[PPT]PowerPoint Presentation - Hong Kong Management · Web view1 Introduction to Operations...
Transcript of [PPT]PowerPoint Presentation - Hong Kong Management · Web view1 Introduction to Operations...
Learning Objectives
Define the term operations managementIdentify the three major functional areas of organizations and describe how they interrelateCompare and contrast service and manufacturing operationsDescribe the operations function and the nature of the operations managers job
Learning Objectives
Differentiate between design and operation of production systemsDescribe the key aspects of operations management decision makingBriefly describe the historicalevolution of operations managementIdentify current trends that impact operations management
Operations Management
Operations Management is:
The management of systems or processes that create goods and/or provide services
Operations Management affects:Companies ability to competeNations ability to compete internationally
The Organization
The Three Basic Functions
Figure 1.1
Value-Added Process
The operations function involves the conversion of inputs into outputs
Figure 1.2
Value-Added & Product Packages
Value-added is the difference between the cost of inputs and the value or price of outputs.Product packages are a combination of goods and services.Product packages can make a company more competitive.
Automobile assembly, steel making
Home remodeling, retail sales
Automobile Repair, fast food
Goods-service Continuum
Figure 1.3
Computer repair, restaurant meal
Song writing, software development
Goods
Service
Surgery, teaching
Food Processor
Inputs
Processing
Outputs
Table 1.2
Hospital Process
Inputs
Processing
Outputs
Table 1.2
Manufacturing or Service?
Production of Goods vs. Delivery of Services
Production of goods tangible outputDelivery of services an actService job categoriesGovernmentWholesale/retailFinancial servicesHealthcarePersonal servicesBusiness servicesEducation
Key Differences
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
Key Differences
6. Production and delivery
7. Quality assurance
8. Amount of inventory
9. Evaluation of work
10. Ability to patent design
Goods vs Service
CharacteristicGoodsServiceCustomer contactLowHighUniformity of inputHighLowLabor contentLowHighUniformity of outputHighLowOutputTangibleIntangibleMeasurement of productivityEasyDifficultOpportunity to correct problemsHighLowInventoryMuchLittleEvaluationEasierDifficultPatentableUsuallyNot usual
Operations Management includes:ForecastingCapacity planningSchedulingManaging inventoriesAssuring qualityMotivating employeesDeciding where to locate facilitiesSupply chain managementAnd more . . .
Scope of Operations Management
Types of Operations
Table 1.4
Figure 1.4
Chart1
7921
7228
7228
6832
6436
6436
5842
4446
4357
3565
3268
3070
Mfg.
Service
Year
Percent
U.S. Manufacturing vs. Service Employment
Sheet1
YearMfg.Service
457921
507228
557228
606832
656436
706436
755842
804446
854357
903565
952575
003070
022575
052080
Sheet1
Mfg.
Service
Year
Percent
U.S. Manufacturing vs. Service Employment
Sheet2
Sheet3
Decline in Manufacturing Jobs
ProductivityIncreasing productivity allows companies to maintain or increase their output using fewer workersOutsourcingSome manufacturing work has been outsourced to more productive companies
Why Manufacturing Matters
Over 18 million workers in manufacturing jobsAccounts for over 70% of value of U.S. exportsAverage full-time compensation about 20% higher than average of all workersManufacturing workers more likely to have benefitsProductivity growth in manufacturing in the last 5 years is more than double U.S. economy
Why Manufacturing Matters
More than half of the total R&D performed is in the manufacturing industriesManufacturing workers in California earn an average of about $25,000 more a year than service workersWhen a California manufacturing job is lost, an average of 2.5 service jobs are lost
Challenges of Managing Services
Service jobs are often less structured than manufacturing jobsCustomer contact is higherWorker skill levels are lowerServices hire many low-skill, entry-level workersEmployee turnover is higherInput variability is higherService performance can be affected by workers personal factors
Operations Management Decision Making
ModelsQuantitative approachesAnalysis of trade-offsSystems approachEstablishing prioritiesEthics
Key Decisions of Operations Managers
What
What resources/what amounts
When
Needed/scheduled/ordered
Where
Work to be done
How
Designed
Who
To do the work
Decision Making
Decision Making
Decision Making
ModelsQuantitative approachesAnalysis of trade-offsSystems approach
Models
A model is an abstraction of reality.
What are the pros and cons of models?
Tradeoffs
Models Are Beneficial
Easy to use, less expensiveRequire users to organizeIncrease understanding of the problemEnable what if questionsConsistent tool for evaluation and standardized formatPower of mathematics
Limitations of Models
Quantitative information may be emphasized over qualitativeModels may be incorrectly applied and results misinterpretedNonqualified users may not comprehend the rules on how to use the modelUse of models does not guarantee good decisions
Quantitative Approaches
Linear programmingQueuing TechniquesInventory modelsProject modelsStatistical models
Analysis of Trade-Offs
Decision on the amount of inventory to stock Increased cost of holding inventory
Vs.
Level of customer service
Systems Approach
The whole is greater than the sum of the parts.
Pareto Phenomenon
A few factors account for a high percentage of the occurrence of some event(s). 80/20 Rule - 80% of problems are caused by 20% of the activities.
How do we identify the vital few?
Ethical Issues
Financial statementsWorker safetyProduct safetyQualityEnvironmentCommunityHiring/firing workersClosing facilitiesWorkers rights
Business Operations Overlap
Operations
Finance
Figure 1.5
Marketing
Operations Interfaces
Historical Evolution of Operations Management
Industrial revolution (1770s)Scientific management (1911)Mass productionInterchangeable partsDivision of laborHuman relations movement (1920-60)Decision models (1915, 1960-70s)Influence of Japanese manufacturers
Table 1.7
Trends in Business
Major trendsThe Internet, e-commerce, e-businessManagement technologyGlobalizationManagement of supply chainsOutsourcingAgilityEthical behavior
Management Technology
Technology: The application of scientific discoveries to the development and improvement of goods and servicesProduct and service technologyProcess technologyInformation technology
Simple Product Supply Chain
Figure 1.7
Supply Chain: A sequence of activities
And organizations involved in producing
And delivering a good or service
A Supply Chain for Bread
Stage of ProductionValue AddedValue of ProductFarmer produces and harvests wheat$0.15$0.15Wheat transported to mill$0.08$0.23Mill produces flour$0.15$0.38Flour transported to baker$0.08$0.46Baker produces bread$0.54$1.00Bread transported to grocery store$0.08$1.08Grocery store displays and sells bread$0.21$1.29Total Value-Added$1.29
Other Important Trends
Ethical behaviorOperations strategyWorking with fewer resourcesRevenue managementProcess analysis and improvementIncreased regulation and product liabilityLean production
U.S. Manufacturing vs. Service Employment
0
20
40
60
80
100
455055606570758085909500
Year
Percent
YearMfg.Service
457921
507228
557228
606832
656436
706436
755842
804446
854357
903565
953268
003070
YearMfg.Service
457921
507228
557228
606832
656436
706436
755842
804446
854357
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022575
U.S. Manufacturing vs. Service Employment
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4550556065707580859095000205
Year
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YearMfg.Service
457921
507228
557228
606832
656436
706436
755842
804446
854357
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952575
003070
022575
U.S. Manufacturing vs. Service Employment
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4550556065707580859095000205
Year
Percent
Mfg.
Service