Professional Documents
Culture Documents
NOTES
NOTES
Operations Management
-affects:
Value-Added Process
1. Government
2. Wholesale/ Retail
3. Financial Services
4. Healthcare
5. Personal Services
Value Added 6. Business Services
7. Education
-difference between the cost of inputs and the value or
price of outputs
Key Differences
Product Packages 1. Customer Contract
2. Uniformity of Input
-combination of goods and services
3. Labor Content of Jobs
-can make a company more competitive 4. Uniformity of Output
5. Measurement of Productivity
6. Production and Delivery
Goods-Service Continuum 7. Quality Assurance
8. Amount of Inventory
9. Evaluation of Work
10. Ability to Patent Design
Good VS Service Over 18 million workers in manufacturing
jobs
Accounts for over 70% of value of U.S.
exports
Average full-time compensation about 20%
higher than average of all workers
Manufacturing workers more likely to have
benefits
Productivity growth in manufacturing in the
last 5 years is more than double U.S.
economy
More than half of the total R&D performed is
in the manufacturing industries
Manufacturing workers in California earn an
Scope of Operations Management average of about $25,000 more a year than
service workers
1. Forecasting
When a California manufacturing job is lost,
2. Capacity Planning
an average of 2.5 service jobs is lost
3. Scheduling
4. Managing Inventories
5. Assuring Quality
6. Motivating Employees Challenges of Managing Services
7. Deciding where to locate facilities
Service jobs are often less structured than
8. Supply chain management\
manufacturing jobs
9. And More
Customer contact is higher
Worker skill levels are lower
Services hire many low-skill, entry-level workers
Types of Operations Employee turnover is higher
1. Goods Producing Input variability is higher
-Farming, mining, construction, Service performance can be affected by
manufacturing, power generation worker’s personal factors
2. Storage/ Transportation
- Warehousing, trucking, mail service,
moving, taxis, buses, hotels, airlines Operations Management Decision Making
3. Exchange
- Retailing, wholesaling, banking, 1. Models
renting, leasing, library, loans 2. Quantitative Approaches
4. Entertainment 3. Analysis of Trade-Offs
- Films, radio and television, concerts, 4. Systems Approach
recording 5. Establishing Priorities
5. Communication 6. Ethics
-Newspapers, radio and television
newscasts, telephone, satellites
Key Decisions of Operations Managers
1. What (resources/amounts)
Decline in Manufacturing Jobs
2. When (needed/scheduled/ordered)
Productivity 3. Where (work to be done)
4. How (designed)
-increasing productivity allows companies to 5. Who (to do work)
maintain or increase their output using fewer
workers
Outsourcing
-some manufacturing work has been outsourced
to more productive companies
Decision Making
Why Manufacturing matters
1. System Design - “the whole is greater than the sum of the parts”
-capacity, location, arrangement of
departments, product and service -Sub-optimization: can also arise from a focus on
planning, acquisition and placement of optimizing a unit of a business rather than the results of
equipment the entire business
2. System Operation
-personnel, inventory, scheduling,
project management, quality assurance Pareto Phenomenon
1. Financial Statements
2. Worker Safety
Benefits of Models (Why Beneficial) 3. Product Safety
4. Quality
1. Easy to use, less expensive
5. Environment
2. Require users to organize
6. Community
3. Increase understanding of the problem
7. Hiring/ Firing workers
4. Enable “what if” questions
8. Closing Facilities
5. Consistent tool for evaluation and standardized
9. Worker’s rights
format
6. Power of mathematics
Quantitative Approaches
Operations Interfaces
Linear programming
Queuing Techniques
Inventory models
Project models
Statistical models
Analysis of Trade-Off
1. Quality
Trends in Business 2. Productivity
3. Cost
Major Trends:
2. MidwayUSA
- Catalog and Internet retailer offering
“Just About Everything (SM)” for
shooters, reloaders, gunsmiths, and
hunters.
Other Important Trends - Vision: “To be the best-run business in
America for the benefit of our
1. Ethical behavior Customers.”
2. Operations strategy - Focus on customers has yielded
3. Working with fewer resources impressive results.
4. Revenue management
5. Process analysis and improvement
6. Increased regulation and product liability
7. Lean production
1. Ancient History
- Zhou Dynasty in China
2. The Age of Craftsmanship
- Skilled workers during the Middle Ages
- Industrial Revolution
Manufacturing Systems
Quality in Finished Goods Inspection and Testing
Quality in Services
Satisfying Customers
Competitive Advantage - To meet or exceed customer expectations,
Quality supports the following characteristics: organizations must fully understand all product and
service attributes that contribute to customer value and
1. Is driven by customer wants and needs lead to satisfaction and loyalty
2. Makes significant contribution to business
success Meeting specifications, reducing defects and
3. Matches organization’s unique resources with errors, and resolving complaints.
opportunities Designing new products that truly delight the
4. Is durable and lasting customer
5. Provides basis for further improvement Responding rapidly to changing consumer and
6. Provides direction and motivation market demands
Developing new ways of enhancing customer
relationships
Quality and Profitability
2. K&N Management
- Vision “to become world famous by
delighting one guest at a time.”
- Builds and maintains a focus on “guest
delight,” relying on innovation and
technology to create product offerings
that meet or exceed guest requirements.
- All leaders carry a personal digital
assistant (PDA) that alerts them of guest
Identifying Customers Key Product Quality Dimensions
Gap Model
Affinity Diagram
Perceived Quality: comparison of actual quality to
expected quality
Moments of Truth -Of the customers who make a complaint, more than half
will again do business with that organization if their
-where customer satisfaction or dissatisfaction takes complaint is resolved. If the customer feels that the
place complaint was resolved quickly, the figure jumps to 95
-every interaction between a customer and organization percent
-measurable performance levels or expectations that Complaint Management Process at Cargill Corn
define the quality of customer contact with an Milling
organization
1. Customer-supplier partnerships
- long-term relationships characterized by
teamwork and mutual confidence
2. Customer-focused technology
- Customer Relationship Management
(CRM) software -includes market
segmentation and analysis, customer
service and relationship building,
effective complaint resolution, cross-
selling goods and services, order
processing, and field service
1. Overall satisfaction
Designing Satisfaction Surveys
2. Likelihood of a first-time purchaser to
1. Identify Purpose repurchase
2. Identify the Customer 3. Likelihood to recommend
3. Determine who should conduct the survey 4. Likelihood to continue purchasing the same
4. Select the appropriate survey instrument products or services
5. Design questions and Response Scales to 5. Likelihood to purchase different products or
achieve Actionable Results services
6. Likelihood to increase frequency of purchasing
Responses: tied directly to key business processes, so 7. Likelihood to switch to a different provider
that what needs to be improved is clear; and information
can be translated into cost/revenue implications to
support the setting of improvement priorities
Net Promoter Score (NPS)
Personnel performing work affecting product 1. Veterans Affairs Cooperative Studies Program
quality shall be competent on the basis of (VACSP) Clinical Research Pharmacy
appropriate education, training, skills, and Coordinating Center (the Center)
experience. - a federal government organization that
Organizations should determine the level of supports clinical trials targeting current
competence that employees need, provide health issues for America’s veterans.
training or other means to ensure competency, - sees engagement as the single most
evaluate the effectiveness of training or other important criterion for workforce
actions taken, ensure that employees are aware satisfaction
of how their work contributes to quality - Excellence in the workplace, superior
objectives, and maintain appropriate records of customer service, and personal
education, training, and experience. involvement in organizational
The standards address the work environment improvement are rewarded through the
from the standpoint of providing buildings, Center’s performance management
workspace, utilities, equipment, and supporting system with visible, tangible benefits
services needed to achieve conformity to
product requirements, as well as determining
and managing the work environment, including 2. PRO-TEC Coating Company
safety, ergonomics, and environmental factors. - joint venture between United States
Steel Corporation and Kobe Steel Ltd. of
Japan, providing coated sheet steel High-performance work - work approaches used to
primarily to the U.S. automotive industry. systematically pursue ever-higher levels of overall
- Culture centered around three organizational and human performance
fundamental concepts—ownership,
responsibility, and accountability.
- Associates work in self-directed teams
and are empowered, innovative leaders
who fix problems as they are identified.
Work Design
Employee Involvement (EI) -how employees are organized in formal and informal
-Any activity by which employees participate in work- units, such as departments and teams
related decisions and improvement activities, with the
objectives of tapping the creative energies of all
employees and improving their motivation Job Design
Motivation
1. employee motivation
2. growth satisfaction
3. overall job satisfaction
4. work effectiveness
Empowerment
Teams
Types:
1. Management teams
2. Natural work teams
3. Self-managed teams
4. Virtual teams Life Cycle of Teams
5. Quality circles
6. Problem solving teams 1. Forming
7. Project teams - takes place when the team is
introduced, meets together, and
Examples (Baptist Hospital, Inc.) explores issues of their new assignment.
2. Storming
- occurs when team members disagree
on team roles and challenge the way
that the team will function.
3. Norming
- takes place when the issues of the
previous stage have been worked out,
and team members agree on roles,
ground rules, and acceptable behavior
when doing the work of the team.
4. Performing
- characterizes the productive phase of
the life cycle when team members
cooperate to solve problems and Compensation and Recognition
complete the goals of their assigned
-all aspects of pay and reward, including promotions,
work.
bonuses, and recognition, either monetary and
5. Adjourning
nonmonetary or individual and group
- phase in which the team wraps up the
project, satisfactorily completes its
goals, and prepares to disband or move
on to another project
1. Engaged employees
- work with passion and feel a profound
connection to their company
- drive innovation and move the
organization forward.
2. Not-engaged employees
- essentially “checked out.”
- sleepwalking through their workday
- putting in time, but not enough energy or
passion into their work
Assessing Workforce Effectiveness, Satisfaction,
and Engagement
1. Outcome Measures
3. Actively disengaged employees
-number of teams, rate of growth, percentage of - aren’t just unhappy at work
employees involved, number of suggestions - busy acting out their unhappiness
implemented, time taken to respond to suggestions, - undermine what their engaged
employee turnover, absenteeism, and grievances; coworkers accomplish every day
perceptions of teamwork and management
effectiveness, engagement, satisfaction, and
empowerment Sustaining High-Performance Work Systems
2. Process Measures -Regular assessment of:
-number of suggestions that employees make, numbers 1. workforce capability and capacity needs;
of participants in project teams, participation in 2. hiring, training and retention of employees; and
educational programs, average time it takes to complete 3. career progression and succession planning
a process improvement project, whether teams are
getting better, smarter, and faster at performing
improvements, improvements in team selection and
planning processes, frequency of use of quality Workforce Capability
improvement tools, employee understanding of problem- -an organization’s ability to accomplish its work
solving approaches, and senior management processes through the knowledge, skills, abilities, and
involvement competencies of its people
-Factors:
Effective Hiring Practices
1. what is expected in one’s work
1. Determine key employee skills and
competencies
2. Identify job candidates based on required skills
and competencies
3. Screen job candidates to predict suitability and
match to jobs
Succession Planning
Process Requirements
Value Creation Processes for Pal’s Sudden Service Developing Process Maps
Preventing Mistakes
Based on:
Design for Agility
1. Prediction: recognizing that a defect is about to
Agility
occur and providing a warning
- flexibility and short cycle times 2. Detection: recognizing that a defect has
occurred and stopping the process
- is crucial to such customer-focused strategies as mass
customization Examples:
1. a standard or goal,
Types of Service Errors 2. a means of measuring accomplishment,
3. comparison of results with the standard to
1. Task Errors provide feedback, and
- include doing work incorrectly, work not 4. the ability to make corrections as appropriate.
requested, work on the wrong order, or
working too slowly
2. Treatment errors Processes and Control Measures (City of Coral Springs)
- in the contact between the server and
the customer, such as lack of courteous
behavior, and failure to acknowledge,
listen, or react appropriately to the
customer.
3. Tangible errors
- such as unclean facilities, dirty uniforms,
inappropriate temperature, and
document errors
4. Customer errors in preparation
- such as the failure to bring necessary
materials to the encounter, to
understand their role in the service
transaction, and to engage the correct
service.
-
Control and Improvement
5. Customer errors during an encounter
- such as inattention, misunderstanding, -Control should be the basis for organizational learning
or simply a memory lapse, and include and lead to improvement and prevention of defects and
failure to remember steps in the process errors
or to follow instructions.
6. Customer errors at the resolution stage of a -After-action review:
service encounter
What was supposed to happen?
- include failure to signal service
inadequacies, to learn from experience, What actually happened?
to adjust expectations, and to execute Why was there a difference?
appropriate post-encounter actions. What can we learn?
Control: the activity of ensuring conformance to - Control is usually applied to incoming materials, key
requirements and taking corrective action when processes, and final products and services.
necessary to correct problems and maintain stable -Effective quality control systems include:
performance
documented procedures for all key processes;
a clear understanding of the appropriate
equipment and working environment;
methods for monitoring and controlling critical
quality characteristics; approval processes for
equipment;
criteria for workmanship, such as written
standards, samples, or illustrations; and
maintenance activities.
Kaizen Blitz
-an intense and rapid improvement process in which a
team or a department throws all its resources into an
improvement project over a short time period, as
opposed to traditional kaizen applications, which are Managing Supply Chain Processes
performed on a part-time basis. Suppliers: include not only companies that provide
-Blitz teams: generally comprised of employees from all materials and components, but also distributors,
areas involved in the process who understand it and can transportation companies, and information, health care,
implement changes on the spot and education providers
Reengineering
1. Why do we do it?
2. Why is it done this way?