Lecture 1 Operations Management Ch1 Ke Mahasiswa

Today's AgendaOperations ModelEvolution of Operations ManagementProductivity CalculationOrder Qualifier and Order WinnerCopyright 2011 John Wiley & Sons, Inc.1-*

Copyright 2011 John Wiley & Sons, Inc.

What Operations and Supply Chain Managers DoWhat is Operations Management?design, operation, and improvement of productive systemsWhat is Operations?a function or system that transforms inputs into outputs of greater valueWhat is a Transformation Process?a series of activities along a value chain extending from supplier to customeractivities that do not add value are superfluous and should be eliminated

Copyright 2011 John Wiley & Sons, Inc.1-*


Transformation ProcessPhysical: as in manufacturing operationsLocational: as in transportation or warehouse operationsExchange: as in retail operationsPhysiological: as in health carePsychological: as in entertainmentInformational: as in communication



Operations as a Transformation ProcessCopyright 2011 John Wiley & Sons, Inc.1-*INPUT MaterialMachinesLaborManagementCapitalTRANSFORMATIONPROCESSOUTPUT GoodsServicesFeedback & Requirements


Copyright 2011 John Wiley & Sons, Inc.Copyright 2011 John Wiley & Sons, Inc.

Operations FunctionOperationsMarketingFinance and AccountingHuman ResourcesOutside Suppliers1-*


Evolution of Operations and Supply Chain ManagementCraft productionprocess of handcrafting products or services for individual customersDivision of labordividing a job into a series of small tasks each performed by a different workerInterchangeable partsstandardization of parts initially as replacement parts; enabled mass productionCopyright 2011 John Wiley & Sons, Inc.1-*


Evolution of Operations and Supply Chain ManagementScientific managementsystematic analysis of work methodsMass productionhigh-volume production of a standardized product for a mass marketLean productionadaptation of mass production that prizes quality and flexibilityCopyright 2011 John Wiley & Sons, Inc.1-*


Historical Events in Operations ManagementCopyright 2011 John Wiley & Sons, Inc.1-*

EraEvents/ConceptsDatesOriginatorIndustrialRevolutionSteam engine1769James WattDivision of labor1776Adam SmithInterchangeable parts1790Eli WhitneyScientific ManagementPrinciples of scientificmanagement1911Frederick W. TaylorTime and motion studies1911Frank and Lillian GilbrethActivity scheduling chart1912Henry GanttMoving assembly line1913Henry Ford



EraEvents/ConceptsDatesOriginatorHuman RelationsHawthorne studies1930Elton MayoMotivation theories1940sAbraham Maslow1950sFrederick Herzberg1960sDouglas McGregorOperations ResearchLinear programming1947George DantzigDigital computer1951Remington RandSimulation, waitingline theory, decisiontheory, PERT/CPM1950sOperations research groupsMRP, EDI, EFT, CIM1960s, 1970sJoseph Orlicky, IBMand others



EraEvents/ConceptsDatesOriginatorQualityRevolutionJIT (just-in-time)1970sTaiichi Ohno (Toyota)TQM (total qualitymanagement)1980sW. Edwards Deming, Joseph JuranStrategy andoperations1980sWickham Skinner, Robert HayesReengineering1990sMichael Hammer,James ChampySix Sigma1990sGE, Motorola



EraEvents/ConceptsDatesOriginatorInternet RevolutionInternet, WWW, ERP, supply chain management1990sARPANET, TimBerners-Lee SAP,i2 Technologies,ORACLE, DellE-commerce2000sAmazon, Yahoo, eBay, Google, and othersGlobalizationWTO, European Union, Global supply chains, Outsourcing, Service Science1990s2000sChina, India, emerging economies



EraEvents/ConceptsDatesOriginatorGreen RevolutionGlobal warming, An Inconvenient Truth, KyotoTodayNumerous scientists, statesmen and governments


Evolution of Operations and Supply Chain ManagementSupply chain managementmanagement of the flow of information, products, and services across a network of customers, enterprises, and supply chain partners1-*Copyright 2011 John Wiley & Sons, Inc.


ProductivityProductivityratio of output to inputOutputsales made, products produced, customers served, meals delivered, or calls answeredInputlabor hours, investment in equipment, material usage, or square footage



Strategy and OperationsHow the mission of a company is accomplishedProvides direction for achieving a missionUnites the organizationProvides consistency in decisionsKeeps organization moving in the right directionCopyright 2011 John Wiley & Sons, Inc.1-*



Strategic Planning1-*Missionand VisionCorporateStrategyOperationsStrategyMarketingStrategyFinancialStrategyVoice of the BusinessVoice of the Customer


Order Winnersand Order QualifiersCopyright 2011 John Wiley & Sons, Inc.1-*Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan Betts, Operations and Process Management, Prentice Hall, 2006, p. 47


Operations ObjectivesCostSpeedQualityFlexibility1-*

Positioning the Firm: CostWaste eliminationrelentlessly pursuing the removal of all wasteExamination of cost structurelooking at the entire cost structure for reduction potentialLean productionproviding low costs through disciplined operations



Positioning the Firm: SpeedFast moves, Fast adaptations, Tight linkagesInternetCustomers expect immediate responsesService organizationsalways competed on speed (McDonalds, LensCrafters, and Federal Express)Manufacturerstime-based competition: build-to-order production and efficient supply chainsFashion industrytwo-week design-to-rack lead time of Spanish retailer, ZaraCopyright 2011 John Wiley & Sons, Inc.1-*


Positioning the Firm: QualityMinimizing defect rates or conforming to design specificationsRitz-Carlton - one customer at a timeService system designed to move heaven and earth to satisfy customerEmployees empowered to satisfy a guests wish Teams set objectives and devise quality action plansEach hotel has a quality leader Copyright 2011 John Wiley & Sons, Inc.1-*


Positioning the Firm: FlexibilityAbility to adjust to changes in product mix, production volume, or designMass customization: the mass production of customized partsNational Bicycle Industrial Companyoffers 11,231,862 variationsdelivers within two weeks at costs only 10% above standard modelsCopyright 2011 John Wiley & Sons, Inc.1-*



Operations StrategyProducts1-*ServicesProcessandTechnologyCapacityHumanResourcesQualityFacilitiesSourcingOperatingSystems


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Lecture 1 Operations Management Ch1 Ke Mahasiswa