Operations ManagementUpdated
Operations ManagementUpdated
is the management of the direct resources required to produce the goods and services provided by an organization. Management activities performed include selecting, designing, operating, controlling and updating productive systems
Types of Decisions
1. Strategic or long-range decisions
2. Tactical or medium- range decisions
Questions Raised
At Strategic Level: 1. How well we make the product? 2. Where do we locate facilities? 3. How much capacity is needed? and 4. When should capacity be added?
At Tactical Level: 1. How many workers do we need? 2. When do we need them? 3. Is overtime needed or perhaps an additional shift? 4. When to deliver material? and 5. Is a finished goods inventory needed?
At Operational Level: 1. Jobs to be done today or this week? 2. To whom tasks are assigned? and 3. Which jobs have priority?
Corporate Strategy
Marketing strategy
Operations strategy
Finance strategy
Outputs
Goods & Services
Types of Transformation
Physical, as in manufacturing Locational, as in transportation Exchange, as in retailing Storage, as in warehousing Physiological, as in healthcare Informational, as in telecommunications.
OM Contributions to Society 1. Higher Standard of Living 2. Better Quality Goods & Services 3. Concern for the Environment 4. Improved working conditions
Value chain
Trend toward having the transformation process work more closely with suppliers and customers alike is often referred to as a products value chain. Definition : All steps that actually add value to the product without distinguishing where they are added. This concept attempts to eliminate all nonvalue added steps(steps such as inspections and inventory), and results in a higher degree of dependence among the value added functions that are linked to the chain.
Societal Development
Few Workers
Many Workers
Labor-Intensive
Capital-Intensive
Line and staff jobs in operational Management Service Industries Organizational level Manufacturing industries
Upper Vice president of manufacturing Regional manager of manufacturing Middle Plant manager Program Manager Vice-president of Operations(airline) Chief administrator (hospital) Store Manager(dept store) Facilities Manager (wholesale distributor) Department supervisor Lower Foreman Branch Manager (bank) Department supervisor (insurance company) Assistant Manager Systems and procedures analyst Purchasing agent Inspector Dietician (hospital) Customer service manager
Crew chief
Production controller Materials Manager Quality Manager Purchasing agent Work methods analyst Process Engineer
Models
A model is an approximate representation of reality. Two Types of Models: 1. Physical Models : a) Iconic --- looks like the real system b) Analog --- acts like the real system.
2. Symbolic Models: a) Verbal --- using language to model thought, b) Mathematical --- using Math. to model reality
Mathematical Models
Math Models differ in four respects :
1 ) Purpose ----------------a) descriptive, b) optimization. 2 ) Mode -------------------a) analytic, b) numeric. 3 ) Randomness ---------- a) deterministic, b) probabilistic. 4 ) Generality ------------- a) applicable to one system. b) transferable to other systems.
Chapter 2
Operations Strategy & Competition
Competitiveness refers to the firms position in the marketplace. Operations Strategy refers to how the operations management function contributes to the firms ability to achieve its competitive advantage in the marketplace. Operations Strategies are developed from the competitive priorities of an organization which include: 1. Low cost, 2. High quality, 3. Fast delivery, 4. Flexibility, and 5. Service.
Operations Strategy is thus concerned with a long-term plan in order to determine how to best utilize the major resources of the firm so that there is a high degree of compatibility between these resources and the firms long -term corporate strategy.
Planning Issues
Major long term issues include: 1. How big do we make the facilities? Plant size 2. Where do we locate them? location 3. What type of processes or technologies do we install to make the products? Process Tactical issues include: 1. Workforce size, 2. Material requirement.
Administrative process
Strategic Level
Tactical or Translators Level Operational Level
Feed Back
Slack Or
Information
c o m p e t i t i v e priority
1950s
1960s
1970s
1980s
value max.
1990s
info. based
2.
3. Breakthrough or Radical Products: these products require substantial product design and process change, e.g. first TV, cellular phone, etc.
