REVIEWER IN OPERATIONS Organization Barriers
MANAGEMENT -refusal or reluctance to share information
(Preliminary Term)
WEEK 1
Operations Management
-Science and art of ensuring that goods and
services are created and delivered successfully to
customers
-The design, operation, and control of the
transformation process that converts such resources
as labor and raw materials into goods and services
Includes:
-Design of goods, services, and the processes that
create them
-Day-to-day management of processes
-Continual improvement of goods, services, and
processes
Importance:
-Encompasses both services and manufacturing
-Effectively and efficiently managing productivity
-Plays a strategic role in an organization‟s
competitive success
Manufacturing and Services
Manufacturing Organization
-Uses OM in the transformation process of turning
raw materials into physical goods
Service Organization
-Uses OM in creating non-physical outputs in the
form of services (employees interacting with
customers)
Managing Productivity
Productivity
-overall output of goods or services produced
divided by the inputs needed to generate that output
-composite of people and operations variable
Benefits of Increased Productivity
-economic growth and development
-higher wages and profits without inflation
-increased competitive capability due to lower costs
Value
-performance characteristics, features, attributes and
any other aspects of goods and services for which
customers are willing to give up resources (spend
money)
Value Chain
-entire series of organizational work activities that
add value at each step beginning with the
processing of raw materials and ending with the
finished products in the hand of end users.
Value Chain Management
-Process of managing the entire sequence of
integrated activities and information about product
flows along the entire value chain.
Goals of Value Chain Management:
-to create a value chain strategy that fully integrates
all members into a seamless chain that meets and
exceeds customer‟s need and creates the highest
value for the customer.
Requirements for Value Chain Management:
A new business model incorporating
-coordination and collaboration
-investment in information technology
-changes in organizational processes
-committed leadership
-flexible jobs and adaptable, capable employees
-supportive organizational culture and attitudes
Obstacle to Value Chain Management:
-reluctance to shake up the status quo
-security issues
Cultural Attitudes
-lack of trust and too much trust
-fear of loss of decision-making power
Required Capabilities
-lacking or failing to develop the requisite value
management skills
People
-lacking commitment to do whatever it takes
-refusing to be flexible in meeting the demands of a
changing situation
-not being motivated to perform at a high level
-lack of trained managers to lead value chain
initiatives
Technology’s Role in Manufacturing
Increased automated and integration of production
facilities with business systems to control cost
-predictive maintenance, remote diagnostics, and
utility cost savings
Quality
-the ability of a product or service to reliably do
what it‟s supposed to do and to satisfy customer
expectations
How is Quality achieved?
-planning for quality
-organizing and leading for quality
-controlling for quality
Quality Goals
-ISO900 Certification and Six Sigma Standards
Mass Customization
-A design-to-order concept that provides consumers
with a product when, where, and how they want it.
-Makes heavy use of technology in developing
flexible manufacturing techniques and engaging in
continual dialogue with customers.
Benefits of Mass Customization:
-creates an important relationship between the firm
and the customer in providing loyalty-building
value to the customer and in garnering valuable
market information for the firm.
Value Analysis: An Applied Concept for
Manufacturing and Service Industry
-All organizations strive to create value for their
customers. This value creates mind space for
product and services.
-Value analysis, therefore, is a scientific method to
increase this value. Value is a perception hence
every customer will have their own perceptions on
how they define value.
-However, overall at the highest level, value is
quality, performance, style, and design relative to
product cost. Increasing value necessarily does not
mean decrease in all-inclusive cost of production
but providing something extra for which a premium
can be charged.
The objective and benefits of value analysis can
be summarized as below:
• Value analysis aims to simplify products and
process. There by increasing efficiency in
managing projects, resolve problems, encourage
innovation and improve communication across
organization.
• Value analysis enables people to contribute in the
value addition process by continuous focus on
product design and services.
• Value analysis provides a structure through cost
saving initiatives, risk reduction and continuous
improvement.
Activities for Value Analysis
1. Product/Service - The 1st step is to identify the
product or service which is based on usage/demand,
complexity in development and future potential.
2. