Module #01

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  • Module #01

    1. 1. 1. Operations and Productivity
    2. 2. Outline <ul><li>Operations Management </li></ul><ul><li>Roles of OM </li></ul><ul><li>The OM Heritage </li></ul><ul><li>Goods vs. Services </li></ul><ul><li>Productivity </li></ul><ul><li>Productivity Measures </li></ul>
    3. 3. Operations Management? <ul><li>Operations Management is the set of activities that creates value in the form of goods/services by transforming inputs into outputs. </li></ul><ul><li>OM is defined as the design , operation , and improvement of the systems that create & deliver firm’s primary products/services. </li></ul>
    4. 4. What is a Transformation Process? <ul><li>A transformation process is defined as a user of resources to transform inputs into some desired outputs </li></ul>
    5. 5. <ul><li>Physical - Manufacturing </li></ul><ul><li>Locational - Transportation </li></ul><ul><li>Exchange - Retailing </li></ul><ul><li>Storage - Warehousing </li></ul><ul><li>Physiological - Health Care </li></ul><ul><li>Informational - Telecommunications </li></ul>Transformation Process (6-ways)
    6. 8. Roles of OM <ul><li>Design of Goods/Services </li></ul><ul><li>Managing Quality </li></ul><ul><li>Process Design </li></ul><ul><li>Facility Location & Layout </li></ul><ul><li>Job Design & Measurement </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Inventory Management </li></ul><ul><li>Sales & Operations Planning </li></ul><ul><li>Scheduling/Maintenance </li></ul><ul><li>Project Management </li></ul>
    7. 9. The Heritage of OM <ul><li>COST FOCUS </li></ul><ul><ul><li>Early Concepts (1776-1880) </li></ul></ul><ul><ul><li>Scientific Management Era (1880-1910) </li></ul></ul><ul><ul><li>Mass Production Era (1910-1980) </li></ul></ul><ul><li>QUALITY FOCUS </li></ul><ul><ul><li>Lean Production Era (1980-1995) </li></ul></ul><ul><li>CUSTOMIZATION FOCUS </li></ul><ul><ul><li>Mass Customization Era (1995-till date) </li></ul></ul>
    8. 10. Legends of OM <ul><li>Adam Smith (1776) </li></ul><ul><ul><li>Labor Specialization </li></ul></ul><ul><li>Eli Whitney (1800) </li></ul><ul><ul><li>Standardized Parts </li></ul></ul>
    9. 11. Legends of OM <ul><li>F.W. Taylor (1881) </li></ul><ul><ul><li>The Principles of Scientific Management </li></ul></ul><ul><li>Frank/Lillian Gilbreth </li></ul><ul><ul><li>Motion Study (Therbligs) </li></ul></ul>
    10. 12. Legends of OM <ul><li>Henry Gantt </li></ul><ul><ul><li>Gantt Chart/Project Activity </li></ul></ul><ul><li>Agner Erlang </li></ul><ul><ul><li>Queuing Theory/Traffic Engg. </li></ul></ul>
    11. 13. Legends of OM <ul><li>Henry Ford </li></ul><ul><ul><li>Model-T/Moving Assemble Line </li></ul></ul><ul><li>F.W. Harris (1913) </li></ul><ul><ul><li>Economic Order Quantity (EOQ) </li></ul></ul>
    12. 14. Legends of OM <ul><li>Walter Shewhart (1924) </li></ul><ul><ul><li>Statistical Sampling </li></ul></ul><ul><li>W. Edward Deming (1950) </li></ul><ul><ul><li>14-points to Management </li></ul></ul>
    13. 15. Goods vs. Services <ul><li>Tangible vs. Intangible </li></ul><ul><li>Customer Interaction….Low vs. High </li></ul><ul><li>Homogeneous vs. Heterogeneous </li></ul><ul><li>Process….Perishable & Time Dependent </li></ul><ul><li>Evaluation….Package of Features </li></ul>
    14. 16. The Goods-Services Continuum
    15. 17. <ul><li>“ If you drop it on your foot, it won’t hurt you.” (Good or Service?) </li></ul><ul><li>“ Services never include goods and goods never include services.” (True or False?) </li></ul>
    16. 18. <ul><li>= Outputs </li></ul><ul><li> Inputs </li></ul>Productivity <ul><li>Productivity is the ratio of outputs (goods and services) divided by inputs (resources such as labor and capital). </li></ul><ul><li>Productivity Variables: </li></ul><ul><ul><ul><li>Labor, Capital, and Management </li></ul></ul></ul>
    17. 19. Total Measure Productivity <ul><li>Total Measure Productivity = Outputs Inputs </li></ul><ul><li> </li></ul> or = Goods and Services Produced All Resources Used
    18. 20. Partial Measure Productivity <ul><li>Partial Measures of Productivity </li></ul><ul><li>= Output or Output or Output or Output </li></ul><ul><ul><li>Labor Capital Materials Energy </li></ul></ul>
    19. 21. Multifactor Measure Productivity <ul><li>Multifactor Measures of Productivity = </li></ul><ul><li>Output </li></ul><ul><ul><li>Labor + Capital + Energy </li></ul></ul><ul><ul><li> or </li></ul></ul><ul><li>Output </li></ul><ul><ul><li>Labor + Capital + Materials </li></ul></ul>
    20. 23. Problem <ul><li>An automobile manufacturing company has provided the following data. Compare the labor, raw materials & supplies, and total productivity of 2007 and 2008. </li></ul>
    21. 24. Solution
    22. 25. What’s Next? <ul><li>Chapter-2 </li></ul><ul><ul><li>Forecasting </li></ul></ul><ul><ul><li>Importance of Forecasting </li></ul></ul>

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