© 2006 Prentice Hall, Inc. 1 – 1
DR. SUYANTO, SE, MM, MAkDR. SUYANTO, SE, MM, MAk
ALAMAT :ALAMAT :Perumahan : Perumahan : Kota Kembang Depok RayaKota Kembang Depok Raya
Sektor Melati Blok F1 No. 3Sektor Melati Blok F1 No. 3 RT 05/05 Jatimulya, RT 05/05 Jatimulya,
SukmajayaSukmajaya, , Kota Depok 16413Kota Depok 16413
TelTelephone :ephone : 021-87913345, Fax. 021-87913347 021-87913345, Fax. 021-87913347
Mobile Phone :Mobile Phone : 0811-952956, 0813-14222230 0811-952956, 0813-14222230
Flexi Flexi : : 021-7024 4569021-7024 4569, 7027 7997, 7027 7997
E-mail : [email protected] : [email protected]
© 2006 Prentice Hall, Inc. 1 – 2
MANAJEMEN OPERASI DAN STRATEGI MANAJEMEN OPERASI DAN STRATEGI DALAM MENGHADAPI PERSAINGANDALAM MENGHADAPI PERSAINGAN
(Studi Kasus : ……………………………)(Studi Kasus : ……………………………)
• BAB I : PENDAHULUANBAB I : PENDAHULUAN
I.1. Latar Belakang MasalahI.1. Latar Belakang Masalah
I.2. I.2. PermasalahanPermasalahan
I.3. Ruang LingkupI.3. Ruang Lingkup
BAB II : PEMBAHASANBAB II : PEMBAHASAN
II.1. Landasan TeoriII.1. Landasan Teori
II.2. II.2. Analisa Masalah (SWOT Analysis)Analisa Masalah (SWOT Analysis)
II.3. II.3. Pemecahan Masalah (Problem Solving)Pemecahan Masalah (Problem Solving)
PENUTUPPENUTUP
III.1. KesimpulanIII.1. Kesimpulan
III.2. SaranIII.2. Saran
Daftar PustakaDaftar Pustaka
LampiranLampiran
© 2006 Prentice Hall, Inc. 1 – 3
Good Corporate GovernanceGood Corporate Governance
• Governance: Mengatur/Mengelola -- accountableGovernance: Mengatur/Mengelola -- accountable
• Bad Governance – rendahnya akuntabilitas Bad Governance – rendahnya akuntabilitas
• Good Governance – accountableGood Governance – accountable
• Definisi: Definisi:
– Komite Cadburry: keseimbangan antara kekuatan & Komite Cadburry: keseimbangan antara kekuatan & kewenangan – akuntabilitas kpd share/stakeholderskewenangan – akuntabilitas kpd share/stakeholders
– OECD: akuntabilitas kpd shareholders via proses OECD: akuntabilitas kpd shareholders via proses pengambilan keputusan yg bernilai tambah pengambilan keputusan yg bernilai tambah (transparan, responsible, accountable, dan fairness).(transparan, responsible, accountable, dan fairness).
– ADB: accountability, transparency, predictability, & ADB: accountability, transparency, predictability, & participationparticipation
© 2006 Prentice Hall, Inc. 1 – 4
Key aspect GCGKey aspect GCG
• Struktur yg mengatur hubungan yg harmonis Struktur yg mengatur hubungan yg harmonis tentang Dekom, Direksi, RUPS, & stakeholederstentang Dekom, Direksi, RUPS, & stakeholeders
• Sistem check & balance ttg perimbangan Sistem check & balance ttg perimbangan kewenangan atas pengendalian perusahaan utk kewenangan atas pengendalian perusahaan utk mencegah pengelolaan yg salah & mencegah pengelolaan yg salah & penyalahgunaan assetpenyalahgunaan asset
• Proses yg transparan atas Proses yg transparan atas penentuan/pencapaian tujuan perusahaan & penentuan/pencapaian tujuan perusahaan & pengukuran kinerja. pengukuran kinerja.
© 2006 Prentice Hall, Inc. 1 – 5
Tujuan GCGTujuan GCG
• Melindungi hak & Melindungi hak & kepentingan kepentingan share/stakeholdersshare/stakeholders
• Meningkatkan nilai Meningkatkan nilai perusahaanperusahaan
• Meningkatkan efisiensi & Meningkatkan efisiensi & efektifitasefektifitas
• Meningkatkan mutu Meningkatkan mutu hubungan berbagai hubungan berbagai elemen organisasi di elemen organisasi di perusahaanperusahaan
© 2006 Prentice Hall, Inc. 1 – 6
Manfaat GCG:Manfaat GCG:
• Mengurangi agency costMengurangi agency cost
• Mengurangi cost of capitalMengurangi cost of capital
• Meningkatkan nilai saham perusahaanMeningkatkan nilai saham perusahaan
• Menciptakan dukungan dari para stakeholdersMenciptakan dukungan dari para stakeholders
Lingkup:Lingkup:
• Extern – sistem hukumExtern – sistem hukum
• Intern – Budaya perusahaanIntern – Budaya perusahaan
© 2006 Prentice Hall, Inc. 1 – 7
Prinsip GCG (OECD):Prinsip GCG (OECD):
• TransparencyTransparency
• Accountability Accountability
• ResponsibilityResponsibility
• IndependencyIndependency
• FairnessFairness
© 2006 Prentice Hall, Inc. 1 – 8
Operations ManagementOperations ManagementChapter 1 – Operations and ProductivityChapter 1 – Operations and Productivity
© 2006 Prentice Hall, Inc.
PowerPoint presentation to accompanyPowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 6ePrinciples of Operations Management, 6eOperations Management, 8e Operations Management, 8e
© 2006 Prentice Hall, Inc. 1 – 9
OutlineOutline
Global Company Profile: Hard Rock Global Company Profile: Hard Rock CafeCafe
What Is Operations Management?What Is Operations Management?
Organizing To Produce Goods And Organizing To Produce Goods And Services Services
Why Study OM?Why Study OM?
What Operations Managers DoWhat Operations Managers Do How This Book Is OrganizedHow This Book Is Organized
© 2006 Prentice Hall, Inc. 1 – 10
Outline - ContinuedOutline - Continued
The Heritage Of Operations The Heritage Of Operations ManagementManagement
Operations In The Service SectorOperations In The Service Sector Differences Between Goods And Differences Between Goods And
ServicesServices
Growth Of ServicesGrowth Of Services
Service PayService Pay
Exciting New Trends In Operations Exciting New Trends In Operations ManagementManagement
© 2006 Prentice Hall, Inc. 1 – 11
Outline - ContinuedOutline - Continued
The Productivity ChallengeThe Productivity Challenge Productivity MeasurementProductivity Measurement
Productivity VariablesProductivity Variables
Productivity And The Service Sector Productivity And The Service Sector
Ethics And Social ResponsibilityEthics And Social Responsibility
© 2006 Prentice Hall, Inc. 1 – 12
Learning ObjectivesLearning Objectives
When you complete this chapter, When you complete this chapter, you should be able to:you should be able to:
Identify or DefineIdentify or Define::
Production and productivityProduction and productivity Operations management (OM)Operations management (OM) What operations managers doWhat operations managers do ServicesServices
© 2006 Prentice Hall, Inc. 1 – 13
Learning ObjectivesLearning Objectives
When you complete this chapter, When you complete this chapter, you should be able to:you should be able to:
Describe or ExplainDescribe or Explain ::
A brief history of operations A brief history of operations managementmanagement
Career opportunities in operations Career opportunities in operations managementmanagement
The future of the disciplineThe future of the discipline Measuring productivityMeasuring productivity
© 2006 Prentice Hall, Inc. 1 – 14
The Hard Rock CafeThe Hard Rock Cafe
First opened in 1971First opened in 1971 Now – 110 restaurants in over 40 countriesNow – 110 restaurants in over 40 countries
Rock music memorabiliaRock music memorabilia
Creates value in the form of good food Creates value in the form of good food and entertainmentand entertainment
3,5003,500++ custom meals per day in Orlando custom meals per day in Orlando
How does an item get on the menu?How does an item get on the menu?
Role of the Operations ManagerRole of the Operations Manager
© 2006 Prentice Hall, Inc. 1 – 15
What Is Operations What Is Operations Management?Management?
ProductionProduction is the creation of is the creation of goods and servicesgoods and services
Operations management (OM)Operations management (OM) is the set of activities that is the set of activities that
creates value in the form of creates value in the form of goods and services by goods and services by
transforming inputs into transforming inputs into outputsoutputs
© 2006 Prentice Hall, Inc. 1 – 16
Organizing to Produce Organizing to Produce Goods and ServicesGoods and Services
Essential functions:Essential functions: Marketing – generates demandMarketing – generates demand
Production/operations – creates Production/operations – creates the productthe product
Finance/accounting – tracks how Finance/accounting – tracks how well the organization is doing, pays well the organization is doing, pays bills, collects the moneybills, collects the money
© 2006 Prentice Hall, Inc. 1 – 17
Organizational ChartsOrganizational Charts
OperationsTeller SchedulingCheck ClearingCollectionTransaction processingFacilities design/layoutVault operationsMaintenanceSecurity
FinanceInvestmentsSecurityReal estate
Accounting
Auditing
MarketingLoans Commercial Industrial Financial Personal Mortgage
Trust Department
Commercial Bank
Figure 1.1(A)Figure 1.1(A)
© 2006 Prentice Hall, Inc. 1 – 18
Organizational ChartsOrganizational Charts
OperationsGround support equipmentMaintenanceGround Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications DispatchingManagement science
Finance/ accountingAccounting Payables Receivables General LedgerFinance Cash control International exchange
Airline
Figure 1.1(B)Figure 1.1(B)
MarketingTraffic administration Reservations Schedules Tariffs (pricing)SalesAdvertising
© 2006 Prentice Hall, Inc. 1 – 19
MarketingSales promotionAdvertisingSalesMarket research
Organizational ChartsOrganizational Charts
OperationsFacilities Construction; maintenance
Production and inventory control Scheduling; materials control
Quality assurance and controlSupply-chain managementManufacturing Tooling; fabrication; assembly
Design Product development and design Detailed product specifications
Industrial engineering Efficient use of machines, space, and personnel
Process analysis Development and installation of production tools and equipment
Finance/ accountingDisbursements/ credits Receivables Payables General ledgerFunds Management Money market International exchangeCapital requirements Stock issue Bond issue and recall
Manufacturing
Figure 1.1(C)Figure 1.1(C)
© 2006 Prentice Hall, Inc. 1 – 20
Why Study OM?Why Study OM?
OM is one of three major functions OM is one of three major functions (marketing, finance, and operations) (marketing, finance, and operations) of any organizationof any organization
We want (We want (and needand need) to know how ) to know how goods and services are producedgoods and services are produced
We want to understand what We want to understand what operations managers dooperations managers do
OM is such a costly part of an OM is such a costly part of an organizationorganization
© 2006 Prentice Hall, Inc. 1 – 21
Options for Increasing Options for Increasing ContributionContribution
SalesSales $100,000$100,000 $150,000$150,000 $100,000$100,000 $100,000$100,000
Cost of Goods Cost of Goods –– 80,000 80,000 –– 120,000 120,000 –– 80,000 80,000 –– 64,000 64,000
Gross MarginGross Margin 20,00020,000 30,00030,000 20,00020,000 36,00036,000
Finance CostsFinance Costs –– 6,000 6,000 –– 6,000 6,000 –– 3,000 3,000 –– 6,000 6,000
SubtotalSubtotal 14,00014,000 24,00024,000 17,00017,000 30,00030,000
Taxes at 25%Taxes at 25% –– 3,500 3,500 –– 6,000 6,000 –– 4,250 4,250 –– 7,500 7,500
ContributionContribution $ 10,500$ 10,500 $ 18,000$ 18,000 $ 12,750$ 12,750 $ 22,500$ 22,500
Finance/Finance/MarketingMarketing AccountingAccounting OMOM
OptionOption OptionOption OptionOption
IncreaseIncrease ReduceReduce ReduceReduceSalesSales FinanceFinance ProductionProduction
CurrentCurrent Revenue 50%Revenue 50% Costs 50%Costs 50% Costs 20%Costs 20%
© 2006 Prentice Hall, Inc. 1 – 22
What Operations What Operations Managers DoManagers Do
PlanningPlanning
OrganizingOrganizing
StaffingStaffing
LeadingLeading
ControllingControlling
Basic Management FunctionsBasic Management Functions
© 2006 Prentice Hall, Inc. 1 – 23
Ten Critical DecisionsTen Critical DecisionsTen Decision AreasTen Decision Areas Chapter(s)Chapter(s)
Service and product designService and product design 55 Quality managementQuality management 66
6 Supplement6 Supplement Process and capacity Process and capacity 77
design design 7 Supplement7 Supplement LocationLocation 88 Layout designLayout design 99 Human resources, Human resources, 1010
job design job design 10 Supplement10 Supplement Supply-chain Supply-chain 1111
management management 11 Supplement11 Supplement Inventory managementInventory management 12, 14, 1612, 14, 16 SchedulingScheduling 13, 1513, 15 MaintenanceMaintenance 1717 Table 1.2Table 1.2
© 2006 Prentice Hall, Inc. 1 – 24
The Critical DecisionsThe Critical Decisions
Service and product designService and product design What good or service should we What good or service should we
offer?offer? How should we design these products How should we design these products
and services? and services?
Quality managementQuality management How do we define quality?How do we define quality? Who is responsible for quality?Who is responsible for quality?
Table 1.2 (cont.)Table 1.2 (cont.)
© 2006 Prentice Hall, Inc. 1 – 25
The Critical DecisionsThe Critical Decisions
Process and capacity designProcess and capacity design What process and what capacity will What process and what capacity will
these products require?these products require?
What equipment and technology is What equipment and technology is necessary for these processes?necessary for these processes?
LocationLocation Where should we put the facility?Where should we put the facility?
On what criteria should we base the On what criteria should we base the location decision?location decision?
Table 1.2 (cont.)Table 1.2 (cont.)
© 2006 Prentice Hall, Inc. 1 – 26
The Critical DecisionsThe Critical Decisions Layout designLayout design
How should we arrange the facility How should we arrange the facility and material flow?and material flow?
How large must the facility be to meet How large must the facility be to meet our plan?our plan?
Human resources and job designHuman resources and job design How do we provide a reasonable work How do we provide a reasonable work
environment?environment? How much can we expect our How much can we expect our
employees to produce?employees to produce?
Table 1.2 (cont.)Table 1.2 (cont.)
© 2006 Prentice Hall, Inc. 1 – 27
The Critical DecisionsThe Critical Decisions
Supply-chain managementSupply-chain management Should we make or buy this component?Should we make or buy this component?
Who are our suppliers and who can Who are our suppliers and who can integrate into our e-commerce program?integrate into our e-commerce program?
Inventory, material requirements Inventory, material requirements planning, and JITplanning, and JIT How much inventory of each item should How much inventory of each item should
we have?we have?
When do we re-order?When do we re-order?Table 1.2 (cont.)Table 1.2 (cont.)
© 2006 Prentice Hall, Inc. 1 – 28
The Critical DecisionsThe Critical Decisions
Intermediate and shortIntermediate and short––term term schedulingscheduling Are we better off keeping people on Are we better off keeping people on
the payroll during slowdowns?the payroll during slowdowns?
