Marketing Presentation

© Prentice Hall, 2005 1 - 1


ObjectivesObjectivesObjectivesObjectives1. Definitions of production, productivity, and quality

2. An understanding of the importance of operations and production strategies, systems, and processes

3. Insights into the role of operations management concepts in the workplace

4. An understanding of how operations control procedures can be used to control production

5. Insights into operations control tools and how they evolve into a continual improvement approach to production management and control


ProductionProductionProductionProductionDefining Production

Productivity

Productivity = Outputs / Inputs

Traditional strategies for increasing productivity by improving :

1. Effectiveness of the organizational workforce through training

2. Production process through automation

3. Product design to make products easier to assemble

4. Production facility by purchasing more modern equipment

5. Quality of workers hired to fill open positions


ProductionProductionProductionProductionQuality and Productivity

Focus on Continual Improvement

Focus on Quality and Integrated Operations

Quality AssuranceStatistical Quality Control“No Rejects” Philosophy

Quality Circles

Automation

Strategies, Systems, and Processes


ProductionProductionProductionProduction


ProductionProductionProductionProduction


Operations ManagementOperations ManagementOperations ManagementOperations ManagementDefining Operations Management

Performance of managerial activities entailed in:

Selecting

Designing

Operating

Controlling

Updating production systems


Operations ManagementOperations ManagementOperations ManagementOperations Management


Operations ManagementOperations ManagementOperations ManagementOperations ManagementOperations Management Considerations

Involves managers

Takes place within the context of objectives and policies

Standards for effectiveness and efficiency


Operations ManagementOperations ManagementOperations ManagementOperations ManagementOperations Management Considerations (continued)

Capacity StrategyFive Steps in Capacity Decisions

1. Measure the capacity of currently available facilities

2. Estimate future capacity needs on the basis of demand forecasts

3. Compare future capacity needs and available capacity

4. Identify ways to accommodate long-range capacity changes

5. Select best alternative based on quantitative and qualitative evaluation



Location StrategyFactors in a Good Location

Nearness to market and distribution centers Nearness to vendors and resources Requirements of federal, state, and local governments The character of direct competition The degree of interaction with the rest of the corporation The quality and quantity of labor pools The environmental attractiveness of the area Taxes and financing requirements Existing and potential transportation The quality of utilities and services



Product Strategy

Process StrategyTypes of Processes

1) Continuous process2) Repetitive process3) Job-shop process

Layout Strategy1. Product layout2. Process (functional) layout3. Fixed-position layout


Operations ManagementOperations ManagementOperations ManagementOperations Management



Human Resources Strategy

Human resource imperatives:

1. Optimize individual, group, and organizational effectiveness

2. Enhance the quality of organizational life

Operational Tools in Human Resources Strategy Manpower planning

Job design

Work methods analysis

Motion-study techniques

Work measurement methods


Operations ControlOperations ControlOperations ControlOperations ControlJust-in-Time Inventory Control

Just-in-time (JIT)

Best Conditions for JIT

Advantages of JIT

Characteristics of JIT

1. Closeness of suppliers

2. High quality of materials purchased from suppliers

3. Well-organized receiving and handling of materials purchased

4. Strong management commitment


Operations ControlOperations ControlOperations ControlOperations ControlMaintenance Control

Pure-preventive maintenance policy

Pure-breakdown (repair) policy

Cost ControlStages in Cost Control

1. Establishing standard or planned cost amounts

2. Measuring actual costs incurred

3. Comparing planned costs to incurred costs

4. Making changes to reduce actual costs to planned costs


Operations ControlOperations ControlOperations ControlOperations ControlBudgetary Control

Potential Pitfalls of Budgets

1. Placing too much emphasis on relatively insignificant expenses

2. Increasing budgeted expenses without adequate information

3. Ignoring the fact that budgets must be changed periodically

Human Relations Considerations in Using Budgets

Reducing Human Relations Problems


Operations ControlOperations ControlOperations ControlOperations ControlRatio Analysis

1. Liquidity ratios2. Leverage ratios3. Activity ratios4. Profitability ratios

Using Ratios to Control Organizations Evaluate all ratios simultaneously Compare computed values with industry averages Incorporate trend analysis

Materials ControlProcurement of MaterialsReceiving, Shipping, and TraffickingInventory and Shop-Floor Control


Operations ControlOperations ControlOperations ControlOperations Control


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsUsing Control Tools to Control Organizations

InspectionTo Inspect or Not to Inspect

Management by ExceptionEstablishing Rules

Management by Objectives


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsBreak-Even Analysis

Basic Ingredients of Break-Even Analysis

1. Fixed costs

2. Variable costs

3. Total costs

4. Total revenue

5. Profits

6. Loss

7. Break-even point


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsBreak-Even Analysis (continued)

Types of Break-Even Analysis Algebraic Break-Even Analysis

BE = FC / ( P - VC )

Graphic Break-Even Analysis

Advantages of Using the Algebraic and Graphic Break-Even Methods

Control and Break-Even Analysis


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control Tools


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control Tools


Selected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsSelected Operations Control ToolsOther Broad Operations Control Tools

Decision Tree Analysis

Process Control

Value Analysis

Computer-Aided Design

Computer-Aided Manufacturing


QuestionsQuestions

Documents

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