05-Operations Management


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05-Operations Management

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05-Operations Management

  1. 1. MANAGING OPERATION AND IMPROVING QUALITY Lecture Notes for Business Introduction By Fahmy Radhi
  2. 2. Operations Management <ul><li>Planning and controlling in a systematic process that transform inputs into outputs of greater value </li></ul><ul><li>It deals with the production of goods and services </li></ul>
  3. 4. Transformation Process Output Process Input Automobiles Televisions Services Manufacturing Assembling Transporting Storing Consulting Materials Machines Man/workers Money/capital Information
  4. 6. Differences between Goods and Services Intangible outputs Can not be inventoried High customer contact Short response time Small facilities Labor intensive Not be easily measured Tangible and durable Output can be inventoried Low customer contact Long response time Large facilities Capital intensive Quality easily measured Services Goods
  5. 7. Proportion of goods and services
  6. 8. Types of Manufacturing Operations <ul><li>Job Shop Manufacturing – make-to-order product in accordance with design supplied by the customer. </li></ul><ul><li>Its characteristics: </li></ul><ul><li>High variety product with low volume, </li></ul><ul><li>Using the multipurpose equipments and flexibility material handling, </li></ul><ul><li>Need broad range skills. </li></ul><ul><li>E.g. custom-built home, custom tailor clothes, specific machines </li></ul>
  7. 9. Types of Manufacturing Operations <ul><li>Repetitive Manufacturing – make-to-stock produced to anticipation of customer demand. </li></ul><ul><li>Its characteristics: </li></ul><ul><li>High volume with low variety as standardized product for mass market </li></ul><ul><li>Repetitive process using the single purpose equipment for the same process </li></ul><ul><li>Need a specialist skills. </li></ul><ul><li>E.g. Television, Refrigerator, most costumer goods </li></ul>
  8. 10. Types of Manufacturing Operations <ul><li>Batch Manufacturing – similar standard product produced periodically in batches. </li></ul><ul><li>Its characteristics: </li></ul><ul><li>Combination of product variety and average volume per product, </li></ul><ul><li>Using flexible Equipment that must be capable of performing some variety of tasks, </li></ul><ul><li>Need a variety of skills. </li></ul><ul><li>E.g. hand tools, bakeries </li></ul>
  9. 11. Types of Services Operation <ul><li>Service Factories : Low labor intensity - Low customer interaction. E.g.: airline, hotel. </li></ul><ul><li>Service Shops: Low Labor intensity - high customer interaction. E.g.: hospital, repair service </li></ul><ul><li>Mass Service: high labor intensity - low customer interaction. E.g.: Banking, Education </li></ul><ul><li>Professional Services : both highly labor-intensity and customer interaction. E.g.: Doctors, Lawyer </li></ul>
  10. 12. Operations Planning <ul><li>Capacity Planning </li></ul><ul><li>Location Planning </li></ul><ul><li>Layout Planning </li></ul><ul><li>Product design planning </li></ul><ul><li>Process Planning </li></ul><ul><li>Drawing and Scheduling </li></ul><ul><li>Quality Planning </li></ul>
  11. 14. Layout Types <ul><li>Process/functional Layouts – arranged by group similar process or function or activities in department or work centers </li></ul><ul><li>Product/line Layouts – arranged in line according to the sequence of operations for particular product or service </li></ul><ul><li>Fixed-position Layout – arrangement in which the product is in fixed place, while worker along with equipments are move to the product </li></ul>
  12. 16. Material Management <ul><li>Materials Management - an integrated activities in purchasing, transporting, storage, handling of materials, and inventory control </li></ul><ul><li>Material Control Methods: </li></ul><ul><li>EOQ – Economic Order Quantity </li></ul><ul><li>JIT – Just-In-Time </li></ul><ul><li>MRP – Material Requirement Planning </li></ul>
  13. 17. Improving Quality <ul><li>Quality is the totally of features and characteristic of a product or service that bears on its ability to satisfy given needs </li></ul><ul><li>Major Areas of quality: </li></ul><ul><li>Quality of Design </li></ul><ul><li>Quality of transformation process </li></ul><ul><li>Quality of Products </li></ul><ul><li>Quality of Service after delivery </li></ul>
  14. 18. Quality Dimensions <ul><li>Performance – the main characteristics </li></ul><ul><li>Features – extra characteristic added. </li></ul><ul><li>Reliability – consistency its performance </li></ul><ul><li>Conformance – how well a product meets standard </li></ul><ul><li>Durability, Serviceability, Aesthetics and Safety </li></ul>
  15. 19. Total Quality Management <ul><li>TQM is a philosophy and approach to managing an organization that involves everyone in the quest for quality as perceived by customer </li></ul><ul><li>The TQM approach: </li></ul><ul><li>Find out what customer want </li></ul><ul><li>Design should meet with customer want </li></ul><ul><li>Never ending improvement </li></ul><ul><li>Extend these concept to supplier and to distribution </li></ul>
  16. 20. TQM Strategy <ul><li>Continuous improvement </li></ul><ul><li>Competitive benchmarking </li></ul><ul><li>Quality Function Deployment </li></ul><ul><li>Employee Empowerment </li></ul><ul><li>Team approach </li></ul><ul><li>Skills and knowledge Improvement </li></ul>