Which jobs do we perform next?Which jobs do we perform next?
MaintenanceMaintenance Who is responsible for maintenance?Who is responsible for maintenance?
When do we do maintenance?When do we do maintenance?
Table 1.2 (cont.)Table 1.2 (cont.)
© 2006 Prentice Hall, Inc. 1 – 29
Where are the OM Jobs?Where are the OM Jobs?
Figure 1.2Figure 1.2
© 2006 Prentice Hall, Inc. 1 – 30
Where are the OM Jobs?Where are the OM Jobs?
Technology/methodsTechnology/methods Facilities/space utilizationFacilities/space utilization Strategic issuesStrategic issues Response timeResponse time People/team developmentPeople/team development Customer serviceCustomer service QualityQuality Cost reductionCost reduction Inventory reductionInventory reduction Productivity improvementProductivity improvement
© 2006 Prentice Hall, Inc. 1 – 31
Significant Events in OMSignificant Events in OM
Figure 1.3Figure 1.3
© 2006 Prentice Hall, Inc. 1 – 32
The Heritage of OMThe Heritage of OM
Division of labor (Adam Smith 1776; Division of labor (Adam Smith 1776; Charles Babbage 1852)Charles Babbage 1852)
Standardized parts (Whitney 1800)Standardized parts (Whitney 1800)
Scientific Management (Taylor 1881)Scientific Management (Taylor 1881)
Coordinated assembly line (Ford/ Coordinated assembly line (Ford/ Sorenson/Avery 1913)Sorenson/Avery 1913)
Gantt charts (Gantt 1916)Gantt charts (Gantt 1916)
Motion study (Frank and Lillian Gilbreth Motion study (Frank and Lillian Gilbreth 1922)1922)
Quality control (Shewhart 1924; Deming Quality control (Shewhart 1924; Deming 1950)1950)
© 2006 Prentice Hall, Inc. 1 – 33
The Heritage of OMThe Heritage of OM
Computer (Atanasoff 1938)Computer (Atanasoff 1938)
CPM/PERT (DuPont 1957)CPM/PERT (DuPont 1957)
Material requirements planning (Orlicky Material requirements planning (Orlicky 1960)1960)
Computer aided design (CAD 1970)Computer aided design (CAD 1970)
Flexible manufacturing system (FMS 1975)Flexible manufacturing system (FMS 1975)
Baldrige Quality Awards (1980)Baldrige Quality Awards (1980)
Computer integrated manufacturing (1990)Computer integrated manufacturing (1990)
Globalization (1992)Globalization (1992)
Internet (1995)Internet (1995)
© 2006 Prentice Hall, Inc. 1 – 34
Eli WhitneyEli Whitney
Born 1765; died 1825Born 1765; died 1825
In 1798, received government In 1798, received government contract to make 10,000 musketscontract to make 10,000 muskets
Showed that machine tools could Showed that machine tools could make standardized parts to exact make standardized parts to exact specificationsspecificationsMusket parts could be used in any Musket parts could be used in any
musketmusket
© 2006 Prentice Hall, Inc. 1 – 35
Frederick W. TaylorFrederick W. Taylor
Born 1856; died 1915Born 1856; died 1915
Known as ‘father of scientific Known as ‘father of scientific management’management’
In 1881, as chief engineer for In 1881, as chief engineer for Midvale Steel, studied how tasks Midvale Steel, studied how tasks were donewere doneBegan first motion and time studiesBegan first motion and time studies
Created efficiency principlesCreated efficiency principles
© 2006 Prentice Hall, Inc. 1 – 36
Taylor’s PrinciplesTaylor’s Principles
Matching employees to right jobMatching employees to right job
Providing the proper trainingProviding the proper training
Providing proper work methods and Providing proper work methods and toolstools
Establishing legitimate incentives for Establishing legitimate incentives for work to be accomplishedwork to be accomplished
Management Should Take More Management Should Take More Responsibility for:Responsibility for:
© 2006 Prentice Hall, Inc. 1 – 37
Frank & Lillian GilbrethFrank & Lillian Gilbreth
Frank (1868-1924); Lillian (1878-Frank (1868-1924); Lillian (1878-1972)1972)
Husband-and-wife engineering teamHusband-and-wife engineering team
Further developed work Further developed work measurement methodsmeasurement methods
Applied efficiency methods to their Applied efficiency methods to their home and 12 children! home and 12 children!
Book & Movie: “Cheaper by the Book & Movie: “Cheaper by the Dozen,” book: “Bells on Their Toes”Dozen,” book: “Bells on Their Toes”
© 2006 Prentice Hall, Inc. 1 – 38
Born 1863; died 1947Born 1863; died 1947
In 1903, created Ford Motor In 1903, created Ford Motor CompanyCompany
In 1913, first used moving assembly In 1913, first used moving assembly line to make Model Tline to make Model TUnfinished product moved by Unfinished product moved by
conveyor past work stationconveyor past work station
Paid workers very well for 1911 Paid workers very well for 1911 ($5/day!)($5/day!)
Henry FordHenry Ford
© 2006 Prentice Hall, Inc. 1 – 39
W. Edwards DemingW. Edwards Deming
Born 1900; died 1993Born 1900; died 1993
Engineer and physicistEngineer and physicist
Credited with teaching Japan Credited with teaching Japan quality control methods in post-quality control methods in post-WW2WW2
Used statistics to analyze processUsed statistics to analyze process
His methods involve workers in His methods involve workers in decisionsdecisions
© 2006 Prentice Hall, Inc. 1 – 40
Contributions FromContributions From
Human factorsHuman factors
Industrial engineeringIndustrial engineering
Management scienceManagement science
Biological scienceBiological science
Physical sciencesPhysical sciences
Information science Information science
© 2006 Prentice Hall, Inc. 1 – 41
New Challenges in OMNew Challenges in OM
Global focusGlobal focus
Just-in-timeJust-in-time
Supply chain Supply chain partneringpartnering
Rapid product Rapid product development, development, alliancesalliances
Mass Mass customizationcustomization
Empowered Empowered employees, teamsemployees, teams
ToToFromFrom Local or national focusLocal or national focus
Batch shipmentsBatch shipments
Low bid purchasingLow bid purchasing
Lengthy product Lengthy product developmentdevelopment
Standard productsStandard products
Job specializationJob specialization
© 2006 Prentice Hall, Inc. 1 – 42
Characteristics of GoodsCharacteristics of Goods
Tangible productTangible product
Consistent product Consistent product definitiondefinition
Production usually Production usually separate from separate from consumptionconsumption
Can be inventoriedCan be inventoried
Low customer Low customer interactioninteraction
© 2006 Prentice Hall, Inc. 1 – 43
Characteristics of ServiceCharacteristics of Service Intangible productIntangible product
Produced and Produced and consumed at same timeconsumed at same time
Often uniqueOften unique
High customer High customer interactioninteraction
Inconsistent product Inconsistent product definitiondefinition
Often knowledge-basedOften knowledge-based
Frequently dispersedFrequently dispersed
© 2006 Prentice Hall, Inc. 1 – 44
Industry and Services as Industry and Services as Percentage of GDPPercentage of GDP
ServicesServices ManufacturingManufacturing
Au
stra
liaA
ust
ralia
Can
ada
Can
ada
Ch
ina
Ch
ina
Cze
ch R
epC
zech
Rep
Fra
nce
Fra
nce
Ger
man
yG
erm
any
Ho
ng
Ko
ng
Ho
ng
Ko
ng
Jap
anJa
pan
Mex
ico
Mex
ico
Ru
ssia
n F
edR
uss
ian
Fed
So
uth
Afr
ica
So
uth
Afr
ica
Sp
ain
Sp
ain
UK
UK
US
US
90 90 −
80 80 −
70 70 −
60 60 −
50 50 −
40 40 −
30 30 −
20 20 −
10 10 −
00 −
© 2006 Prentice Hall, Inc. 1 – 45
Goods Versus ServicesGoods Versus Services
Table 1.3Table 1.3
Can be resoldCan be resold
Can be inventoriedCan be inventoried
Some aspects of quality Some aspects of quality measurablemeasurable
Selling is distinct from Selling is distinct from productionproduction
Product is transportableProduct is transportable
Site of facility important for costSite of facility important for cost
Often easy to automateOften easy to automate
Revenue generated primarily Revenue generated primarily from tangible productfrom tangible product
Attributes of GoodsAttributes of Goods(Tangible Product)(Tangible Product)
Attributes of ServicesAttributes of Services (Intangible Product) (Intangible Product)
Reselling unusualReselling unusual
Difficult to inventoryDifficult to inventory
Quality difficult to measureQuality difficult to measure
Selling is part of service Selling is part of service
Provider, not product, isProvider, not product, isoften transportableoften transportable
Site of facility important forSite of facility important forcustomer contactcustomer contact
Often difficult to automateOften difficult to automate
Revenue generated primarily Revenue generated primarily from the intangible servicefrom the intangible service
© 2006 Prentice Hall, Inc. 1 – 46
Goods and ServicesGoods and ServicesAutomobile
Computer
Installed carpeting
Fast-food meal
Restaurant meal/auto repair
Hospital care
Advertising agency/investment management
Consulting service/teaching
Counseling
Percent of Product that is a GoodPercent of Product that is a Good Percent of Product that is a ServicePercent of Product that is a Service
100%100% 7575 5050 2525 00 2525 5050 7575 100%100%|| || || || || || || || ||
Figure 1.4Figure 1.4
© 2006 Prentice Hall, Inc. 1 – 47
Organizations in Each SectorOrganizations in Each Sector
Service SectorService Sector ExampleExample% of all % of all
JobsJobs
Professional Professional Services, Services, Education, Education, Legal, MedicalLegal, Medical
Notre Dame University, Notre Dame University, San Diego Zoo, Arnold San Diego Zoo, Arnold Palmer HospitalPalmer Hospital
25.525.5
Trade (retail, Trade (retail, wholesale)wholesale)
Walgreen’s, Wal-Mart, Walgreen’s, Wal-Mart, Nordstrom’sNordstrom’s
20.620.6
Utilities, Utilities, TransportationTransportation
Pacific Gas & Electric, Pacific Gas & Electric, American Airlines, Santa American Airlines, Santa Fe R.R., Roadway Fe R.R., Roadway ExpressExpress
7.17.1
Table 1.4Table 1.4
© 2006 Prentice Hall, Inc. 1 – 48
Organizations in Each SectorOrganizations in Each Sector
Service SectorService Sector ExampleExample% of all % of all
JobsJobs
Business and Business and Repair ServicesRepair Services
Snelling and Snelling, Snelling and Snelling, Waste Management, Waste Management, Pitney-BowesPitney-Bowes
6.96.9
