MANAGEMENT: A GLOBAL AND ENTREPRENEURIAL PERSPECTIVE by Weihrich, Cannice, and Koontz

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Productivity, Operations Management, and Total Quality Management
2008 Weihrich and Cannice

Chapter

Chapter 20. Productivity, Operations Management, and Total Quality Management

After studying this chapter, you should understand: 1. The nature of productivity issues and ways to improve effectiveness and efficiency. 2. Production and operations management as an applied case of managerial planning and control. 3. The operations management system. 4. The tools and techniques for improving productivity. 5. The importance of quality, the nature of a variety of techniques for improving quality, and lean manufacturing. 6. The difference between supply chain management and value chain management.
2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

What is Productivity?

Productivity is the output-input ratio within a time period with due consideration for quality.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

Production and Operations Management: Manufacturing and Service

Production management deals with those activities necessary to manufacture products. Operations management deals with activities necessary to produce and deliver a service as well as a physical product.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

Fig. 20-1 Operations Management System

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

Steps in Product and Production Design - an Illustration

1. 2. 3. 4. 5. 6. 7. Create product ideas by examining consumer needs and screening the various alternatives. Select the product on the basis of various considerations, including data from market and economic analyses, and make a general feasibility study. Prepare a preliminary design by evaluating various alternatives, taking into consideration reliability, quality, and maintenance requirements. Reach a final decision by developing, testing, and simulating the processes to see if they work. Decide whether the enterprise's current facilities are adequate or if new or modified facilities are required. Select the process for producing the product, and consider the technology and the methods available. After the product is designed, prepare the layout of the facilities to be used, plan the system of production, and schedule the various tasks that must be done.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

Tools and Techniques for Improving Productivity

Inventory planning and control Just-in-time inventory system

The supplier delivers the components and parts to the production line only when needed and just in time to be assembled.

Outsourcing
Production and operations are contracted to outside vendors that have expertise in specific areas.
2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

Fig. 20-2 Inventory Control Model

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

What is Operations Research?

Operations research is the application of scientific methods to the study of alternatives in a problem situation, with a view to obtaining a quantitative basis for arriving at a best solution.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

What is Value Engineering?

Value engineering is the process of analyzing the operations of the product or service, estimating the value of each operation, and attempting to improve that operation by trying to keep costs low at each step or part.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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What is Work Simplification?

Work simplification is the process of obtaining the participation of workers in simplifying their work.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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What is a Quality Circle?

A quality circle is a group of people from the same organizational area who meet regularly to solve problems they experience at work.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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Total Quality Management

Total quality management is the organization's long-term commitment to the continuous improvement of quality, throughout the organization and with the active participation of all members at all levels, to meet and exceed customer expectations.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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Mass Production versus Lean Production Managerial Practices

MASS PRODUCTION LEAN PRODUCTION

Sporadic and inconsistent improvements Satisfied with good enough High inventory acceptable Me management with emphasis on individual performance Workers considered the cause of poor quality

Continuous improvements (kaizen) with strategic breakthroughs Aiming at zero defects Just-in-time inventory system We, or, team management Responsibility for problems rest on everyone, especially management

2008 Weihrich and Cannice

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Computer-aided Techniques

CAD/CAM help engineers design products much more quickly than they could with the traditional paper-andpencil approach.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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Supply Chain Management

Supply chain management focuses on the sequence of getting raw materials and subassemblies through the manufacturing process in an economical manner.

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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Porters Value Chain Process Model

The value chain process model includes the primary activities of inbound logistics, operations, outbound logistics, marketing/sales, and service, with the process supported by the enterprise infrastructure, human resources management, technology, and procurement.
2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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KEY IDEAS AND CONCEPTS FOR REVIEW

Productivity problems and measurement Production management Operations management Quality in the information age Operations management system Steps in product and production design Production layouts Inventory planning and control Just-in-time inventory system Outsourcing Operations research Value engineering Work simplification Quality circle Total quality management Lean manufacturing Computer-aided design Computer-aided manufacturing Supply chain management Value chain management Value chain process model

2008 Weihrich and Cannice

Chapter 20. Productivity, Operations Management, and Total Quality Management

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