1. Operations management in manufacturing and service industries
Chapter 11

2. Operations Management
The value-creation activities that convert a company’s inputs into finished goods and services.

3. Materials Management
The set of activities that control the flow of resources into and out of a firm’s operating system.

4. Creating a competitive advantage

5. Production Operation Systems
Make-to-Order
Alden Restaurant Furniture

6. Production Operation Systems
Mass Production
X-Box

7. Production Operation Systems
Mass Customization
Sears Optical

8. Facility Layouts
Arranging the product process as efficiently as possible.
Process layout: Grouping people by task; specialized equipment used to perform tasks.
Product layout: Products produced by people arranged in an assembly line.
Cellular layout: Small teams handle all aspects of production (e.g., construction, plumbers, or electricians)

9. Tyco’s factory layout

10. Bread factory layout

11. Furniture factory layout

12. Keeping track of production schedules
Gantt chart
Vermont
Teddy Bear

13. Keeping track of production schedules
PERT Chart: How long does it take to make a teddy bear?
Start
Cut material for cloth (10 min.)
Sew clothes (10 min.)
Embroider T-shirt (10 min.)
Dress bear (15 min.)
Package bear (5 min.)
Ship bear (5 min.)
Cut fur (10 min.)
Stuff fur (30 min.)
Cut accessories (5 min.)
Sew accessories (10 min.)

14. Keeping track of production schedules
PERT Chart: How long does it take to make a teddy bear?
Start
Cut material for cloth (10 min.)
Sew clothes (10 min.)
Embroider T-shirt (10 min.)
Dress bear (15 min.)
Package bear (5 min.)
Ship bear (5 min.)
Cut fur (10 min.)
Stuff fur (30 min.)
Cut accessories (5 min.)
Sew accessories (10 min.)
Critical Path: The longest path

15. Service Blueprint Components

16. Blueprint for Overnight Hotel Stay Service
Hotel Exterior
Parking
Cart for
Bags
Desk
Registration
Papers
Lobby
Key
Elevators
Hallways
Room
Cart for
Bags
Room
Amenities
Bath
Menu
Delivery
Tray
Food
Appearance
Food
PHYSICAL
EVIDENCE
Bill
Desk
Lobby
Hotel Exterior
Parking
Arrive at
Hotel
Give Bags to
Bellperson
Call
Room
Service
Check out
and
Leave
Go to
Room
Receive
Bags
Sleep
Shower
CUSTOMER
Receive
Food
Check in
Eat
Line of Interaction
Greet and
Take
Bags
(On Stage)
Process
Registration
Deliver
Bags
Deliver
Food
Process
Check Out
CONTACT PERSON
Line of Visibility
(Back Stage)
Take
Food
Order
Take Bags
to Room
Line of Internal Interaction
Registration
System
Registration
System
Prepare
Food
SUPPORT PROCESS

17. Total Quality Management (TQM)
Continuous improvement of the product process by increasing the quality of product and lowering operating costs.

18. Key components of TQM Involve top management Employee involvement
Focus on customer satisfaction
Continuous improvement