Operations Management Krajewski Chapter 1

7/17/2019 Operations Management Krajewski Chapter 1

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Operations Management(Processes and Supply Chain)

10th Edition.

(Krajes!i" #it$man" %

Malhotra)&ecturer' M. ais



Outline o* Chapters• Part 1 (Competing ith Operations)

– +sing Operations to Compete

– ,ecision Ma!ing Models – Managing E-ectie Projects

• Part (,esigning and Managing Processes) – ,eeloping a Process Strategy

– naly$ing Process

– Managing /uality

– Planning Capacity – aiting &ine Models

– Managing Process Constraints

– ,esigning &ean Systems

• Part (,esigning and Managing Supply Chains) – Managing 2nentories

– Special 2nentory Models

– ,esigning E-ectie Supply Chain

– &ocating 3acilities

– 2ntegrating the Supply Chain

– Managing Sustaina4le Supply Chain

– 3orecasting ,emand

– Planning and Scheduling Operations

– Planning Su5cient #esources – &inear Programming Models



Chapter 1+sing Operations to Compete

1. Operations Management (OM) and SupplyChain Management (SCM) cross theOrgani$ation.

. 6istorical Eolution o* SCM and OM.. Process 7ie.

8. 9he Supply Chain 7ie.

:. Competitie Priorities and Capa4ilities.

;. Operations Strategy as a Pattern o*,ecisions.

<. ddressing the Challenges in OM.

8



1. Operations Management (OM) and SupplyChain Management (SCM) cross the

Organi$ation.

• Operations Management is the systematic design" direction"and control o* processes that trans*orm inputs into serices andproducts *or internal" as ell as e=ternal" customers.

• Process is any actiity or group o* actiities that ta!es one ormore inputs" trans*orms them" and proides one or more outputs

*or its customers.• n Operation is a group o* resources per*orming all or part o* one

or more processes.

• Supply Chain is an interrelated series o* processes ithin andacross >rms that produces a serice or product to the satis*action

o* customers.• Supply Chain Management* is the synchroni$ation o* a >rm?s

processes ith those o* its suppliers and customers to match the@o o* materials" serices" and in*ormation ith customerdemand.

:*The terms supply chain and value chain are sometimes used interchangeably.



• OM and SCM spreads across all thedepartment o* any organi$ation andto 4e a success*ul manager

understanding and proper e=ecutiono* such processes is desira4le.

• Chie* Operating O5cer (COO) or 7ice

President o* Manu*acturing are thetitles used in the industry *oroperations manager superising the

hole organi$ations? process. ;


Organi$ation.



<


Organi$ation.



• 2n >gure 1.1 4asic *unctions li!e Operations" Mar!eting"and 3inance are shon.

• 3inance generate resources and then decide here andho to inest them and conert them into assets and

material inputs. Operations trans*orms these inputs intooutputs and then mar!eting is responsi4le *or producingsales reenue o* the outputs.

• 3unctions such as accounting" in*ormation systems"human resources" and engineering ma!e the >rm

complete 4y proiding essential in*ormation" serices" andother managerial support.

• ll these *unctions proide a strategic directions o* theorgani$ation and almost all o* these are essential *or anyorgani$ation.

A


Organi$ation.



B 6istorical Eolution o* SCM and

OM

• Modern operations and SCM has 4een around *or nearly 00 years.

• ames att inented the steam engine in 1<A: and su4seDuently railroad*acilitated e5cient and *ast moement o* goods.

• ith the inention o* the cotton gin in 1<8" Eli hitney introduced theconcept o* interchangea4le parts.

• 9hese deelopments and interchangea4le machine parts ignited theindustrial reolution in England" rest o* the Europe" and +S.

• 9he internal com4ustion engine" steamFpoered ships" metallurgy o* ironma!ing" largeFscale production o* chemicals" and inention o* machinetools" among others innoations laid the *oundations o* modernmanu*acturing.

• 9echnological 4rea!throughs ere also inspired 4y the creation o* amechanical computer 4y Charles Ga44age in the early part o* thenineteenth century.

• 6e also pioneered the concept o* diision o* la4or" hich laid the*oundation *or scienti>c management o* operations and supply chainmanagement that as *urther improed upon 4y 3rederic! 9aylor in 111.




OM

• 9hree other landmar! eents *rom the tentieth century de>nethe history o* operations and supply chain management.

• First is the inention o* the assem4ly line *or the Model 9 car 4y6enry 3ord in 10. 9he era o* mass production as 4orn" herecomple= products li!e automo4iles could 4e manu*actured in

large num4ers at a-orda4le prices through repetitiemanu*acturing.