Finance, Finance, Insurance, Insurance, Real EstateReal Estate
Citicorp, American Citicorp, American Express, Prudential, Express, Prudential, Aetna, Trammel CrowAetna, Trammel Crow
6.76.7
Food, Lodging, Food, Lodging, EntertainmentEntertainment
McDonald’s, Hard Rock McDonald’s, Hard Rock Café, Motel 6, Hilton Café, Motel 6, Hilton Hotels, Walt Disney, Hotels, Walt Disney, Paramount PicturesParamount Pictures
5.45.4
Public Public AdministrationAdministration
U.S., State of Alabama, U.S., State of Alabama, Cook CountyCook County
4.54.5
Table 1.4Table 1.4
© 2006 Prentice Hall, Inc. 1 – 49
Organizations in Each SectorOrganizations in Each SectorManufacturing Manufacturing SectorSector ExampleExample
% of all % of all JobsJobs
GeneralGeneral General Electric, Ford, General Electric, Ford, U.S. Steel, IntelU.S. Steel, Intel
13.313.3
ConstructionConstruction Bechtel, McDermottBechtel, McDermott 7.17.1
AgricultureAgriculture King RanchKing Ranch 2.52.5
MiningMining Homestake MiningHomestake Mining 0.40.4
SectorSector Percent of all jobsPercent of all jobs
ServiceService 76.7%76.7%
ManufacturingManufacturing 23.3%23.3%
Table 1.4Table 1.4
© 2006 Prentice Hall, Inc. 1 – 50
ServicesServices
Manufacturing
Manufacturing
Development of the Development of the Service EconomyService Economy
Figure 1.5 (A)Figure 1.5 (A)
AgricultureAgriculture
100100
9090
8080
7070
6060
5050
4040
3030
2020
1010
00
18001800 18501850 19001900 19501950 20002000
© 2006 Prentice Hall, Inc. 1 – 51
Development of the Development of the Service EconomyService Economy
Figure 1.5 (B)Figure 1.5 (B)
30 30 –
25 25 –
20 20 –
15 15 –
10 10 –
5 5 –
0 0 –19501950 19701970 19901990 20102010
– 150150
– 125125
– 100100
– 7575
– 5050
– 2525
– 00
Em
plo
ymen
t (m
illi
on
s)E
mp
loym
ent
(mil
lio
ns)
In
dex
: In
dex
: 19
97 =
100
1997
= 1
00
Manufacturingemployment
Industrial production
Estimate
© 2006 Prentice Hall, Inc. 1 – 52
Development of the Development of the Service EconomyService Economy
Figure 1.5 (C)Figure 1.5 (C)
United States
Canada
France
Italy
Britain
Japan
W. Germany
1970 2005
| | | | |
40 50 60 70 80Percent
© 2006 Prentice Hall, Inc. 1 – 53
New Trends in OMNew Trends in OM
Local or Local or national national focusfocus
Low-cost, reliable Low-cost, reliable worldwide communication worldwide communication and transportation and transportation networksnetworks
Global focusGlobal focus
Batch (large) Batch (large) shipmentsshipments
Short product life cycles Short product life cycles and cost of capital put and cost of capital put pressure on reducing pressure on reducing inventoryinventory
Just-in-time Just-in-time shipmentsshipments
Low-bid Low-bid purchasingpurchasing
Quality emphasis requires Quality emphasis requires that suppliers be engaged that suppliers be engaged in product improvementin product improvement
Supply-Supply-chain chain partners, partners, Enterprise Enterprise Resource Resource Planning, Planning, e-commercee-commerce
Figure 1.6Figure 1.6
PastPast CausesCauses FutureFuture
© 2006 Prentice Hall, Inc. 1 – 54
New Trends in OMNew Trends in OM
Lengthy Lengthy product product developmentdevelopment
Shorter life cycles, Shorter life cycles, Internet, rapid international Internet, rapid international communication, computer-communication, computer-aided design, and aided design, and international collaborationinternational collaboration
Rapid product Rapid product development, development, alliances, alliances, collaborative collaborative designsdesigns
Standardized Standardized productsproducts
Affluence and worldwide Affluence and worldwide markets; increasingly markets; increasingly flexible production flexible production processesprocesses
Mass Mass customization customization with added with added emphasis on emphasis on qualityquality
Job Job specializationspecialization
Changing socioculture Changing socioculture milieu; increasingly a milieu; increasingly a knowledge and information knowledge and information societysociety
Empowered Empowered employees, employees, teams, and teams, and lean lean productionproduction
Figure 1.6Figure 1.6
PastPast CausesCauses FutureFuture
© 2006 Prentice Hall, Inc. 1 – 55
New Trends in OMNew Trends in OM
Low-cost Low-cost focusfocus
Environmental issues, ISO Environmental issues, ISO 14000, increasing disposal 14000, increasing disposal costscosts
Environmentally Environmentally sensitive sensitive production, production, green green manufacturing, manufacturing, recycled recycled materials, materials, remanufacturingremanufacturing
Figure 1.6Figure 1.6
PastPast CausesCauses FutureFuture
© 2006 Prentice Hall, Inc. 1 – 56
Productivity ChallengeProductivity Challenge
Productivity is the ratio of outputs (goods Productivity is the ratio of outputs (goods and services) divided by the inputs and services) divided by the inputs
(resources such as labor and capital)(resources such as labor and capital)
The objective is to improve this The objective is to improve this measure of efficiencymeasure of efficiency
Important Note!Production is a measure of output
only and not a measure of efficiency
© 2006 Prentice Hall, Inc. 1 – 57
FeedbackFeedback looploop
OutputsOutputs
Goods and
services
ProcessesProcesses
The U.S. economic system transforms inputs to outputs
at about an annual 2.5% increase in productivity per
year. The productivity increase is the result of a
mix of capital (38% of 2.5%), labor (10% of 2.5%), and
management (52% of 2.5%).
