1. Operations Management PUTTING IT ALL TOGETHER

2. Producing Value in a Changing Environment  Operations Management: Managing all activities involved in creating value.  Right goods  Right quantities  Right customers  Right time FROM Efficiency TO Effectiveness FROM Goods TO Services FROM Mass Production TO Mass Customization FROM Local Competition TO Global Competition FROM Exploiting Environment TO Protecting Environment 17-1

3. Responsibilities  Product – all tangible and intangible features that create value  Design high quality, on time, within budget  Location  Inventory  Project Scheduling  Critical Path Method (CPM)  Managing Value Chains  Network of relationships  Enterprise resource planning (ERP) Integrate organization’s information flows  Organize Processes  Product Layout  Process Layout  Cellular layout  Fixed Position layout 17-2

4. Face Challenges  Servicescape – environment in which customer and service provider interact.  Ambience  Functionality  Signs, symbols and artifacts  Determine proper capacity 17-3

5. Changes in Technology  Sophistication  Machinery and Equipment  Software and Information Technology  Automation  Robots  Software Technologies  Computer-aided design (CAD)  drawing and drafting tools  Computer- aided engineering (CAE)  Test, analyze and optimize designs  Computer-aided manufacturing (CAM)  Electronic designing  Computer-integrated manufacturing (CIM: CAD and CAM)  Whole design and production automated 17-4

6. Focus on Quality  Gives customers what they want!  Total quality management (TQM)  Everyone committed to improving quality  Customer focus  Quality throughout  Empowerment of employees  Prevention rather than correction  Continuous improvement  Six Sigma  Approach to quality improvement  Reduce defects no more than 3.4 per million opportunities  Extensive training  Baldrige National Quality Program  Award/Program to encourage quality focus  ISO 9000 Certification  Network national standards institutes  Quality in one country = quality another country  ISO 9001 – specifies requirements for quality-management system 17-5

7. Lean and Green  Lean production – strategies of production to eliminate waste  Just-in-time production  Limiting inventory reduces waste  Energy efficient  Helps industry, business and environment 17-6

8.  Operations management: Managing all of the activities involved in creating value by producing goods and services and distributing them to customers.  Inventory: Stocks of goods or other items held by organizations.  Critical path method (CPM): A project management tool that illustrates the relationships among all the activities involved in completing a project and identifies the sequence of activities likely to take the longest to complete.  Immediate predecessors: Activities in a project that must be completed before some other specified activity can begin.  Value chain: The network of relationships that channels the flow of inputs, information, and financial resources through all of the processes directly or indirectly involved in producing goods and services and distributing them to customers.  Enterprise Resource Planning (ERP): Software based approach to integrate an organization’s (and in the sophisticated versions, a value chain’s) information flows.  Poka-yokes: Simple methods incorporated into a production process designed to eliminate or greatly reduce errors.  Six Sigma: An approach to quality improvement characterized by very ambitious quality goals, extensive training of employees, and a long-term commitment to working on quality-related issues.  Baldrige National Quality Program: A national program to encourage American firms to focus on quality improvement.  ISO 14000: A family of generic standards for environmental management established by the International Organization for Standardization.