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  1. 1. Operations ManagementMultiMedia by 2002 South-
  2. 2. Operations Strategy  Part of a strategic plan that defines: – The role – Capabilities – Expectations of operationsMultiMedia by 2002 South-
  3. 3. Operational Problems for Producers of Goods and Services Each is concerned with converting resources into something saleable. Each must acquire materials or supplies to achieve that conversion. Each must schedule the process of conversion. Each must control processes and ensure quality. MultiMedia by 2002 South-
  4. 4. Flow of Operations Inputs Outputs•Raw Materials•Human Resources Transformation •Products•Land, Buildings Processes •Services•Information•Technology Feedback to Provide Control MultiMedia by 2002 South-
  5. 5. Role of Operations Operations Strategy and Strategy Operations Operations Management Management Products, Facilities, Implementation Control and Processes Structures Processes Product or Service Design Scheduling Design Control Facilities Layout Relationships Purchasing Control Decentralization Inventory ControlInputs Production Processes Outputs and Technology Teams Scheduling Control Facilities Location Productivity Product Control Capacity Planning Quality Productivity Productivity Quality Quality MultiMedia by 2002 South-
  6. 6. Operations Management Embraces Facilities Process design ProductImplementation structure Control processes MultiMedia by 2002 South-
  7. 7. The Planning Stage of an Organization’s Operations  Involves decisions about:  Involves decisions about: –– Product or service design Product or service design –– Facilities layout Facilities layout –– Production processes and Production processes and technology technology –– Facilities location Facilities location –– Capacity planning Capacity planningMultiMedia by 2002 South-
  8. 8. Two Design Concepts1. Design for manufacturability and assembly (DFM/A) • Calls for design teams consisting of designers, manufacturers, and assemblers. • all have a say in product design and actual production of the product. • DFM/A product design involves four criteria:  Producibility  Cost  Quality  Reliability2. Design for disassembly (DFD) • The goal is to conceive, develop, and build a product with a long-term view of how its components can be refurbished and reused–or disposed of safely. MultiMedia by 2002 South-
  9. 9. Major Benefits of the DFMA Approach, Against Which GM Evaluates New DesignsQuality Excellence of the car, including serviceability.Reliability The degree to which the car fulfills its intended purpose.Durability The degree to which the car withstands performance demands.Mass The total weight of the car.Safety The degree to which the car increases the protection of occupants.Manufacturability The degree to which the car can be manufactured and assembled within existing operational capacity.Time to market The time from product design until the car is ready for sale to the consumer.Total cost The total amount of materials, labor, transportation, design, and overhaul expenses associated with the design. MultiMedia by 2002 South-
  10. 10. Process LayoutEquipment or machines that perform a similar task or function are located together. A product is moved from process to process as needed. Major advantage is potential for reducing costs. Requires fewer people and pieces of equipment. Limits the need to move the product through several different processes. MultiMedia by 2002 South-
  11. 11. Four Options of Facilities Layout(a) Process LayoutReceiving Dept. Molding Welding Assembly Storage Wiring Insulation Painting Testing Product A Product B Product C MultiMedia by 2002 South-
  12. 12. Product LayoutMachines and tasks are arranged according to theMachines and tasks are arranged according to theprogressive steps by which the product is made. progressive steps by which the product is made. Efficient when the business produces large Efficient when the business produces large volumes of identical products. volumes of identical products.MultiMedia by 2002 South-
  13. 13. Four Options of Facilities Layout(b) Product Layout Molding Welding TestingReceiving Receiving Dept. Molding Wiring Painting Assembly Dept. Molding Insulating Painting Assembly Product A Product B Product C MultiMedia by 2002 South-
  14. 14. Cellular LayoutCombines some of the characteristics of process and product layouts.All the equipment required for a sequence of operations on the same product is placed together. Allows efficient handling of materials and inventory.Workers are physically close enough to work together to solve problems. MultiMedia by 2002 South-
  15. 15. Four Options of Facilities Layout(c) Cellular Layout Welding Painting Wiring Testing Assembly Molding Product A Product B Product CMultiMedia by 2002 South-
  16. 16. Fixed-Position Layout Used because The product of size or remains in bulk. one location. Tools, equipment, and human skill are brought to the product.MultiMedia by 2002 South-
  17. 17. Four Options of Facilities Layout(d) Fixed-Position Layout Labor Machines Supplies Equipment Product Materials MultiMedia by 2002 South-
  18. 18. Technologies Responsible forRevolutionizing Manufacturing Processes Computer- Flexible integrated manufacturing manufacturing systems CAD/CA Robotics M Agile Soft manufacturin manufacturin g g systems MultiMedia by 2002 South-
  19. 19. Placement of Facilities Two Questions  Should the firm  Where should the have one or two facilities be large plants, or located? several smaller ones?MultiMedia by 2002 South-
  20. 20. Facility Location Depends on Proximity toLabor costs Tax rates suppliersAvailability Quality of of labor The location life for skills of the market employees where theConstruction product will be sold Utility rates expenses MultiMedia by 2002 South-
  21. 21. To Increase Capacity Create additional Build new facilities shifts and hire new staff Pay present staff overtimeSubcontract work to outside Refit existing plants firmsMultiMedia by 2002 South-
  22. 22. Specific Plans for the Overall Production Activities Involve Aggregate Master planning scheduling Structuring for operationsMultiMedia by 2002 South-
  23. 23. Development of a Master Schedule from an Aggregate PlanAggregate Plan (Units per Month) January February March April May Electric Ranges 1,000 1,250 1,200 1,300 1,200 Gas Ranges 750 800 700 1,000 1,000 Total 1,750 2,050 1,900 2,300 2,200Master Schedule for Electric Ranges (Units per Week) January February 1 2 3 4 5 6 7 8 3,600 100 100 50 50 100 100 50 100 3,665 100 100 50 100 100 50 100 100 3,670 100 50 100 100 150 150 150 150 January Total 1,000 February Total 1,300 Note: Another master schedule will be developed for the gas ranges. MultiMedia by 2002 South-
  24. 24. Operational ControlsMaterialsMaterials Inventory Inventory Control of designSchedulingScheduling Products ProductsMultiMedia by 2002 South-
  25. 25. Design Control Focuses on creating new products engineered for reliability. Functionality ServiceabilityMultiMedia by 2002 South-
  26. 26. Purchasing is Critical for the Following Reasons If the materials are not on hand, nothing can be produced. If the right quantity of materials is not available, the organization cannot meet demand. If the materials are of inferior quality, producing quality products is difficult or costly.MultiMedia by 2002 South-
  27. 27. Goals of Purchasing Control Ensure availability of material Balance costs Ensure acceptable quality of materialMultiMedia by 2002 South-
  28. 28. Three Types of Inventory Transformation Inputs Outputs Processes Raw Work-in- Finished Materials Process Goods Inventory Inventory InventoryMultiMedia by 2002 South-
  29. 29. Four Specific Techniques for Inventory ManagementEconomic order quantity Manufacturing resource planning Just-in-time inventoryMaterials requirement planning systems MultiMedia by 2002 South-