What is OM?

Production Operation Management* Marketing

Organizing to Produce Goods and Services

Production/Operations Finance/accounting

one of three major functions of org.

Why study OM?

know how g&s are produced the most costly & profitable part of an org. understand what operation managers do planning staffing

What Operation Managers do

management process

leading organizing controlling

10 critical decisions of OMs Eli Whitney (1800)'s theory

The heritage of OM.

F. W. Taylor (1881)'s theory Henry Ford & Charles Sorensen

C1. Operations & Productivity

Services, Service sector & Pure service

Operations in the Service sector

Differences between G&S* Growth of Services Service Pay

Global focus Just-in-time performance Supply chain partnering Rapid product development

New trends in OM

Mass customization Empowered employees Environmentally sensitive production Ethics production vs. productivity* single-factor productivity* Productivity measurement Multi-factor productivity* Measurement problems

The productivity challenge

Labor Productivity Variables* Capital Management Productivity and the Service Sector

Ethics and Social responsibility

C1. Operations & Productivity.mmap - 3/17/2014 - Mindjet

maquiladoras WTO Reduce Cost NAFTA EU

A Global View of Operations

Improve the Supply Chain Provide better G&S Understand Markets Learn to improve operations Attract and retain Global Talent Cultural and Ethical Issues Mission

Developing Missions and Strategies*

Differentiation Strategy Cost leadership Response uniqueness Competing on Differentiation experience differentiation

Achieving Competitive Advantage through Operations

Low-Cost leadership Competing on Cost flexible Competing on Response reliable quick G&S Design

C2.Operations Strategy in a Global Environment

Quality Process and capcity design Location Selection

Ten Strategic OM Decisions*

Layout Design Human resources and job design Supply chain management Inventory Scheduling Maintenance OM Strategy insights by PIMS research* Research

Issues in Operations Strategy

Issues on Product-Life Cycle Preconditions changes in the environment Dynamics SWOT Analysis Environmental Analysis Strategy development Process Determine Corporate Mission Form a Strategy Critical Success Factors and Core Competencies Build and Staff the Organization Integrate OM with Other Activities International business = Multinational corporation International Strategy Activity map

Strategy Development and Implementation

Global Operations Strategy Options

Multi-domestic Strategy Global Strategy Transnational Strategy

C2.Operations Strategy in a Global Environment.mmap - 3/17/2014 - Mindjet

Selection: What to produce

Product decision

Definition: What's the function Design: how to design Differentiation: Hardrock cafe Production Strategy Options Low-cost: Walmart, TacoBell, Jetstar, Vietjetair Rapid response: HP, Motorola, Toyota, Dell

S1:G&S Selection
Product Life Cycles* and Strategies Product-by-Value Analysis

Introduction: Growth: Maturity: Decline:

Understanding the Customer Economic change Sociological and demographic change

Generating New Products

New Product Opportunities

technological change Political/legal change market practice, professional standards, suppliers, distributors

Importance of New Products Product development system* build House of Quality* Quality Function Deployment

Product Development
Organizing for Product Development Manufacturability and Value Engineering Robust design

Product development teams Concurrent engineering

C5.Design of Goods & Services

Modular Design DFMA Computer-Aided Design (CAD) 3-D object modeling STEP

Issues for Product Design

Computer-Aided Manufacturing (CAM) Virtual Reality Technology Value Analysis

Product quality Shorter design time Production cost reductions

Ethics and Environmentally Friendly Designs Purchasing technology by Acquiring Firm

Time-Based Competition*

Joint ventures Alliances Engineering Drawing

S2. Defining a Product*

How?

Bill of Materials

Make-or-Buy Decisions Group Technology assembly drawing assembly chart route sheet work order Engineering change notices (ECNs) Product Life-Cycle Management (PLM) Customer Participation in the Design of Services* Documents for Services

Documents for Production

S3. Service Design

Application of Decision Trees to Product Design*

Transition to Production

C5.Design of Goods & Services.mmap - 3/17/2014 - Mindjet

Quality and Strategy

Company reputation Implications of Quality Product liability Global implications

Defining Quality & TQM*

Cost of Quality (COQ)

Prevention costs Appraisal costs Internal failure External costs Ethics and Quality Management ISO 9000 ISO 14000 Plan Do Continuous Improvement Check Act DMIAC Six Sigma* quality circle Employee Empowerment Determine what to benchmark

International Quality Standards*

Total Quality Management

Form a benchmark team Benchmarking* identify benchmarking partners Collect and analyze benchmarking information Take action to match or exceed the benchmark JIT cuts the cost of quality JIT improves quality Just-in-Time (JIT) less inventory and better, easier-2-employ JIT Quality Robust Taguchi Concept* Quality loss function target-oriented quality

C6.Managing Quality

Check sheets Scatter Diagrams Cause-and-Effect Diagrams Pareto Charts Flowcharts Histograms Control charts Statistical Process Control (SPC) When and Where to Inspect source control Source Inspection

7 Tools of TQM*

The Role of Inspection

Poka-yoke

Service Industry Inspection Attribute inspection Inspection of Attributes vs. Variables Variable inspection

TQM in services

service recovery

C6.Managing Quality.mmap - 3/17/2014 - Mindjet

Utilization=Actual Output/Design Capacity Process Focus Efficiency=Actual output/Effective Capacity Repetitive process Repetitive Focus Modules

Four Process Strategies*

Product Focus build-to-order Mass Customization Focus Postponement Crossover Charts* Comparison of Process Choices Focused Processes Changing Processes Flow Diagrams Time-Function Mapping

Process Analysis* and Design

Value-Stream Mapping Process Charts Service Blueprinting Mass Service (Low Customization) Professional Service (High Cust.) Service factory (Low Cust.) Service Shop (High Cust.) Layout

High Labor Content Customer Interaction and Process Design Matrix*

Service Process Design

Low labor Content

C7.Process Strategy*

Opportunities to Improve Service Processes

Human resources

Selection of Equipment and Technology

Flexibility

Recent advances in technology* Machine Technology Automatic Identification Systems (AISs) and RFID Process Control

Production Technology

Vision systems Robots Automated Storage and Retrieval Systems (ASRSs) Automated Guided Vehicles (AGVs) Flexible manufacturing Systems (FMSs) Computer-Integrated Manufacturing (CIM)

Technology in Services

Process Redesign

Ethics and Environmentally friendly Processes

C7.Process Strategy..mmap - 3/17/2014 - Mindjet

Design capacity Design and Effective Capacity Capacity and Strategy Forecast demand accurately Understand the technology and capacity increments effective capacity Utilization=Actual Output/Design capacity Efficiency=Actual Output/Effective Capacity

Capacity*

4 Capacity Considerations

Find the optimum operating level (volume) Build for change

Demand Exceeds Capacity Managing Demand Adjusting to Seasonal Demands Tactics for Matching Capacity to Demand Demand Management Demand and Capacity Management in the Service Sector Capacity Management

Estimate future capacity requirement Evaluate existing capacity (when down/up) Identify alternatives Conduct the financial analyses Select one alternative Implement alternative chosen Monitor Results Break-even analysis, Fixed cost, Variable costs, Contribution, Revenue function Definitions Assumptions

S7.Capacity Planning

Capacity Planning

Break-Even Analysis*

Graphic Approach BE in units=Total FC/(Price-VC) Algebraic Approach Single-Product Case Multiproduct Case: BE in $=Tocal FC/[1-(VC/Price)]

Applying Decision Trees to Capacity

Applying Investment Analysis to Strategy-driven Investments

S7.Capacity Planning.mmap - 3/17/2014 - Mindjet

Investment, Variable Cost, and Cash flow Net Present Value*: