Unit1Sec2_ProductionSystemIssues

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Slide 0

Section 2Section 2Section 2Section 2

Production System IssuesProduction System Issues



Slide 2

The Operations FunctionThe Operations Function

Core of the OrganizationCore of the Organization

Other Functional AreasOther Functional Areas

Marketing (demand)Marketing (demand)

Finance (money)Finance (money) Engineering (design)Engineering (design)

Human Resources (men)Human Resources (men)

Other? ===> supportOther? ===> support



Slide 3


Differs Based upon Industry/OrganizationDiffers Based upon Industry/Organization High volume retailing (e.g., WalMart)High volume retailing (e.g., WalMart)

Housing constructionHousing construction

Law firmsLaw firms

Accounting firms Accounting firms UniversitiesUniversities

OthersOthers

Similarities ===> Principles of OMSimilarities ===> Principles of OM



Slide 4


Operation = Transformation ProcessOperation = Transformation Process Process inputsProcess inputs

ManagementManagement

MethodsMethods MaterialsMaterials MachinesMachines MaintenanceMaintenance PersonnelPersonnel

Also: information & energy Also: information & energy Transformation (macro/micro views)Transformation (macro/micro views)

Outputs (components / finished goods / services)Outputs (components / finished goods / services)



Slide 5


MeasurementsMeasurements Characteristics of outputsCharacteristics of outputs

Relation of outputs to inputs (Relation of outputs to inputs ( productivity productivity ))

Improving OperationsImproving Operations

MethodsMethods

TechnologyTechnology

QualityQuality

Management Management (not necessarily workers)(not necessarily workers) CapitalCapital



Slide 6

Physical:Physical: as in manufacturing operationsas in manufacturing operations

Locati onal:Locati onal: as in transportation operationsas in transportation operations

Ex change:Ex change: as in retail operationsas in retail operations

Physi ol og ical:Physi ol og ical: as in health careas in health care

Psychol og ical:Psychol og ical: as in entertainmentas in entertainment

I nformati onal:I nformati onal: as in communicationas in communication

Transformation ProcessTransformation ProcessTransformation ProcessTransformation Process



Slide 7

Production SystemsProduction Systems CharacteristicsCharacteristics

a) System discriminationa) System discrimination

b) Interrelationship among systemsb) Interrelationship among systems

c) Stratum formulationsc) Stratum formulationsd) Specialisation of functionsd) Specialisation of functions

e) Increase of entropye) Increase of entropy

f) Isofinalityf) Isofinality



Slide 8

Systems PerspectiveSystems Perspective

InputsInputs

Transformation SystemTransformation System

Alter Alter TransportTransport

StoreStore

InspectInspect

OutputsOutputs

EnvironmentEnvironment



Slide 9

InputsInputsInputsInputs

Inputs include facilities, labour, capital,Inputs include facilities, labour, capital,

equipment, raw materials, and supplies.equipment, raw materials, and supplies.

A less obvious input is knowledge of how to A less obvious input is knowledge of how to

transform the inputs into outputs.transform the inputs into outputs.



Slide 10

Transformation SystemTransformation SystemTransformation SystemTransformation System

The part of the system that adds value to theThe part of the system that adds value to the

inputs.inputs.

Four major waysFour major ways

Alter Alter ± ± physical changephysical change TransportTransport -- relocaterelocate

StoreStore -- protectprotect

InspectInspect ± ± better understandingbetter understanding



Slide 11

OutputsOutputsOutputsOutputs

Two types of outputs commonly result from aTwo types of outputs commonly result from a

production systemproduction system

Services (physical goods)Services (physical goods)

Products (abstract or nonphysical)Products (abstract or nonphysical)



Slide 13

Scientific managementScientific management

systematic analysis of work methodssystematic analysis of work methods

Mass productionMass production

highhigh--volume production of a standardizedvolume production of a standardizedproduct for a mass marketproduct for a mass market

Lean productionLean production

adaptation of mass production that prizesadaptation of mass production that prizes

quality and flexibilityquality and flexibility

Evolution of Operations ManagementEvolution of Operations Management (cont.)(cont.)Evolution of Operations ManagementEvolution of Operations Management (cont.)(cont.)



Slide 14

The Shingo System: Fail-Safe DesignThe Shingo System: Fail-Safe Design

Shingo¶s argument:Shingo¶s argument:

SQC methods do not prevent defectsSQC methods do not prevent defects

Defects arise when people make errorsDefects arise when people make errors

Defects can be prevented by providingDefects can be prevented by providingworkers with feedback on errorsworkers with feedback on errors

PokaPoka--Yoke includes:Yoke includes:

ChecklistsChecklists Special tooling that prevents workers fromSpecial tooling that prevents workers from

making errorsmaking errors



Slide 15

Kaizen, Poka YokeKaizen, Poka YokeKaizen, Poka YokeKaizen, Poka Yoke

Kaizen translates into continuous improvement.Kaizen translates into continuous improvement.

Goal of poka yoke is to mistakeGoal of poka yoke is to mistake--proof workproof work

activities in a way that prevents errors fromactivities in a way that prevents errors from

being committed in the first place.being committed in the first place.



Slide 16

FailFail--SafingSafing

AK A AK A Id i ot Id i ot--P roof i ng P roof i ng Protects against human variabilityProtects against human variability

Also can lead to Also can lead to dumbi ng dumbi ng --d ownd own of workforceof workforce

Goal is to Prevent:Goal is to Prevent:

Leaving out parts/stepsLeaving out parts/steps Passing errors alongPassing errors along

Etc.Etc.

ExamplesExamples

Spreadsheet templates (withSpreadsheet templates (with l ock ed l ock ed formulaformulacells)cells)

JigsJigs

Etc.Etc.



Slide 17

Service FailService Fail--safingsafing

P ok aP ok a- -Y ok es (A P roactiv e A pproach)Y ok es (A P roactiv e A pproach)

Keeping a mistakeKeeping a mistake

from becoming afrom becoming a

service defectservice defect

How can we failHow can we fail--safesafe

the three Ts?the three Ts?

Task

TangiblesTreatment

Unit1Sec2_ProductionSystemIssues

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