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Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.

Twenty Two

hapter

Operations & ServiceManagement

2000 by Harcourt, Inc.

ll rights reserved. !e"uests #or per$ission to $a%e copies o# any part o# the

&or% should be $ailed to the #ollo&ing address' Per$issions Depart$ent,Harcourt, Inc., (2)) Sea Harbor Drive, *rlando, +lorida 2--)())).

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Operations Management

/he #ield o# $anage$ent that specialies in the

physical production o# goods or services and uses

"uantitative techni"ues #or solving $anu#acturingproble$s

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The Organization as an

Operations Management System

Products and FacilitiesProduct design

+acilities layout

Capacity planning

+acilities location

Structure!eporting relationships

/ea$s

Control ProcessesInventory $anage$ent

Productivity

1uality

Operations ManagementInputs

!a& $aterials

Hu$an resources

and, buildings

In#or$ation/echnology

Outputs

Products

Services

Operations Strategy

The Technical Core

Feedback

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Manufacturing and Serice Operations

Service sector has increased three ti$es as #ast as the

$anu#acturing sector

More than onehal# o# all businesses are service

organiations

Manu#acturing organiation3produces physical goods.

Service organiation3produces nonphysical outputs that

re"uire custo$er involve$ent and cannot be stored ininventory.

Service sector has increased three ti$es as #ast as the

$anu#acturing sector

More than onehal# o# all businesses are service

organiations

Manu#acturing organiation3produces physical goods.

Service organiation3produces nonphysical outputs that

re"uire custo$er involve$ent and cannot be stored ininventory.

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Operations Strategy

/he recognition o# the i$portance o# operations to

the #ir$5s success and the involve$ent o# operations

$anagers in the organiation5s strategic planning.

7/26/2019 Chp22wef jw

7/17Developed by Stephen M.Peters Copyright 2000 by Harcourt, Inc. ll rights reserved.

Four Stages of

Operations Strategy

Stage !

Initiates Competitie

"dantage

6dvanced capabilities

developed andsigni#icant input to

strategic process

provided6Concerns'

7e& products

7e& services

7e& technologiesInternational

Stage #

Organizationally

Supportie

6*rganiation5s

co$petitive strategyclosely #ollo&ed and

supported6Concerns'

dvanced process

technologies

7e& plants

8hat to $a%e #or the9nited States

Stage $

Industry Current

6:oals set according to

industry practice

6Concerns'Capital invest$ent

1uality control

Inventory $anage$ent

Capacity

Stage %

&o Inolement

67o positive

contribution to

strategy #or$ulation6Concerns'

Cost

abor e##iciency

Source' ;ased on !.H. Hayes and S.C. 8heel&right, !estoring *ur Co$petitive

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'esigning Operations

Management System

9sing D+M is etre$ely epensive

D+M o#ten re"uires'

restructuring operations

creating tea$s o# designers

$anu#acturers

+our obEectives o# product design'

producibility

cost

"uality reliability

!eengineering process'

$anage$ent syste$s

Eob design

9sing D+M is etre$ely epensive

D+M o#ten re"uires'

restructuring operations

creating tea$s o# designers

$anu#acturers +our obEectives o# product design'

producibility

cost

"uality

reliability

!eengineering process'

$anage$ent syste$s

Eob design

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Facilities (ayout

Process layout' $achines that per#or$ the sa$e #unction

are grouped together in one location.

Product layout' $achines and tas%s are arranged

according to the se"uence o# steps in the production o# asingle product.

Cellular layout' $achines dedicated to se"uences o#

production are grouped into cells.+iedposition layout' the product re$ains in one location

and the re"uired tas%s and e"uip$ent are brought to it.

Process layout' $achines that per#or$ the sa$e #unction

are grouped together in one location.

Product layout' $achines and tas%s are arranged

according to the se"uence o# steps in the production o# a

single product.

Cellular layout' $achines dedicated to se"uences o#

production are grouped into cells.+iedposition layout' the product re$ains in one location

and the re"uired tas%s and e"uip$ent are brought to it.

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Production Technology

F

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Fle*ible Manufacturing Systems

9se o# auto$ated production lines that can be

adapted to produce $ore than one %ind o# product.

uto$ated #unctions include'

loading unloading

storing parts

changing tools $achining

Support a strategy o# $ass custo$iation.

9se o# auto$ated production lines that can be

adapted to produce $ore than one %ind o# product.

uto$ated #unctions include'

loading

unloading

storing parts

changing tools $achining

Support a strategy o# $ass custo$iation.

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Capacity Planning

Deter$ination and adEust$ent o# an organiation5s abilityto produce products or services to $atch de$and.

Can do several things to increase capacity'

?.create additional shi#ts

2.as% eisting people to &or% overti$e

.outsource or subcontract etra &or%

A.epand a plant and add $ore e"uip$ent

;iggest proble$ #or $ost organiations'

?.ecess capacity

2.add capacity as needed &ithout ecess

Deter$ination and adEust$ent o# an organiation5s abilityto produce products or services to $atch de$and.

Can do several things to increase capacity'

?.create additional shi#ts2.as% eisting people to &or% overti$e

.outsource or subcontract etra &or%

A.epand a plant and add $ore e"uip$ent

;iggest proble$ #or $ost organiations'

?.ecess capacity

2.add capacity as needed &ithout ecess

The +)reen 'ean,
http://www.mbdc.com/

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Inentory Management

/hree types o# inventory'

+inishedgoods inventory' ite$s that have passed

through the entire production process but have not beensold.

8or%inprocess inventory' $aterials $oving through

the stages o# the production process that are not

co$pleted products.

!a& $aterials inventory' basic inputs to the

organiation5s production process.

Office 'epot
http://www.officedepot.com/

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Two -asic 'ecisions that can .elp

Minimize Inentory Concerns

/conomic Order 0uantity Materials 1e2uirement Planning

Manufacturing 1esource Planning3ust4in4time Inentory System

/echni"ue designed to

$ini$ie the total o#

ordering and holding costs

#or inventory ite$s.

Techni2ues forManagement

Dependent de$and

inventory planning and

control syste$ that

schedules the eact a$ount

o# all $aterials re"uired tosupport the desired end

product.

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Managing Productiity

/&o approaches #or $easuring productivity'

/otal #actor productivity' the ration o# total outputs tothe inputs #ro$ labor, capital, $aterials, and energy.

Partial productivity' the ration o# total outputs to a

$aEor category o# inputs.

Productiity is the organization5s output ofgoods and serices diided by its inputs6

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chieve gro&th by

attracting ne&

custo$ers

chieve gro&th by

attracting ne&

custo$ers

&ay to position #or

the #uture &ay to position #or

the #uture

T0M Can Improe

Operations Management

8ay to $a%e co$pany

one o# the best8ay to $a%e co$pany

one o# the best

T0M (eads To7

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Improing Productiity

Three places to look7

/echnological productivity' the use o# $ore e##icient

$achines, robots, co$puters, and other technologies toincrease output.

8or%er productivity' having &or%ers produce $ore

output in the sa$e ti$e period.

Managerial productivity' $anagers do a better Eob o#running the business.

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