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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Twenty Two
hapter
Operations & ServiceManagement
2000 by Harcourt, Inc.
ll rights reserved. !e"uests #or per$ission to $a%e copies o# any part o# the
&or% should be $ailed to the #ollo&ing address' Per$issions Depart$ent,Harcourt, Inc., (2)) Sea Harbor Drive, *rlando, +lorida 2--)())).
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Operations Management
/he #ield o# $anage$ent that specialies in the
physical production o# goods or services and uses
"uantitative techni"ues #or solving $anu#acturingproble$s
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
The Organization as an
Operations Management System
Products and FacilitiesProduct design
+acilities layout
Capacity planning
+acilities location
Structure!eporting relationships
/ea$s
Control ProcessesInventory $anage$ent
Productivity
1uality
Operations ManagementInputs
!a& $aterials
Hu$an resources
and, buildings
In#or$ation/echnology
Outputs
Products
Services
Operations Strategy
The Technical Core
Feedback
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Manufacturing and Serice Operations
Service sector has increased three ti$es as #ast as the
$anu#acturing sector
More than onehal# o# all businesses are service
organiations
Manu#acturing organiation3produces physical goods.
Service organiation3produces nonphysical outputs that
re"uire custo$er involve$ent and cannot be stored ininventory.
Service sector has increased three ti$es as #ast as the
$anu#acturing sector
More than onehal# o# all businesses are service
organiations
Manu#acturing organiation3produces physical goods.
Service organiation3produces nonphysical outputs that
re"uire custo$er involve$ent and cannot be stored ininventory.
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Operations Strategy
/he recognition o# the i$portance o# operations to
the #ir$5s success and the involve$ent o# operations
$anagers in the organiation5s strategic planning.
7/26/2019 Chp22wef jw
7/17Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Four Stages of
Operations Strategy
Stage !
Initiates Competitie
"dantage
6dvanced capabilities
developed andsigni#icant input to
strategic process
provided6Concerns'
7e& products
7e& services
7e& technologiesInternational
Stage #
Organizationally
Supportie
6*rganiation5s
co$petitive strategyclosely #ollo&ed and
supported6Concerns'
dvanced process
technologies
7e& plants
8hat to $a%e #or the9nited States
Stage $
Industry Current
6:oals set according to
industry practice
6Concerns'Capital invest$ent
1uality control
Inventory $anage$ent
Capacity
Stage %
&o Inolement
67o positive
contribution to
strategy #or$ulation6Concerns'
Cost
abor e##iciency
Source' ;ased on !.H. Hayes and S.C. 8heel&right, !estoring *ur Co$petitive
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
'esigning Operations
Management System
9sing D+M is etre$ely epensive
D+M o#ten re"uires'
restructuring operations
creating tea$s o# designers
$anu#acturers
+our obEectives o# product design'
producibility
cost
"uality reliability
!eengineering process'
$anage$ent syste$s
Eob design
9sing D+M is etre$ely epensive
D+M o#ten re"uires'
restructuring operations
creating tea$s o# designers
$anu#acturers +our obEectives o# product design'
producibility
cost
"uality
reliability
!eengineering process'
$anage$ent syste$s
Eob design
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Facilities (ayout
Process layout' $achines that per#or$ the sa$e #unction
are grouped together in one location.
Product layout' $achines and tas%s are arranged
according to the se"uence o# steps in the production o# asingle product.
Cellular layout' $achines dedicated to se"uences o#
production are grouped into cells.+iedposition layout' the product re$ains in one location
and the re"uired tas%s and e"uip$ent are brought to it.
Process layout' $achines that per#or$ the sa$e #unction
are grouped together in one location.
Product layout' $achines and tas%s are arranged
according to the se"uence o# steps in the production o# a
single product.
Cellular layout' $achines dedicated to se"uences o#
production are grouped into cells.+iedposition layout' the product re$ains in one location
and the re"uired tas%s and e"uip$ent are brought to it.
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Production Technology
F
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Fle*ible Manufacturing Systems
9se o# auto$ated production lines that can be
adapted to produce $ore than one %ind o# product.
uto$ated #unctions include'
loading unloading
storing parts
changing tools $achining
Support a strategy o# $ass custo$iation.
9se o# auto$ated production lines that can be
adapted to produce $ore than one %ind o# product.
uto$ated #unctions include'
loading
unloading
storing parts
changing tools $achining
Support a strategy o# $ass custo$iation.
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Capacity Planning
Deter$ination and adEust$ent o# an organiation5s abilityto produce products or services to $atch de$and.
Can do several things to increase capacity'
?.create additional shi#ts
2.as% eisting people to &or% overti$e
.outsource or subcontract etra &or%
A.epand a plant and add $ore e"uip$ent
;iggest proble$ #or $ost organiations'
?.ecess capacity
2.add capacity as needed &ithout ecess
Deter$ination and adEust$ent o# an organiation5s abilityto produce products or services to $atch de$and.
Can do several things to increase capacity'
?.create additional shi#ts2.as% eisting people to &or% overti$e
.outsource or subcontract etra &or%
A.epand a plant and add $ore e"uip$ent
;iggest proble$ #or $ost organiations'
?.ecess capacity
2.add capacity as needed &ithout ecess
The +)reen 'ean,
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Inentory Management
/hree types o# inventory'
+inishedgoods inventory' ite$s that have passed
through the entire production process but have not beensold.
8or%inprocess inventory' $aterials $oving through
the stages o# the production process that are not
co$pleted products.
!a& $aterials inventory' basic inputs to the
organiation5s production process.
Office 'epot
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Two -asic 'ecisions that can .elp
Minimize Inentory Concerns
/conomic Order 0uantity Materials 1e2uirement Planning
Manufacturing 1esource Planning3ust4in4time Inentory System
/echni"ue designed to
$ini$ie the total o#
ordering and holding costs
#or inventory ite$s.
Techni2ues forManagement
Dependent de$and
inventory planning and
control syste$ that
schedules the eact a$ount
o# all $aterials re"uired tosupport the desired end
product.
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Managing Productiity
/&o approaches #or $easuring productivity'
/otal #actor productivity' the ration o# total outputs tothe inputs #ro$ labor, capital, $aterials, and energy.
Partial productivity' the ration o# total outputs to a
$aEor category o# inputs.
Productiity is the organization5s output ofgoods and serices diided by its inputs6
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
chieve gro&th by
attracting ne&
custo$ers
chieve gro&th by
attracting ne&
custo$ers
&ay to position #or
the #uture &ay to position #or
the #uture
T0M Can Improe
Operations Management
8ay to $a%e co$pany
one o# the best8ay to $a%e co$pany
one o# the best
T0M (eads To7
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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.
Improing Productiity
Three places to look7
/echnological productivity' the use o# $ore e##icient
$achines, robots, co$puters, and other technologies toincrease output.
8or%er productivity' having &or%ers produce $ore
output in the sa$e ti$e period.
Managerial productivity' $anagers do a better Eob o#running the business.