The Economic SystemThe Economic System
InputsInputs
Labor,capital,
management
Figure 1.7Figure 1.7
© 2006 Prentice Hall, Inc. 1 – 58
Increasing Productivity – Increasing Productivity – The LA Motor PoolThe LA Motor Pool
Before:Before: Cost Cost $120$120 million annually million annually 21,00021,000 vehicles vehicles 30%30% of the of the 900900 trash trucks were in repair trash trucks were in repair 11%11% of police cars were in repair of police cars were in repair
Actions:Actions: Created team assignmentsCreated team assignments Assigned parking places for trucksAssigned parking places for trucks Tires checked and trucks emptied each nightTires checked and trucks emptied each night Standard customer pickups establishedStandard customer pickups established Computerized fleet managementComputerized fleet management Mechanics moved to night shiftMechanics moved to night shift
© 2006 Prentice Hall, Inc. 1 – 59
Increasing Productivity – Increasing Productivity – The LA Motor PoolThe LA Motor Pool
Cost $120 million annuallyCost $120 million annually 21,000 vehicles21,000 vehicles 30% of the 900 garbage trucks were in repair30% of the 900 garbage trucks were in repair 11% of police cars were in repair11% of police cars were in repair
Before:Before:
Actions:Actions: Creating team assignmentsCreating team assignments Assigned parking places for trucksAssigned parking places for trucks Tire checked and trucks emptied each nightTire checked and trucks emptied each night Standard customer pickups establishedStandard customer pickups established Computerized fleet managementComputerized fleet management Mechanics moved to night shiftMechanics moved to night shift
Results: Total fleet reduced by 500 vehicles
Parts inventory dropped 20% reducing cost by $5.4 million annually
Standardized pickups reduced costs by $12 million annually
Out of service garbage trucks dropped to 18%
© 2006 Prentice Hall, Inc. 1 – 60
Measure of process improvementMeasure of process improvement
Represents output relative to inputRepresents output relative to input
Only through productivity increases Only through productivity increases can our standard of living improvecan our standard of living improve
ProductivityProductivity
Productivity =Productivity =Units producedUnits produced
Input usedInput used
© 2006 Prentice Hall, Inc. 1 – 61
Productivity CalculationsProductivity Calculations
Productivity =Productivity =Units producedUnits produced
Labor-hours usedLabor-hours used
= = = = 44 units/labor-hour units/labor-hour1,0001,000
250250
Labor ProductivityLabor Productivity
© 2006 Prentice Hall, Inc. 1 – 62
Multi-Factor Productivity Multi-Factor Productivity
OutputOutput
Labor + Material + Energy Labor + Material + Energy + Capital + Miscellaneous+ Capital + Miscellaneous
Productivity =Productivity =
Also known as total factor productivityAlso known as total factor productivity
Output and inputs are often expressed Output and inputs are often expressed in dollarsin dollars
© 2006 Prentice Hall, Inc. 1 – 63
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 8 8 hrs/dayhrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
==Old labor Old labor
productivityproductivity88 titles/day titles/day
3232 labor-hrs labor-hrs
© 2006 Prentice Hall, Inc. 1 – 64
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
88 titles/day titles/day
3232 labor-hrs labor-hrs==
Old labor Old labor productivityproductivity = = .25.25 titles/labor-hr titles/labor-hr
© 2006 Prentice Hall, Inc. 1 – 65
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 8 8 hrs/dayhrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
88 titles/day titles/day
3232 labor-hrs labor-hrs==
Old labor Old labor productivityproductivity
==New labor New labor
productivityproductivity
= .25 titles/labor-hr= .25 titles/labor-hr
1414 titles/day titles/day
3232 labor-hrs labor-hrs
© 2006 Prentice Hall, Inc. 1 – 66
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
88 titles/day titles/day
3232 labor-hrs labor-hrs==
Old labor Old labor productivityproductivity = = .25.25 titles/labor-hr titles/labor-hr
14 14 titles/daytitles/day
3232 labor-hrs labor-hrs==
New labor New labor productivityproductivity = = .4375.4375 titles/labor-hr titles/labor-hr
© 2006 Prentice Hall, Inc. 1 – 67
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
==Old multifactor Old multifactor
productivityproductivity88 titles/day titles/day
$640 + 400$640 + 400
© 2006 Prentice Hall, Inc. 1 – 68
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
88 titles/day titles/day
$640 + 400$640 + 400==
Old multifactor Old multifactor productivityproductivity = = .0077.0077 titles/dollar titles/dollar
© 2006 Prentice Hall, Inc. 1 – 69
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
88 titles/day titles/day