Delivery Approaches 1. The Production Line Approach 2. The Customer Involvement Approach
Supplement
PROJECT MANAGEMENT
A project is a statement or proposal of something to be done. Projects have a series of related jobs directed towards the achievement of a goal and requiring a significant amount of time to perform.
Project management involves planning, directing and controlling resources: people, capital, equipment, and material to meet the technical, cost, and time constraints of the project.
Organizational Considerations in Project Management Role of the project manager: multidisciplinary, wide
variety of skills, collaborative culture, social, and technical skills. High Performance project teams: the necessary factors for the creation of a successful project team are: 1. Peoplerelated factorsgood communications, involvement, resolve conflict, mutual trust and commitment to project objectives, 2. Leadership factorsability to organize, direct, facilitate group decision making, and resolve problems, 3. Task related factorsability to produce results within budget and on time, ability to innovate and to change, 4. Organizational factors climate, authority structure, policies, procedures, regulations, values and economic conditions.
ACTIVITIES OF OM
The overall manufacturing system. Production engineering. Computerized design, process planning, production planning and control and prove the efficiency and effectiveness of production engineering and manufacturing methods which in many high-technology and large-scale mass-production or processing plants have largely replaced traditional and mainly manual techniques. Manufacturing. Quality management. Planned maintenance. Inventory control. Distribution.
PRODUCTION ENGINEERING
Production engineering is the generic term which covers all activities concerned with specifying, planning and controlling manufacturing processes. The main production engineering activities are:
Process planning
Process planning determines how the product or part should be manufactured by referring to component and assembly drawings and manufacturing reference data, and specifications produced at the design stage.
Production planning.
Production planning analyses sales forecasts and orders and decides on the manufacturing resources (capacity, materials and labor) required to meet the current and anticipated demand. Production planning involves capacity and aggregate planning, which aim to match the level of production to the level of demand.
Aggregate planning
Aggregate planning aims to ensure that capacity is available to meet demand at minimum cost.
Production control
Production control schedules production, loads the shops and monitors progress to ensure that production programs are achieved.
Scheduling
Scheduling involves: Sequencing determining the order in which jobs will be completed at each stage in the program; Allocating the start and finishing time for each order; Resource allocation assessing labour and material requirements and their availability.
Scheduling
The approach adopted will be influences by the extend to which the company is making to order (responding to customer orders) or making to stock (anticipating future orders).
Scheduling techniques
Material requirements planning, in which the known customer requirement for the final product is exploded to produce lists of parts and components required to make it. These known requirements are compared with available inventories to determine net requirements, which are then scheduled within available capacity.
Forward scheduling, which involves setting out activity timings from a given start date to achieve a defined completion date. This is usually computerized, although bar or Gantt charts are still maintained manually in some organizations.
Scheduling techniques
Reverse scheduling, as used in make-to-order situations, involves subtracting activity timings from the due date for delivery and representing them on computerized schedules or Gantt charts. Network analysis, which is used in complex projects to schedule various interrelated and interdependent activities
Line of balance, a technique used in batch production to calculate the quantities of the parts or components of the final product which must be completed by an intermediate date to ensure the final delivery schedule is met.
Scheduling
The output of the scheduling process is a master production schedule which sets out when the major operations required for each expected item of demand are to be undertaken. Master production scheduling aims to balance production possibilities with sales requirements.
Shop loading.
Shop loading takes the master schedule and verifies labor availability, prepares detailed programs and assigns the work to a machine or an operator. Shop loading will be related to the capacity available.
Progress control.
Progress control monitors the progress of orders through the shops against the master production schedule and delivery requirements so that corrective action can be taken to overcome delays, shortages and bottlenecks.
Material control.
Material control works from the master production schedule and, using materials requirements (MRP) and inventory control techniques, it: Verifies material requirements Requisition materials from buying and stores; Receives and stores materials and bought in parts; Identifies surplus stock and takes action to reduce it.
