. Juran The Gilbreths Frank and Lillian Gilbreth refined Taylor’s methods. – Made many improvements to time and motion studies. Time and motion studies: – 1. Break down each action into components. – 2. Find better ways to perform it. – 3. Reorganize each action to be more efficient. Gilbreths also studied fatigue problems, lighting, heating and other worker issues.

27 Operations -- Prof. Juran Organizational Science Elton Mayo (1880 - 1949)

28 Operations -- Prof. Juran Operations Research Patrick Blackett (1897 - 1974)

29 Operations -- Prof. Juran JIT and TQM Taiichi Ohno 1912 - 1990 Kaoru Ishikawa 1915 - 1989 Genichi Taguchi 1924 - 2012

30 Operations -- Prof. Juran JIT and TQM Walter Shewhart 1891 - 1967 W. Edwards Deming 1900 - 1993 Joseph M. Juran 1904 - 2008

31 Operations -- Prof. Juran Current Issues in OM Coordinating relationships between mutually supportive but separate organizations Optimizing global supplier, production, and distribution networks Managing customer touch points Raising awareness of competitive advantage –Amazon, Apple, Taco Bell, Southwest Airlines Operational risk Sustainability and “triple bottom line” –Economics, employees, environment

32 Operations -- Prof. Juran What is Productivity? Productivity is a common measure on how well resources are being used. In the broadest sense, it can be defined as the following ratio: Outputs Inputs

33 Operations -- Prof. Juran Total Measure Productivity Total Measure Productivity = Outputs Inputs or = Goods and services produced All resources used

34 Operations -- Prof. Juran Partial Measure Productivity Output or Output or Output or Output Labor Capital Materials Energy

35 Operations -- Prof. Juran Multifactor Measure Productivity Output. Labor + Capital + Energy or Output. Labor + Capital + Materials

36 Operations -- Prof. Juran Summary Intro to Operations Management Administrative Issues Basic Definitions Operations Strategy Historical Development of OM Scientific Management Current Issues in OM Measures of Productivity

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