Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2...

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Page 1: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

Introduction to Operations

Page 2: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

© The McGraw-Hill Companies, Inc., 2004

Operations -- Prof. Juran 2

• Intro to Operations Management• Administrative Issues• Basic Definitions• Historical Development of OM• Scientific Management• Current Issues in OM• Operations Strategy• Measures of Productivity

Outline

Page 3: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

© The McGraw-Hill Companies, Inc., 2004

Operations -- Prof. Juran 3

• Web site– Mission– Description– Syllabus (note special dates)– Downloads

• Textbook• TA

About the Class

Page 4: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

© The McGraw-Hill Companies, Inc., 2004

Operations -- Prof. Juran 4

What is Operations Management?

The design, control, and improvement of the systems that create and deliver the firm’s primary products and services

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Operations -- Prof. Juran 5

What is a Production System?

A user of resources to transform inputs into some desired outputs

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Important Measures of Performance

Efficiency: Using a minimum of resources

Effectiveness: Creating value for some customer

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Transformations

Physical (Manufacturing) Locational (Transportation) Exchange (Retailing) Storage (Warehousing) Physiological (Health Care) Informational (Telecommunications)

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Manufacturing vs. Services

What differentiates manufacturing operations from service operations?

J&C proposition: All businesses are services

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Historical Development of OM

• Craft System• Industrial Revolution• Scientific Management• Organizational Science• Operations Research• JIT and TQM• Supply Chain Management• Internet Commerce

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Craft System

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Industrial Revolution

Eli Whitney(1765 – 1825)

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Scientific Management

Frederick W. Taylor(1856 – 1915)

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Industrial Revolution

Henry Ford(1863 – 1947)

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Organizational Science

Elton Mayo(1880 - 1949)

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Operations Research

Patrick Blackett(1897 - 1974)

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JIT and TQM

Taiichi Ohno(1912 – 1990)

Kaoru Ishikawa(1915 – 1989)

Genichi Taguchi(1924 – 2012)

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Operations -- Prof. Juran 17

JIT and TQM

Walter Shewhart(1891 – 1967)

W. Edwards Deming

(1900 – 1993)

Joseph M. Juran(1904 – 2008)

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Operations -- Prof. Juran 18

Current Issues in OM

• Effectively consolidating the operations resulting from mergers

• Developing flexible supply chains to enable mass customization of products and services

• Managing global supplier, production and distribution networks

• Increased “commoditization” of suppliers

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Current Issues in OM (cont’d)

• Achieving the “Service Factory”• Enhancing value added services• Making efficient use of Internet

technology• Achieving good service from service

firms• Operational risk• Reduced environmental impact• Reduced energy consumption

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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.

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Operations -- Prof. Juran 21

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?

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Operations -- Prof. Juran 22

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

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Operations -- Prof. Juran 23

Dealing with Trade-offs

• Cost vs. Quality• Flexibility vs. Speed• Etc.

Page 24: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

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Operations -- Prof. Juran 24

Strategic Frameworks

Kaplan and Norton:• Financial• Customer• Internal• Learning and Growth

Page 25: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

© The McGraw-Hill Companies, Inc., 2004

Operations -- Prof. Juran 25

Strategic Frameworks

Michael Porter:• Rivalry• Threat of Substitutes• Buyer Power• Supplier Power• Barriers to Entry / Threat of Entry

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Operations -- Prof. Juran 26

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

Page 27: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

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Operations -- Prof. Juran 27

Total Measure Productivity

Total Measure Productivity = Outputs

Inputs

or

= Goods and services produced

All resources used

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Operations -- Prof. Juran 28

Partial Measure Productivity

Output or Output or Output or Output Labor Capital Materials

Energy

Page 29: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

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Operations -- Prof. Juran 29

Multifactor Measure Productivity

Output . Labor + Capital +

Energy

or

Output . Labor + Capital +

Materials

Page 30: Introduction to Operations. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Intro to Operations Management Administrative Issues Basic.

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Operations -- Prof. Juran 30

• Intro to Operations Management• Administrative Issues• Basic Definitions• Historical Development of OM• Current Issues in OM• Operations Strategy• Measures of Productivity• Scientific Management

Summary


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Session 8a. Decision Models -- Prof. Juran2 Overview Operations Simulation Models Reliability Analysis –RANK, VLOOKUP, MIN Inventory Order Quantities.

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