Principles of Management & Production

MECN4000/MECN4014

Monday, 8 February 2010

Oliver Keys
Centre for Mechanised Mining Systems School of Mechanical, Industrial & Aeronautical Engineering NW25 oliver.keys@wits.ac.za

Monday, 8 February 2010

Systems Management
Introduction to Operations Management Operations Strategy Quality Supply Chain Management Lean
Monday, 8 February 2010

Introduction to Operations Management

Monday, 8 February 2010

Reducing labour and material costs

Delivering higher quality products and services

Management Issues

Achieving shorter delivery times

Delivering better customer service

Monday, 8 February 2010

What is OM?

An Organisational Perspective

An Operational Perspective

Monday, 8 February 2010

An Organisational Perspective
Corporate Strategy! BU 1 Strategy! BU 2 Strategy!

Finance Strategy!

IT Strategy!

Marketing Strategy!

HR Strategy!

Operations Strategy!

Monday, 8 February 2010

An Organisational Perspective
Corporate Strategy! BU 2 Strategy!

Finance Strategy!

IT Strategy!

Marketing Strategy!

HR Strategy!

Operations Strategy!

Monday, 8 February 2010

An Organisational Perspective
Strategic planning
constraints

Customer needs, capacity planning, capex decisions

Tactical planning
constraints

Efcient scheduling of resources

Operational planning and control

Monday, 8 February 2010

Day to day, immediate tasks

An Operational Perspective
Inputs Transformation process Outputs

labour & materials customers?

technical core

goods services happy customers?

Monday, 8 February 2010

An Operational Perspective
Transformation process: Physical Locational Exchange Storage Physiological Informational
Monday, 8 February 2010

An Operational Perspective

Monday, 8 February 2010

In 1909: Typical car: $2000 $3000 Model T: $850

Monday, 8 February 2010

Ford Model T
Sales Retail price Labour per unit 69 762 $850 12.5 hr
1909 1909 1911

501 462 $440 93 min

1914 1915

1915

Monday, 8 February 2010

The Value Stream

Incoming Processing Finished storage time storage Process rate 1000 t/hr Cum. days 319 305 277 10 ft/min 2000/min 1500/min 173 131 89 47 8 5 3 Cum. scrap 0 0 2 4 6 20 24 24 24 -90

Mine Reduction mill Smelter Hot rolling mill Cold rolling mill Can maker Bottler Tesco RDC Tesco store Home storage

0 2 weeks 3 months 2 weeks 2 weeks 2 weeks 4 days 0 0 3 days

20 min 30 min 2 hrs 1 min 1 min 1 min 1 min 0 0 5 min

2 weeks 2 weeks 2 weeks 4 weeks 4 weeks 5 weeks 3 days 2 days

4 weeks 2100 ft/min

Totals
Monday, 8 February 2010

5 months 3 hours 6 months

319

24

Womack & Jones, Lean Thinking

Where did this thing called Operations Management come from?

OM and Services Supply Chain Thinking Historical development of OM

Monday, 8 February 2010

OM and Services

Monday, 8 February 2010

OM and Services
Goods
Tangible Can be inventoried No interaction between customer and process

Services
Intangible Cannot be inventoried Direct interaction between customer and process

Monday, 8 February 2010

OM and Services

Monday, 8 February 2010

OM and Services

Monday, 8 February 2010

OM and Services

70% of GDP SA service sector: 67% of employment*

*HSRC, 2004
Monday, 8 February 2010

OM and Services

Goods Product

Services

Monday, 8 February 2010

OM and Services

Monday, 8 February 2010

OM and Services
Goods Product
Services

Implications for quality? Can we apply OM outside of

operations?
Monday, 8 February 2010

Development of OM
Industrial Revolution Moving assembly line Operations research IT and business systems

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 Scientic management Hawthorne studies Production management TPS & Lean Systems integration

Monday, 8 February 2010

Tables and charts extracted from Davis & Heineke (2005) Operations Management

Tuesday, 9 February 2010