MANUFACTURING SYSTEMS.
job, batch and flow production systems the use of computer numerically controlled machine tools flexible manufacturing systems (FMS) the use of group technology cellular manufacturing the use of robots computer-integrated manufacturing
QUALITY MANAGEMENT
Quality management activities aim to ensure that the high standards of product quality and service expected by customers are created and maintained. Quality management activities comprise: quality control, quality assurance and total quality control systems total quality management (TQM) systems
DISTRIBUTION ACTIVITIES
Distribution activities are concerned with storing completed products in warehouses, depots and stores and the dispatching and delivery of products to customers. Those concerned with physical distribution management and distribution planning.
Manufacturing Systems
Manufacturing is the process of transforming materials and information into goods for the satisfaction of human needs.
MANUFACTURING AS A PROCESS
Manufacturing can be subdivided into: manufacturing processes, which alter the form, shape and/or physical properties of a given material; manufacturing equipment, which is used to perform manufacturing processes; manufacturing systems, which are combinations of manufacturing equipment and humans bound by a common material and information flow; design and manufacturing interfaces, which are the links between the drawing, sketch, computer-assisted design (CAD) file or other ways of communicating the features and characteristics of the product or subassembly to be manufactured.
MANUFACTURING DECISIONS
Manufacturing decisions are concerned with the following four attributes: 1. Cost 2. Time 3. Flexibility 4. Quality
Cost
Equipment Materials Labour Energy Maintenance Training Overhead and capital
Time
The speed with which a manufacturing system can respond to change and how quickly a product can be produced by the system (the production rate).
Flexibility
The ability to meet the demands of a diversified and changing customer base in a global market. Flexibility is required in the following areas.
Flexibility
Machine flexibility. The ease of making changes required to produce a given set of part types. Process flexibility. The ability to produce a given set of part types, possibly using different materials in different ways. Product flexibility. The ability to change over to produce new products economically and quickly. Routing flexibility. The ability to handle breakdowns and to continue producing a given set of part types.
Flexibility
Volume flexibility. The ability to operate profitably at different production volumes. Expansion flexibility. The ability to expand the system easily and in a modular fashion. Operation flexibility. The ability to interchange ordering of several operations for each part type. Production flexibility. The universe of part types the manufacturing system can produce.
Quality
How well the production process meets the design specifications related to the different features and properties of the product.
PPCS ACTIVITIES
process planning demand forecasting aggregate planning, which includes capacity planning master production scheduling scheduling monitoring and control.
Demand forecasting
Demand forecasting leads to the planning of demand for a particular product. The planning is done in terms of specific modes, styles and sizes of the product range. A variety of forecasting methods are used and the result is input into the medium-term planning stage known as aggregate planning.
Aggregate planning
Aggregate planning Is therefore largely concerned with capacity planning deciding the capacity required in the system and developing and implementing a strategy for the use of given resources to meet demand fluctuations
Scheduling
The detailed scheduling of work and the allocation of labour and material requirements is carried out by one or other of the following computer-based techniques: Material requirement planning Manufacturing resource planning Optimized production technology Just-in-time (JIT)
BENEFITS
better planning of shop and purchase orders resulting in on-time deliveries, reduced manufacturing lead times and fewer shortages; improved control of shop orders resulting in shorter queues, reduced work-in-progress, less idle time and fewer bottlenecks; and monitoring and control of machine tools and production processes resulting in better utilization, improved quality and reduced costs.
Productivity
Definition: It is the efficient use of resources: labor, capital, land, materials, energy, information, etc. in the production of goods and services.
It can also be defined as the relationship between results and the time it takes to accomplish them.
3. Confusion about productivity and profitability, 4. The belief that cost-cutting always improves productivity,
5. That it can only be applied to production.
3.
Total measure
Output All inputs
Capacity
Capacity: is the output capability of a process in a specified period of time. Design Capacity is the output the plant is designed to achieve and Actual Capacity or Output is the actual amount the plant is producing. Capacity Utilization: is the percent capacity used: Actual Output Design Capacity
COMPUTERIZED DESIGN, PROCESS PLANNING, PRODUCTION PLANNING AND CONTROL, AND MANUFACTURING SYSTEMS.
Computer-aided design (CAD) Computer-aided design (CAD), uses computers to assist in the production of designs, drawings and data for use in manufacture. Computer-aided manufacture (CAM) Computer-aided manufacture uses computers to support manufacturing processes, especially those consisting of computer numerically controlled (CNC) machines, robots and automated material handling systems.
CADCAM
CADCAM, also known as computer-aided engineering (CAE), links product design and manufacturing through integrated CAD and CAM computer systems. For example, a CADCAM system in the electronic industry, where it is most often found, might consist of CAD work stations, in which integrated circuits and printed circuit boards are designed, which are linked to a processor with a database that provides output to drive computer numerically controlled (CNC) machines.
CIM
Computer-integrated manufacture (CIM), uses information technology to integrate the various processes which together comprise the total manufacturing process. The computerized systems used in a full CIM system will include CAD and CAM as described previously. A CADCAM system is sometimes regarded as being synonymous with CIM. A full CIM system, however, will also incorporate computer-aided process planning (CAPP) and computerized production planning and control (CPPC).
CAPP
Computer-aided process planning (CAPP) uses computers to produce process plans for production or parts. It can automatically develop these and routings from the outputs of CAD. It leans heavily on the parts classification and coding aspects of grouping technology (GT).
CAPP
There are two approaches to CAPP: Variant process planning, in which process plans are stored in digital form thus allowing the planner to select and modify appropriate plans as needed Generative process planning, in which descriptions of the parts, the manufacturing process, the machine tools and the tooling are entered into the computing system which then develops a new process plan. It makes no reference to prior plans and therefore requires more complex decision sequences than variant process planning.
CPPC
The overall production planning and control system (PPCS). A choice of planning and scheduling systems:
Material requirements planning (MRPI) Manufacturing resource planning (MRPII) Optimized production technology (OPT) Just-in-time systems (JIT)
CPPC
Process control systems. Layout planning which determines the physical disposition of departments and selection on a site and location plant, machinery and equipment in each area. Much of the work of planning layouts can be computerized although techniques such as cross charts and relationship charts are also used manually.
AIMS
determine for final products what should be produced at what time; calculate the required production of sub-assemblies; determine the requirement for materials based on an up-todate bill of materials (BOM); calculate inventories, work-in-progress, batch sizes and manufacturing and packaging lead times; and generally control inventory by ordering bought-in components and raw materials in relation to the orders received or forecast rather than the more usual practice of ordering from stock-level indicators.
BENEFITS
The benefits of MRPI are that a detailed forecast of the inventory position is produced period by period which, together with the planned order release entries, enables future production to be planned more accurately and better control to be maintained of inventory.
MRP II
BENEFITS
MRPII is a demand-driven system which integrates planning and control systems. It takes account of capacity requirements and constraints and enables decisions to be made at each stage of the manufacturing process in a coordinated fashion. MRPII also provides a systems capability which can simulate future possibilities by processing multiple sets of data to model alternative manufacturing environments.
ERP
Enterprise Resource Planning Systems : fully integrated software system that links all of the major functional areas in the organization. ERP systems are an outgrowth of Material Requirements Planning (MRP) systems. Benefits of ERP Systems : Provide competitive advantage the benefits can take many forms: 1. Reduction of number of errors because a common database is used, 2. Faster customer response times, and 3. Better overall communications within the organization. Failure of ERP systems is due to: lack of top management commitment, lack of adequate resource, lack of proper training, and lack of communication.
Benchmarking
Defined: is the continuous process of measuring the desired features of products and services, and practices against world class standards or reputable companies considered as tops in that industry. Goods & Services, Business Processes, and Performance Measures can be benchmarked.
4. Action
5. maturity
Types of Benchmarking
1. Internal
2. Competitive 3. Functional 4. Generic
Reengineering
It is the process of rethinking and restructuring an organization.
Characteristics of a Reengineered Process: