Introduction to Operations Operations -- Prof. Juran.
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Transcript of Introduction to Operations Operations -- Prof. Juran.
Operations -- Prof. Juran
• Intro to Operations Management• Administrative Issues• Basic Definitions• Operations Strategy• Historical Development of OM• Scientific Management• Current Issues in OM• Measures of Productivity
Outline
Operations -- Prof. Juran
• Web site– Mission– Description– Syllabus (note special dates)– Downloads
• Textbook• TAs
About the Class
Operations -- Prof. Juran
What is Operations Management?
The design, control, and improvement of the systems that create and deliver the firm’s primary products and services
Operations -- Prof. Juran
What is a Production System?
A user of resources to transform inputs into some desired outputs
Operations -- Prof. Juran
Important Measures of Performance
Efficiency: Using a minimum of resources
Effectiveness: Creating value for some customer
Operations -- Prof. Juran
Transformations
Physical (Manufacturing) Locational (Transportation) Exchange (Retailing) Storage (Warehousing) Physiological (Health Care) Informational (Telecommunications)
Operations -- Prof. Juran
Manufacturing vs. Services
What differentiates manufacturing operations from service operations?
J&C proposition: All businesses are services
Operations -- Prof. Juran
Operations Strategy
J&C: Setting broad policies and plans for using the resources of the firm to best support its long-term competitive strategy
Juran: Deciding how the firm’s competitive strategy will actually happen, in terms of processes that are more efficient and/or more effective than the competition’s processes.
Operations -- Prof. Juran
Operations Strategy
Key questions:• What business are we in?• Who are the customers?• What do the customers need?• How can we meet those needs more
efficiently/effectively than the competition?
• How is all of this going to change over time?
Operations -- Prof. Juran
Competitive Dimensions
• Cost• Product Quality and Reliability• Delivery Speed• Delivery Reliability• Coping with Changes in Demand• Flexibility and New Product
Introduction Speed• Other Product-Specific Criteria
Operations -- Prof. Juran
Strategic Frameworks
Kaplan and Norton:• Financial• Customer• Internal• Learning and Growth
Operations -- Prof. Juran
Strategic Frameworks
Michael Porter:• Rivalry• Threat of Substitutes• Buyer Power• Supplier Power• Barriers to Entry / Threat of Entry
Operations -- Prof. Juran
Historical Development of OM
• Craft System• Industrial Revolution• Scientific Management• Organizational Science• Operations Research• JIT and TQM• Supply Chain Management• Internet Commerce
Operations -- Prof. Juran
Craft System
Operations -- Prof. Juran
Industrial Revolution
Eli Whitney1765 - 1825
Operations -- Prof. Juran
Scientific Management
Frederick W. Taylor1856 - 1915
Operations -- Prof. Juran
Industrial Revolution
Henry Ford1863 - 1947
Operations -- Prof. Juran
Scientific Management• Frederick Winslow Taylor,
(1856-1915), American industrial engineer.
• In 1878, he began working at the Midvale Steel Company.
• Developed measures of productivity based on time & motion studies.
• Became rich from 100+ patents including tempered steel.
Operations -- Prof. Juran
Taylor’s Industrial Environment
• Large numbers of unskilled workers
• Many immigrants who often didn’t speak English
• Homogeneous markets meant great returns to scale (e.g, Model T dropped in price from $1000 to $360)
• Management not viewed as a general or learnable skill
Operations -- Prof. Juran
Scientific ManagementScientific Management
• Defined by Frederick Taylor, late 1800s.• The systematic study of the
relationships between people and tasks to redesign the work for higher efficiency.– Taylor sought to reduce the time a
worker spent on each task by optimizing the way the task was done.
• Significant improvements in productivity
Operations -- Prof. Juran
Taylor’s 4 Principles• Develop a science for each element
of work• Select, train, and develop workers• Cooperate with workers (share the
savings – more $$$ for better performance)
• Divide work and responsibility equally
Operations -- Prof. Juran
Resistance to Taylor• Separation of work from planning
destroyed the traditional craft system – ‘money substituted for pride’
• Unions mistrusted – Taylor reduced work force from 450 to 150 on first job
• Some firms cut rates after changes• Legislation to prevent time studies in
government jobs.
Operations -- Prof. Juran
Frank & Lillian GilbrethTime and Motion Studies
Film
Therbligs
Cheaper by the Dozen
Henry L. GanttEngineer; worked with Taylor
Gantt Chart
Operations -- Prof. Juran
The GilbrethsThe Gilbreths• Frank and Lillian Gilbreth refined Taylor’s
methods.– Made many improvements to time and motion
studies.• Time and motion studies:
– 1. Break down each action into components.– 2. Find better ways to perform it.– 3. Reorganize each action to be more efficient.
• Gilbreths also studied fatigue problems, lighting, heating and other worker issues.
Operations -- Prof. Juran
Organizational Science
Elton Mayo(1880 - 1949)
Operations -- Prof. Juran
Operations Research
Patrick Blackett(1897 - 1974)
Operations -- Prof. Juran
JIT and TQM
Taiichi Ohno1912 - 1990
Kaoru Ishikawa1915 - 1989
Genichi Taguchi1924 - 2012
Operations -- Prof. Juran
JIT and TQM
Walter Shewhart1891 - 1967
W. Edwards Deming
1900 - 1993
Joseph M. Juran1904 - 2008
Operations -- Prof. Juran
Current Issues in OM• Coordinating relationships between mutually
supportive but separate organizations• Optimizing global supplier, production, and
distribution networks• Managing customer touch points• Raising awareness of competitive advantage
– Amazon, Apple, Taco Bell, Southwest Airlines• Operational risk• Sustainability and “triple bottom line”
– Economics, employees, environment
Operations -- Prof. Juran
What is Productivity?
Productivity is a common measure on how well resources are being used. In the broadest sense, it can be defined as the following ratio:
Outputs Inputs
Operations -- Prof. Juran
Total Measure Productivity
Total Measure Productivity = Outputs
Inputs
or
= Goods and services produced
All resources used
Operations -- Prof. Juran
Partial Measure Productivity
Output or Output or Output or Output Labor Capital Materials
Energy
Operations -- Prof. Juran
Multifactor Measure Productivity
Output . Labor + Capital +
Energy
or
Output . Labor + Capital +
Materials