1. 1 Production Operations Management Introduction to POM U. Akinc Introduction to POM U. Akinc

2. 2 POM l Productivity –What is it to POM? –What is it to a Company? –What does it Mean to You? l Production/ Operations Management –What? –Who? l Business Strategy and Operations Management l Productivity –What is it to POM? –What is it to a Company? –What does it Mean to You? l Production/ Operations Management –What? –Who? l Business Strategy and Operations Management

3. 3 Productivity Definition: Economic output per unit of input Productivity = Output/Input (resource) Definition: Economic output per unit of input Productivity = Output/Input (resource)

4. 4 US. Productivity Trends l 600% since 1900 l 2.6% between 1945 - 1973 l 1.2% between 1973 - 1980 l 1.0% between 1980 – 1990 l 2.5% after 1990 l 600% since 1900 l 2.6% between 1945 - 1973 l 1.2% between 1973 - 1980 l 1.0% between 1980 – 1990 l 2.5% after 1990

5. 5 Recent US Productivity Changes

6. 6 Productivity Trends

7. 7 International Comparisons

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9. 9 Pressures on Productivity: Why Does Productivity Have to Grow? l Aging Population Why Does Productivity Have to Grow? l Aging Population

10. 10 Pressures on Productivity: Why Does Productivity Have to Grow? l Aging Population l Environmental Demands Why Does Productivity Have to Grow? l Aging Population l Environmental Demands

11. 11 Pressures on Productivity: Why Does Productivity Have to Grow? l Aging Population l Environmental Demands l Global Competition Why Does Productivity Have to Grow? l Aging Population l Environmental Demands l Global Competition

12. 12 Pressures on Productivity: Why Does Productivity Have to Grow? l Aging Population l Environmental Demands l Global Competition l Social Pressures Why Does Productivity Have to Grow? l Aging Population l Environmental Demands l Global Competition l Social Pressures

13. 13 Sources of productivity? Where does productivity come from? l Capital l Technology l Better Management of Resources: l Specialization l Macro (Organizational) l Micro Where does productivity come from? l Capital l Technology l Better Management of Resources: l Specialization l Macro (Organizational) l Micro

14. 14 Organizational Goals l Why do organizations exist? An alliance of at least –Labor –Management –Stockholders l Organizational Goals l Productive use of resources l Why do organizations exist? An alliance of at least –Labor –Management –Stockholders l Organizational Goals l Productive use of resources

15. 15 Operations l Activities that organizations perform to achieve their goals. l Definition: Activities aimed at bringing about goal oriented changes by designing and using processes. l Activities that organizations perform to achieve their goals. l Definition: Activities aimed at bringing about goal oriented changes by designing and using processes.

16. 16 Processes l Any set of activities that use resources, transform and add value to deliver one or more outputs to its customers. l Processes can be nested.. A process may include one or more sub processes l Any set of activities that use resources, transform and add value to deliver one or more outputs to its customers. l Processes can be nested.. A process may include one or more sub processes

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18. 18 Porter’s Value Chain

19. 19 Domain of POM (WHAT?) l Determining the Desired Outputs l Determining the Necessary Inputs l Determining the Technology Necessary l Planning and Controlling the –quality –availability –cost of Work Processes and Their Results l Delivery and Distribution of the Output l Determining the Desired Outputs l Determining the Necessary Inputs l Determining the Technology Necessary l Planning and Controlling the –quality –availability –cost of Work Processes and Their Results l Delivery and Distribution of the Output

20. 20 POM Decisions

21. 21 The Professionals (WHO?)

22. 22 WHAT? Design Many of the design functions are strategic l Facilities design –Locations –Sizes –Layouts –Equipment –Transportation means l Product/Product Line l Management Systems Many of the design functions are strategic l Facilities design –Locations –Sizes –Layouts –Equipment –Transportation means l Product/Product Line l Management Systems

23. 23 WHAT? Planning Determining the ways in which the productive facility will be used l Demand Forecasting l Production Planning l Material Requirements Planning l Inventory Planning l Staffing Needs l Equipment Needs Determining the ways in which the productive facility will be used l Demand Forecasting l Production Planning l Material Requirements Planning l Inventory Planning l Staffing Needs l Equipment Needs

24. 24 WHAT? Scheduling Determining the time and the resources with which the tasks will be performed. Examples: l Assignment of specific customer orders to individual machines or individuals l Assignment of workers to work centers l Sequencing of work l Vehicle Dispatching Determining the time and the resources with which the tasks will be performed. Examples: l Assignment of specific customer orders to individual machines or individuals l Assignment of workers to work centers l Sequencing of work l Vehicle Dispatching

25. 25 WHAT? Control Determining the degree of match between actual and planned outcomes Examples: l Quality Control –Conformance –Design l Materials Control (Inventory Control) l Equipment Control (Maintenance) l Cost Control (Variance Analysis) Determining the degree of match between actual and planned outcomes Examples: l Quality Control –Conformance –Design l Materials Control (Inventory Control) l Equipment Control (Maintenance) l Cost Control (Variance Analysis)