IE 31: Module 7

    Cards (29)

    • Production - The process of creating goods and services through a production system.
    • Production system – a manufacturing subsystem that
      combines resources and utilizes various functions to
      transform inputs into some desired outputs. Its functions
      include design, production, distribution, & servicing.
    • INPUT - Involves capturing and assembling elements
      that enter the system to be processed (e.g., raw
      materials, energy, data, human effort)
      PROCESS - Involves transformation processes that
      convert input into output (e.g., manufacturing
      process, service processes, sophisticated
      calculations)
      OUTPUT – the transformed elements that have been
      produced by processes to their ultimate form (e.g.,
      finished products, rendered service)
    • Physical
      • Converts raw materials into a finished good (manufacturing industries)
    • Locational
      • Transportation of an entity from one place to another (transportation services, distribution services)
    • Exchange
      • Involves retailing, the exchange of a good for money (supermarkets, department stores)
    • Storage
      • Involves storing of materials prior delivery to consumers or customers (Warehousing services)
    • Physiological
      • Concerned with health care and safety of individuals (health care, grooming, hospitals)
    • Informational
      • Involves transfer of data, information, or knowledge (Telecommunications, information systems, schools)
    • The major activities in any organization is divided
      into 3 main categories: Finance (including
      Accounting, the systematic recording, reporting,
      and analysis of financial transactions of a
      business), Marketing, and Operations.
    • The Management Process
      PLANNING
      • Managers determine objectives and goals for organizations and develop programs,
      policies, and procedures that will help organizations attain them
      • Managers determine subordinate plans for every department, group, and individual.
      ORGANIZING
      • Managers develop a structure of individuals, groups, departments, and divisions to
      achieve objectives.
      STAFFING
      • Managers determine personnel requirements, including the
      best way to recruit, train, retain, and terminate employees for
      achieving objectives.
    • The Management Process
      LEADING
      • Managers lead, supervise, and
      motivate personnel to achieve
      objectives.
      CONTROLLING
      • Managers develop the standards and
      communication networks necessary to ensure
      that the enterprise is pursuing appropriate plans
      and achieving objectives.
      • Measures results, evaluates their acceptability,
      and instituting corrective action if necessary
    • Areas of Management Decisions
      STRATEGIC DECISIONS
      These are long-term business decisions that
      impact the company’s long-range effectiveness in
      terms of how it can address customer needs –
      aligned to corporate strategy. Making these
      decisions are critical because they greatly affect
      the entire operations
      • What products/service will we offer?
      • How will we make the product?
      • Where do we locate the facilities?
      • How much capacity do we need?
      • When should we add capacity?
    • Areas of Management Decisions
      TACTICAL DECISIONS
      Also known as an intermediate-term decision, this
      addresses how to efficiently utilize resource (i.e.,
      schedule material and labor) with constraints to strategic
      decisions. These are important because they help
      • How many workers do we need?
      • When do we need them?
      • Should we work overtime or on shifting?
      • When to order/deliver material?
      • Do we store finished goods inventory to cushion
      possible demand increase?
    • Areas of Management Decisions
      PLANNING AND CONTROL DECISIONS
      These are the short-term decisions that help breakdown
      tactical decisions into immediately realizable goals and
      objectives. The tactical decisions serve as the operating
      constraint to operational planning and control decisions,
      which means that these decisions are restricted to the
      tactical decisions want to achieve.
      • Schedule – who will do what today/this week?
      • How to deal with equipment breakdown?
      • How to deal with shortages (of material)?
      • How to adjust with quality problem?
    • Critical Strategy Related Decisions in OM
      LOCATION STRATEGY
      Facility location decisions for both manufacturing and
      service organizations may determine the ultimate success
      of the operation. Errors made at this juncture may
      overwhelm other aspects of the business.
      Sample strategy options: Near supplier or Near
      customers?
    • LAYOUT STRATEGY
      Facility Layouts refers to represent the physical
      arrangement of equipment and different components of a
      facility. Capacity, use of personnel, procurement, and
      inventory planning will be influenced by layout. Processes
      and material must be sensibly located in relation to each
      other.
      Sample strategy options: Work cells or Assembly line?
      Process layout or Product layout?
    • Critical Strategy Related Decisions in OM
      PRODUCT STRATEGY - determines production
      methods and factors
      ● Includes transformation processes,
      production costs, quality, and human resource
      decisions
      ● Product decisions set cost and quality limits
      ● Product-focused organizations seek
      competitive advantage; they strive to improve
      products faster than competition
      Sample strategy options:
      Customized or
      Standardized?
    • PROCESS STRATEGY
      ● Process options focus on how products are
      made
      ● Continuous improvement of production
      process
      ● Decisions commit management to
      technology, human resource utilization, and
      maintenance approaches
      ● Expense and capital commitments
      determine basic cost structure
      ● Emphasis on people responsible for product
      creation and development aligned with
      company goals
      Sample strategy options: Process focus vs. Repetitive vs. Mass Production
    • Examples of Layout strategies:
      PROCESS LAYOUT
    • Examples of Layout strategies:
      Group Technology – a philosophy in which similar parts are grouped into families and the processes required to make parts are arranged in a specialized work cell.
    • Examples of Layout strategies:
      Kanban is a scheduling system to improve
      manufacturing efficiency. The system
      takes its name from the cards that track
      production within a factory.
    • Critical Strategy Related Decisions in OM
      HUMAN RESOURCE STRATEGY - refers to the decisions related to the human resources of
      an organization, which are integral and expensive parts
      of the total systems design.
      ● These strategies help determine quality of work life
      provided, the talent and skills required, and their costs.
      Sample strategy options: Specialized or Enriched jobs?
    • MAINTENANCE AND RELIABILITY
      ● These are the decisions aligned with the design and
      maintenance of systems to achieve its expected
      performance and quality standard.
      ● Good maintenance drives out system variability and
      helps reduce uncertainty.
      ● The objective of maintenance and reliability is to
      maintain the capability of the system while controlling
      costs.
      Sample strategy options: Improving individual
      components or Provide redundancy (having back-up or
      spare parts) ? Preventive maintenance or Breakdown
      maintenance?
    • QUALITY STRATEGY
      -These decisions determine the efforts needed to maintain
      the level of quality desired for operations. These are
      critical decisions since quality, or lack there of, affects the
      entire organization from supplier to customer and product
      design to maintenance.
      Building an organization that can achieve quality also
      affects the entire organization and is a demanding task.
      Sample Strategy options: Source inspection or Sampling
      inspection?
    • PRODUCTION PLANNING AND CONTROL
      A critical part of operations wherein decisions about the set
      of activities that creates value in the form of goods and
      services by transforming input to output take place. This
      dictates the combination of the resources, their proper
      volumes, and the timing in which they are used within the
      production process.
      Sample Strategy options: Push system or Pull system? 2
      shift production + overtime or 3 shift production?
    • "Push type" means “Make
      to Stock” in which the
      production is not based on
      capacity utilization.
      "Pull type" means “Make
      To Order” in which the
      production is based on
      actual demand.
    • SUPPLY CHAIN STRATEGY
      ● Supply chain setup decisions integrate procurement,
      transformation, and delivery activities
      ● Emphasis on quality, delivery time, innovation, and
      price
      ● Mutual respect between buyers, suppliers, and
      distributors
      ● Operations managers prioritize dimensions aligned with
      business goals
      Sample strategy: Low-cost strategy vs. Response
      strategy vs. Differentiation strategy
    • A good is the tangible output of a process, a physical
      presence, a concrete output of manufacturing. Goods are
      products that can be seen and touched.
      A service is an intangible output of a process. These are
      products that cannot be seen or touched but can be felt
      and appreciated and are provided to customers according to
      their expectation and satisfaction.