Chapter 1, Heizer/Render, 5th edition

download report

Transcript Chapter 1, Heizer/Render, 5th edition

Operations
Management
Operations and Productivity
Chapter 1
1
Outline
 Global company profile: Whirlpool
 What is Operations Management?
 The heritage of Operations Management
 Why study OM?
 What Operations Managers do
 Organizing to produce goods and services
 Where are the OM jobs?
Exciting new trends in Operations Management
 Operations in the service sector
 The Productivity challenge
2
Learning Objectives
When you complete this chapter, you should be
able to:
 Identify or Define:
Production and productivity
Operations Management (OM)
What operations managers do
Services
 Describe or Explain:
A brief history of operations management
The future of the discipline
Measuring productivity
3
Whirlpool Case Example
 Change in attitude - employees “live
quality”
Training - “use your heads as well as
your hands”
 Flexible work rules
 Gain-sharing
 Global procurement
 Role of information/information
technology
Adoption of a Worldwide strategy
4
What Is Operations Management?
 Production is the creation of goods and
services
Let’s define goods and services with
specific examples
5
Characteristics of Goods
 Tangible product
 Consistent product definition
 Production usually separate from
consumption
 Can be inventoried
 Low customer interaction
e.g. :Pencil Production
6
Characteristics of Service
 Intangible product
 Produced & consumed at same
time
 Often unique
 High customer interaction
 Inconsistent product definition
e.g. :Taxi Service
 Often knowledge-based
 Frequently dispersed
7
Goods Versus Services
Goods
Can be resold
 Can be
inventoried
 Some aspects of
quality
measurable
 Selling is distinct
from production
Service
Reselling
unusual
Difficult to
inventory
 Quality difficult to
measure
 Selling is part of
service
8
Goods Versus Services - Continued
Goods
 Product is
transportable
 Site of facility
important for cost
 Often easy to
automate
 Revenue generated
primarily from
tangible product
Service
 Provider, not
product is
transportable
 Site of facility
important for
customer contact
 Often difficult to
automate
 Revenue generated
primarily from
intangible service.
9
What Is Operations Management?
Operations management
There are two ways to define operations management (OM).
by what it does. Put simply, operations management is the business function that manages
that part of a business that transforms raw materials and human inputs into goods and
services of higher value. (Traditionally)
A second way to define operations management is to do so in context of the overall activities
of the firm.
The second approach starts by recognizing that a business is really a set of processes, Each
process has a job to do and each should be measured on how effective it is in achieving the
desired outcomes.
Most companies are engaged in four core business processes :
•Attract customers
•Design and develop products
•Factors of production and transformation into products of value,
•Providing business support services needed to effectively operate as a business.
10
Significant Events in OM
 Division of labor (Smith, 1776)
 Standardized parts (Whitney, 1800)
 Scientific management (Taylor, 1881)
 Coordinated assembly line (Ford
1913)
 Gantt charts (Gantt, 1916)
 Motion study (the Gilbreths, 1922)
 Quality control (Shewhart, 1924)
11
Significant Events - Continued
 CPM/PERT (Dupont, 1957)
 MRP (Orlicky, 1960)
 CAD
 Flexible manufacturing systems (FMS)
 Manufacturing automation protocol
(MAP)
 Computer integrated manufacturing
(CIM)
12
Why Study OM?
 OM is one of three major functions
(marketing, finance, and operations) of
any organization
 We want (and need) to know how goods
and services are produced
 We want to know what operations
managers do
OM is such a costly part of an
organization
13
What Operations Managers Do
 Plan
(For effective planning seeks we should answer these questions)
What should the firm do?
When must the firm achieve these goals?
Who is responsible for doing it?
How should this be done?
How should performance be measured?
 Organize
 Staff
 Lead
 Control
14
Ten Critical Decisions
 Service, product design
 Quality management
 Process, capacity design
 Location
 Layout design
 Human resources, job design.
 Supply-chain management
 Inventory management
 Scheduling
 Maintenance
15
Organizational Functions
Marketing
Gets customers
Operations
creates product or service
Finance/Accounting
Obtains funds
Tracks money
16
Where Are the OM Jobs?
 Technology/methods
 Facilities/space utilization
 Strategic issues
 Response time
 People/team development
 Customer service
 Quality
 Cost reduction
 Inventory reduction
 Productivity improvement
17
New Challenges in OM
From
 Local or national
focus
 Batch shipments
 Low bid purchasing
To
 Global focus
 Just-in-time
 Supply chain
partnering
 Lengthy product
development
 Rapid product
development,
alliances
 Standard products
 Job specialization
 Mass
customization
 Empowered
employees, teams
18
Development of the Service
Economy
U.S. Employment, % Share
80
United States
%70
60
Services
50
40
Canada
250
France
200
Italy
150
Industry
30
Britain
20
Japan
10
U.S. Exports of Services
In Billions of Dollars
Services as a Percent of GDP
Farming
0
1850 75 1900 25 50 75 2000
100
50
W Germany
1970
1991
40 50 60 70
Percent
0
1970 75 80 85 90 95 2000
Year 2000 data is estimated
19
The Economic System Transforms
Inputs to Outputs
Inputs
Land, Labor,
Capital,
Management
Process
The economic system
transforms inputs to outputs
at about an annual 1.7%
increase in productivity
(capital 38% of 1.7%), labor
(10% of 1.7%), management
(52% of 1.7%)
Outputs
Goods and
Services
Feedback loop
20
Productivity
 Measure of process improvement
 Represents output relative to input
Productivity
Units produced
= Input used
 Productivity increases improve standard of
living
 From 1889 to 1973, U.S. productivity
increased at a 2.5% annual rate
21
Measurement Problems
 Quality may change while the quantity of
inputs and outputs remains constant
 External elements may cause an increase
or decrease in productivity
Precise units of measure may be lacking
22
Productivity Variables
 Labor - contributes about 10% of the
annual increase
 Capital - contributes about 32% of the
annual increase
Management - contributes about 52% of
the annual increase
23
Jobs in the U.S
6%
5%
Education, Health, etc.
5%
Manufacturing
3%
1%
6%
Retail Trade
State & Local Gov't
14%
Finance, Insurance
26%
Wholesale Trade
Transport, Public Util.
16%
Construction
Federal Government
18%
Mining
24
Productivity Growth 1971- 1992
Labor
5
4,5
% per year
4
3,5
3
United States
West Germany
Japan
2,5
2
1,5
1
0,5
0
Whole Economy
Manufacturing
25
Service Productivity
 Typically labor intensive
 Frequently individually processed
 Often an intellectual task performed by
professionals
 Often difficult to mechanize
 Often difficult to evaluate for quality
26