$640 + 400$640 + 400==
Old multifactor Old multifactor productivityproductivity
==New multifactor New multifactor
productivityproductivity
= = .0077.0077 titles/dollar titles/dollar
1414 titles/day titles/day
$640 + 800$640 + 800
© 2006 Prentice Hall, Inc. 1 – 70
Collins Title ProductivityCollins Title Productivity
Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day
Old System:Old System:
1414 titles/day titles/day Overhead = Overhead = $800$800/day/day
New System:New System:
88 titles/day titles/day
$640 + 400$640 + 400
1414 titles/day titles/day
$640 + 800$640 + 800
==Old multifactor Old multifactor
productivityproductivity
==New multifactor New multifactor
productivityproductivity
= = .0077.0077 titles/dollar titles/dollar
= = .0097.0097 titles/dollar titles/dollar
© 2006 Prentice Hall, Inc. 1 – 71
Measurement ProblemsMeasurement Problems
QualityQuality may change while the may change while the quantity of inputs and outputs quantity of inputs and outputs remains constantremains constant
External elementsExternal elements may cause an may cause an increase or decrease in productivityincrease or decrease in productivity
Precise unitsPrecise units of measure may be of measure may be lackinglacking
© 2006 Prentice Hall, Inc. 1 – 72
Productivity VariablesProductivity Variables
LaborLabor - contributes about - contributes about 10%10% of of the annual increasethe annual increase
CapitalCapital - contributes about - contributes about 32%32% of the annual increaseof the annual increase
ManagementManagement - contributes about - contributes about 52%52% of the annual increase of the annual increase
© 2006 Prentice Hall, Inc. 1 – 73
Key Variables for Improved Key Variables for Improved Labor ProductivityLabor Productivity
Basic education appropriate for the Basic education appropriate for the labor forcelabor force
Diet of the labor forceDiet of the labor force
Social overhead that makes labor Social overhead that makes labor availableavailable
Maintaining and enhancing skills in the Maintaining and enhancing skills in the midst of rapidly changing technology midst of rapidly changing technology and knowledgeand knowledge
© 2006 Prentice Hall, Inc. 1 – 74
Labor SkillsLabor Skills
About half of the 17-year-olds in the US cannot About half of the 17-year-olds in the US cannot correctly answer questions of this typecorrectly answer questions of this type
Figure 1.8Figure 1.8
© 2006 Prentice Hall, Inc. 1 – 75
Investment and Productivity Investment and Productivity in Selected Nationsin Selected Nations
USUS UKUK
CanadaCanada
ItalyItaly
BelgiumBelgium
FranceFrance
NetherlandsNetherlands
JapanJapan
1010
88
66
44
22
00Per
cen
t in
crea
se in
mfg
pro
du
ctiv
ity
Per
cen
t in
crea
se in
mfg
pro
du
ctiv
ity
Percentage investmentPercentage investment
1010 1515 2020 2525 3030 3535
© 2006 Prentice Hall, Inc. 1 – 76
Service ProductivityService Productivity
Typically labor intensiveTypically labor intensive
Frequently focused on unique Frequently focused on unique individual attributes or desiresindividual attributes or desires
Often an intellectual task performed by Often an intellectual task performed by professionalsprofessionals
Often difficult to mechanizeOften difficult to mechanize
Often difficult to evaluate for qualityOften difficult to evaluate for quality
© 2006 Prentice Hall, Inc. 1 – 77
Productivity at Taco BellProductivity at Taco Bell
Improvements:Improvements: Revised the menu Revised the menu Designed meals for easy preparationDesigned meals for easy preparation Shifted some preparation to suppliersShifted some preparation to suppliers Efficient layout and automationEfficient layout and automation Training and employee empowermentTraining and employee empowerment
© 2006 Prentice Hall, Inc. 1 – 78
Productivity at Taco BellProductivity at Taco Bell
Improvements:Improvements: Revised the menu Revised the menu Designed meals for easy preparationDesigned meals for easy preparation Shifted some preparation to suppliersShifted some preparation to suppliers Efficient layout and automationEfficient layout and automation Training and employee empowermentTraining and employee empowerment
Results:
Preparation time cut to 8 seconds Management span of control
increased from 5 to 30 In-store labor cut by 15 hours/day Stores handle twice the volume with
half the labor Fast-food low-cost leader
© 2006 Prentice Hall, Inc. 1 – 79
Ethics and Social ResponsibilityEthics and Social Responsibility
Challenges facing Challenges facing operations managers:operations managers:
Developing safe quality productsDeveloping safe quality products
Maintaining a clean environmentMaintaining a clean environment
Providing a safe workplaceProviding a safe workplace
Honoring community commitmentsHonoring community commitments