Production and Operations Management

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CHAPTER 8

• Production and Operations Management

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Operations Management

• The development and administration of the
  activities involved in transforming resources
  into goods and services.

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Operations Management

• Operations vs. production or manufacturing
• - production and manufacturing are terms which
  represent the activities involved in producing a
  TANGIBLE product.

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The Transformation Process

• Conversion of INPUTS to OUTPUTS
• Inputs your resources
• Outputs goods, services and ideas

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Operation Management in Service Industries

• Service are intangible
• Resources you use may be different
• Goods manufactured prior to purchase..not the
  case with servicesafter-the-fact

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Manufacturers Vs. Service Providers

• 5 basic differences
• (1) Nature and consumption of output
• - Tangible vs. intangible products
• - Level of customer contact
• Uniformity of inputs
• - easier for manufacturers

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Manufacturers Vs. Service Providers

• Uniformity of output
• - final product varies in services
• Labor required
• - more labor-intensive (service)
• - more capital intensive (manufacturers)
• Measurement of productivity
• - complex process for service

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Steps in Planning and Designing Operations Systems

• Planning the product
• 2. Designing the operations process a. standardi
  zation b. modular design c. customization

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Steps in Planning and Designing Operations Systems

• Planning capacity
• Planning the facility
• - location
• - layout (fixed, process, product)
• - technology (CAD, CAM, etc.)

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Facility Layouts

• Fixed-position layout All resources needed for a
  product are brought to a
  central location.
• Process layout Layout is organized
  into departments that group related
  processes.
• Product layout Production is broken down
  into relatively simple tasks
  assigned to workers positioned along
  a line.

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Managing Logistics

• Logistics all activities involved in getting
  product to customer

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Types of Inventory
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Managing Inventory

• Inventory control process of determining how
  many supplies and goods are needed and keeping
  track of this
• Economic Order Quantity Model
• Just-in-time Inventory Mgmt.
• Material-Requirements Planning (MRP)

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Managing Quality

• How do you measure quality?
• Traditional view No such thing as defect free
• Cutting costs main goal
• Contemporary view Vital component
• Increased productivity
• happier customers

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National Quality InstitutePrinciples of Business
Excellence

• Leadership through involvement
• Primary focus on stakeholders/customers and the
  market place
• Cooperation and teamwork
• Prevention based on process management

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National Quality InstitutePrinciples of Business
Excellence

• 5. Factual approach to decision making
• 6. Continuous learning and people involvement
• 7. Focus on continuous improvement
• 8. Fulfillment of obligations to all stakeholders
  and society

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Managing Quality

• Quality control
• Total Quality Management
• Both demonstrate a commitment to quality

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ISO 9000

• International Organization for Standardization
• ensure consistent product quality under many
  circumstances
• involves a lot of documentation on training,
  etc.related to any quality processes
• now for service providers too