Operations ManagementPUTTING IT ALL TOGETHER

Producing Value in a Changing Environment

Operations Management: Managing all activities involved in creating value.

Right goods

Right quantities

Right customers

Right time

FROM Efficiency TO Effectiveness

FROM Goods TO Services

FROM Mass Production TO Mass Customization

FROM Local Competition TO Global Competition

FROM Exploiting Environment TO Protecting Environment

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Responsibilities Product – all tangible and

intangible features that create value

Design high quality, on time, within budget

Location

Inventory

Project Scheduling Critical Path Method (CPM)

Managing Value Chains Network of relationships

Enterprise resource planning (ERP) Integrate organization’s

information

flows

Organize Processes Product Layout

Process Layout

Cellular layout

Fixed Position layout

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Face Challenges

Servicescape – environment in which customer and service provider interact. Ambience Functionality Signs, symbols and artifacts

Determine proper capacity

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Changes in Technology

Sophistication Machinery and Equipment

Software and Information Technology

Automation Robots

Software Technologies Computer-aided design (CAD)

drawing and drafting tools

Computer- aided engineering (CAE)

Test, analyze and optimize designs

Computer-aided manufacturing (CAM)

Electronic designing

Computer-integrated manufacturing (CIM: CAD and CAM)

Whole design and production automated

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Focus on Quality

Gives customers what they want!

Total quality management (TQM) Everyone committed to improving

quality Customer focus

Quality throughout

Empowerment of employees

Prevention rather than correction

Continuous improvement

Six Sigma Approach to quality improvement

Reduce defects no more than 3.4

per million opportunities

Extensive training

Baldrige National Quality Program Award/Program to encourage quality

focus

ISO 9000 Certification Network national standards

institutes

Quality in one country = quality another country

ISO 9001 – specifies requirements for quality-management system

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Lean and Green

Lean production – strategies of production to eliminate waste

Just-in-time production Limiting inventory reduces waste

Energy efficient Helps industry, business and environment

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Operations management: Managing all of the activities involved in creating value by producing goods and services and distributing them to customers.

Inventory: Stocks of goods or other items held by organizations.

Critical path method (CPM): A project management tool that illustrates the relationships among all the activities involved in completing a project and identifies the sequence of activities likely to take the longest to complete.

Immediate predecessors: Activities in a project that must be completed before some other specified activity can begin.

Value chain: The network of relationships that channels the flow of inputs, information, and financial resources through all of the processes directly or indirectly involved in producing goods and services and distributing them to customers.

Enterprise Resource Planning (ERP): Software based approach to integrate an organization’s (and in the sophisticated versions, a value chain’s) information flows.

Poka-yokes: Simple methods incorporated into a production process designed to eliminate or greatly reduce errors.

Six Sigma: An approach to quality improvement characterized by very ambitious quality goals, extensive training of employees, and a long-term commitment to working on quality-related issues.

Baldrige National Quality Program: A national program to encourage American firms to focus on quality improvement.

ISO 14000: A family of generic standards for environmental management established by the International Organization for Standardization.