Professional Documents
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Mba 8155 Slides 1
Mba 8155 Slides 1
Irwin/McGraw-Hill
Operations Management
Cross-Functional Applications
Irwin/McGraw-Hill
Current Trends
96 of the top 100 industries in the U.S. have large $
worth of exports. Exporting industries are characterized by early ongoing investments in advanced product and process technologies.
Productivity is increasing and has become a basis
for competition. Success domestically and globally is dependent on the ability to compete on many fronts, including operations (e.g., internet - easy to find potential customers, but hard to deliver)
Outsourcing of manufacturing and services (e.g.,
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Environmental/social
environmental protection health costs labor unions education system consumer tastes retailing capabilities employee
External
transportation costs logistics resources labor supply, capabilities training resources communications public infrastructure
Corporate
Technological
Operations
costs/productivity quality delivery cycle delivery reliability flexibility for prod change flexibility for vol. change New product introduction inventory mgt. Prod. Planning Control Equip. & process tech #, size, location of facilities logistics customer service information technology
Suppliers
abilities coordination location competition cooperation
strategy R&D risk avoidance engineering role of functions product development Fin-Mktg-Mfg-Eng-R&D process development balance sheet new products financial capacity development process marketing policies export sales competencies Technological sophistication of mgt
**Wickham Skinner: The Role of the Industrial Managers in the Massive U.S. Negative Trade Balance, April 2000
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Corporate Strategy
Finance Strategy
Operations Strategy
Marketing Strategy
Operations Management
Plants
Parts
Input
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Output
Key OM Concepts
Efficiency - Doing something at the lowest possible cost Effectiveness - Doing the right things to create the most value for the organization Value - Quality divided by price
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Transformations
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Restaurant
Hungry Customers Prepare Food Food, Chef Serve Food Servers Atmosphere Sheet Steel Engine Parts Tools, Equipment Workers
Satisfied Customers
Automobile Plant
University
High School Grads Transferring Teachers, Books of Knowledge Classroom and Skills
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Service or Good?
If you drop it on your foot, it wont hurt you. (Good or service?) Services never include goods and goods never include services. (True or false?)
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Service or Manufacturing?
The company certainly manufactures tangible products Why then would we consider McDonalds a service business?
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Service Provider
Front Office
Customer
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Value-Added Services
Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way.
Information
Problem Solving and Field Support
Sales Support
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History of Operations
Cottage System <1700 Industrial Revolution 1700 - 1800 1850s Civil War Scientific Management 1890s Moving Assembly Line 1910s Hawthorne Studies 1930s Operations Research 1940s
Global Competition 1970s Service Revolution 1980s Mass Customization 1990s
TIME
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Development of OM as a Field The Names and Emphasis Change, but the Elements Remain Basically the Same!
Scientific Management Moving Assembly Line Hawthorne Studies Operations Research
Manufacturing Strategy
JIT/Lean Manufacturing Manufacturing Resources Planning Service Quality and Productivity
Historical Underpinnings
Irwin/McGraw-Hill
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New Manufacturing Orders Production Volume Deliveries Inventory Levels Employment >50.0% Expanding <42.7% Contracting
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A Leading Indicator since: - Manufacturing must order materials in advance of production - The indicator is based on plans of supply management (purchasing) executives Source: Institute for Supply Management (ISM) ism.org (previously National Association of Purchasing Management)
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Irwin/McGraw-Hill
Project Management
Operations Strategy
Process Analysis
Job Design
Manufacturing
Facility Layout
Services
Waiting Line Analysis and Simulation
Inventory Control
Materials Requirement Planning
Operations Strategy
Strategy Process
Customer Needs
Example
More Product
Corporate Strategy
Operations Strategy
Competitive Dimensions
Speed Flexibility
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Cost
Flexibility Delivery
Quality
Competition (Them)
Stage II--Externally Neutral - achieve parity with competitors Stage III--Internally Supportive - support business strategy Stage IV--Externally Supportive manufacturing based competitive strategy
Irwin/McGraw-Hill
Irwin/McGraw-Hill
U. S. Competitiveness Drivers
Product Development
speed development & enhance manufacturability WIP, space, tool costs, and human effort
borrowed from Japanese Keiretsu strong, independent boards of directors
Improved Leadership
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Execution!!
Unless you translate big thoughts into concrete steps for action, theyre pointless. (Larry Bossidy) Strategy is execution. (Louis Gerstner) In the business world, having a good objective means nothing if you implement it badly. (Fareed Zakaria) You cannot have an execution culture without robust dialogue - one that brings reality to the surface through openness, candor, and informality. Robust dialogue starts when people go in with open minds. You cannot set realistic goals until youve debated the assumptions behind them.
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Productivity
Outputs Productivi ty = Inputs
Partial measures
output/(single input)
Multi-factor measures
output/(multiple inputs)
output/(total inputs)
Total measure
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Example
10,000 Units Produced
Example--Labor Productivity
10,000 units/500hrs = 20 units/hour ...
... or we can arrive at a unitless figure (10,000 unit*$10/unit)/(500hrs*$9/hr) = 22.22
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You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms. Is productivity increasing or decreasing?
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Balanced Scorecard
1. Financial perspective 2. Internal perspective
3. Customer perspective
4. Innovation and learning perspective
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