Chap 1 Production and Operations Slides

Production and Operations Management
Spring 2012
Foundations of Operations Management, Canadian Edition Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
Reference
Larry P. Ritzman. Foundations of Operations Management. China Renmin University Press ,Aug. 2004. Or latter edition
1-2
Grading
Exams: 60% Attendance,quiz and assignments: 40%
1-3
Chapter 1
Competing with Operations

What Is a Process?
Process
Activities that transform inputs, add value and generate output(s)
Example: Furniture Manufacturing

Primary Process
Cutting or staining wood
Non-Manufacturing Process
Controlling Inventory
1-5
Processes & Operations

Internal and external customers
Inputs
Workers Managers Equipment Facilities Materials Services Land Energy
Processes and operations

1 3 5 2 4
Outputs
Services Goods
Figure 1.1
Information on performance
1-6
Nested Processes at a Large Bank

BANK
Operations
Cash Management Loan operations Trading operations Others ATM support Customer transactions Service quality Others Maintain cards Research problems Site analysis Others
Retail
Distribution Compliance Finance Human resources Teller line transactions Track branch sales ATM hotline Others Process deposits Cash checks Safe deposit boxes Others
Products
Auto Finance Cards Mortgages Others Credit applications Manage retail products Originate lease portfolio Others Loan documentation Review credit standing Obtain manager approval Others
Wholesale
Trading Loan administration Leasing Others Fund management Market making spot Dealer support Others Prepare reports Attend meetings Input funds deals Others
Figure 1.2
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What Is Operations Management?

Efficiently using processes to transform inputs into valuable outputs Successful operations management results from careful allocation of:
Human Resources Capital Information Materials
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Operations Management as a Function
Figure 1.3
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Operations Management As a Function

Skill Areas
Quantitative methods Organizational behavior General management Information systems Economics International business Business ethics and law
Figure 1.3
1-10
Trends & New Challenges in Operations Management

Growth of the Service Sector Intense Productivity pressures Global Competition
Firms can no longer hide behind borders
Ethics, Diversity & Environmental Issues

Conflicting business protocol Cultural dilemmas
1-11
Service Sector Jobs
1-12
Strategic Considerations
Business Environment
Continuous Environmental Scanning is necessary
Flexibility
Capacity to meet ever-changing client demands
Core Competencies
Using the firms unique strengths to seize opportunities
1-13
The Importance of Market Analysis

Market Segmentation
identify groups or sub-groups of clients
Needs Assessment
identify the requirements of each group
Product or service needs Delivery system needs Volume needs
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Selecting Competitive Priorities

Corporate strategy
goals core competencies environmental responses new products/services global strategies
Competitive Priorities Cost 1. Low-cost operations Quality Market 2.analysis High-performance design segmentation 3. Consistent quality needs assessment Time 4. Fast delivery 5. On-time delivery 6. Development speed Flexibility 7. Customization 8. Volume flexibility
Figure 1.5
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Selecting Competitive Priorities

Corporate strategy
goals core competencies environmental responses new products/services global strategies
Market analysis
segmentation needs assessment Competitive priorities Operations Marketing cost quality Finance time flexibility Others Functional area strategies finance marketing operations others
Capabilities
current needed plans
Figure 1.5
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Strategy and Decisions

Corporate strategy Market analysis Competitive priorities
Operations strategy
Figure 1.8
Services Standardized services Assemble-to-order Customized services
Manufacturing Make-to-stock Assemble-to-order Make-to-order
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Examples of Service Strategies

Standardized services
Canada Post
Assemble-to-order Cable companies (pre-arranged packages) Customized services

Health clinics
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Health Clinic Process
D T
D: R: T: B: P:
R B
Figure 1.6
Doctor (examination rooms) Radiology (X-ray) Triage (assess severity of illness) Blood (lab test) Pharmacy (fill prescriptions)
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Physical exam Physical exam
D T
D: R: T: B: P:
R B
Figure 1.6
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Physical exam Physical exam Broken arm
D T
D: R: T: B: P:
R B
Broken arm
Figure 1.6
1-21

Physical exam Physical exam Broken arm Flu
D T
R B
P
Broken arm
Flu D: R: T: B: P: Doctor (examination rooms) Radiology (X-ray) Triage (assess severity of illness) Blood (lab test) Pharmacy (fill prescriptions)
1-22
Figure 1.6
Examples of Manufacturing Strategies

Make-to-stock
Mass-produced automobiles
Assemble-to-order
Upscale Unique Furniture
Make-to-order High-end homes

1-23
Automobile Assembly Process

A H F S
Figure 1.7
A: Front-end body-tochassis assembly H: Hood attachment F: Fluid filling S: Start-up testing

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A H F S
Figure 1.7

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A H F S
Figure 1.7

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Operations strategy
Process decisions Standardized services Make-to-stock Assemble-to-order Assemble-to-order Quality decisions Customized services Make-to-order Capacity, location, and layout decisions Operating decisions
Services
Manufacturing
Figure 1.8
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Operations strategy
Services Manufacturing Standardized services Make-to-stock Assemble-to-order Assemble-to-order Customized services Make-to-order
Process decisions Quality decisions Capacity, location, and layout decisions Operating decisions
Figure 1.8
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Operations strategy
Services Manufacturing Standardized services Make-to-stock Assemble-to-order Assemble-to-order Customized services Make-to-order
Capabilities
Process decisions Quality decisions Capacity, location, and layout decisions Operating decisions
Figure 1.8
1-29
Cross-Functional Coordination
Removing barriers between departments
Moving from sequential decision-making to coordination leads to:
Improved communication More accurate market information More timely internal feedback
1-30

Chap 1 Production and Operations Slides

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Chap 1 Production and Operations Slides

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Production and Operations Management

Competing with Operations

Example: Furniture Manufacturing

Processes & Operations

Processes and operations

Nested Processes at a Large Bank

What Is Operations Management?

Operations Management as a Function

Operations Management As a Function

Trends & New Challenges in Operations Management

Ethics, Diversity & Environmental Issues

Service Sector Jobs

The Importance of Market Analysis

Selecting Competitive Priorities

Selecting Competitive Priorities

Strategy and Decisions

Services Standardized services Assemble-to-order Customized services

Manufacturing Make-to-stock Assemble-to-order Make-to-order

Examples of Service Strategies

Assemble-to-order Cable companies (pre-arranged packages) Customized services

Health Clinic Process

Health Clinic Process

Health Clinic Process

Health Clinic Process

Examples of Manufacturing Strategies

Make-to-order High-end homes

Automobile Assembly Process

A: Front-end body-tochassis assembly H: Hood attachment F: Fluid filling S: Start-up testing

Automobile Assembly Process

A: Front-end body-tochassis assembly H: Hood attachment F: Fluid filling S: Start-up testing

Automobile Assembly Process

A: Front-end body-tochassis assembly H: Hood attachment F: Fluid filling S: Start-up testing

Strategy and Decisions

Strategy and Decisions

Strategy and Decisions

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