• Second" l*red Sloan in the 10s introduced the idea o*strategic planning *or achieing product proli*eration and ariety"ith the nely *ounded Heneral Motors Corporation o-ering Ia

car *or eery purse and purpose.J• Finally" ith the pu4lication o* the 9oyota Production System in

1<A" 9aiichi Ohno laid the groundor! *or remoing aste*ulactiities *rom an organi$ation" a concept that e e=plore *urtherin this 4oo! hile learning a4out lean systems.

10




OM

• 9he recent history o* operations and supply chains oer the pastthree decades has 4een steeped in technological adances.

• 9he 1A0s ere characteri$ed 4y ide aaila4ility o* computeraided design (C,)" computer aided manu*acturing (CM)" andautomation.

• 2n*ormation technology applications started playing anincreasingly important role in 10s" and started connecting the>rm ith its e=tended enterprise through Enterprise #esourcePlanning Systems and outsourced technology hosting *or supplychain solutions.

•

Serice organi$ations li!e 3ederal E=F press" +nited Parcel Serice(+PS)" and almart also 4ecame sophisticated users o*in*ormation technology in operations" logistics" and managemento* supply chains.

• 9he ne millennium has seen an acceleration o* this trend" alongith an increased *ocus on sustaina4ility and the natural

enironment. 11



B Process 7ie

• Process can 4e considered at the heart o* anorgani$ation.

• process can hae its on o4jecties" inputs"

and outputs.• 3igure 1. (next slide) shos ho processes

or! in an organi$ation.

• ny process has inputs and outputs. 2nputs can

include a com4ination o* human resources(or!ers and managers)" capital (eDuipmentand *acilities)" purchased materials andserices" land" and energy.

1



B Process 7ie

1



B Process 7ie

• 3igure 1. can represent a hole >rm" adepartment" a small group" or een a singleindiidual.

• 2nputs can 4e *rom internal (daily salesreport" coo!ing material *or coo! in arestaurant) or external (li!e *uel *or,eaoo) customers.

• lso" outputs can 4e *or internal (preparingcar parts *or >nal assem4ly) or external customers (any >nal products or serices).

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B Process 7ie

• lmost all o* these processes ould 4e presents insome *orm or the other in all organi$ations.

• Each one has inputs and uses processes at ariousoperations to proide outputs. 9he dashed lines

represent to special types o* input' – Participation 4y customers (students? participation

during class discussion) and

– 2n*ormation on per*ormance *rom 4oth internal and

e=ternal sources (customer serices" inentory leels).• Managers need all types o* in*ormation to

administer e-ectiely.

1:



B Process 7ie

• Nested Processes is a concept o* aprocess ithin a process.

• process can 4e diided into su4F

processes as one person or onedepartment may 4e una4le to per*orm allparts o* the process" or di-erent parts o*the process may reDuire di-erent s!ills.

• Some parts o* the process may 4edesigned *or routine or! hile other partsmay 4e geared *or customi$ed or!.

1;



B Process 7ie

• Services and Manufacturing Processes are the to major types o* processes.

• Serice processes perade the 4usiness

orld and hae a prominent place in ourdiscussion o* operations management.

• Manu*acturing processes are alsoimportant ithout them the products e

enjoy as part o* our daily lies ould note=ist. 2n addition" manu*acturing gies riseto serice opportunities.

1<



B Process 7ie

1A

Continuum o* Characteristics

o* Manu*acturing and SericeProcesses



B Process 7ie

• 9he to main di-erences are (i) nature o* theoutput and (ii) degree o* contact ith thecustomers.

•

2n general" manu*acturing processes also haelonger response times" are more capitalintensie" and their Duality can 4e measuredmore easily than those o* serice processes.

• Manu*acturing processes conert materialsinto goods that hae a physical *orm e callproducts.

1



B Process 7ie

1. Physical properties2. Shape

3. Size (e.g., length, breadth, and height of a rectangularblock of wood

!. Surface "nish#. $oining parts and %aterials

•. 9he outputs *rom manu*acturing processes can 4eproduced" stored" and transported in anticipation o**uture demand.

•. 2* a process does not change the fve properties o*materials on at least one o* these >e dimensions" it isconsidered a serice (or nonFmanu*acturing) process.

•. Serice processes tend to produce intangi4le"

perisha4le outputs. 0



B Process 7ie

• 9here can 4e similarities or presence o*product and serice under same roo* as inrestaurants or hospitals.

• 9here can 4e a de4ate a4out as ho toclassi*y an organi$ation eithermanu*acturing or serice 4asedorgani$ation.

• 3or this" e hae to loo! at the processesand !no the !ind and impact and impacto* that process on the organi$ation.

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Operations Management Krajewski Chapter 1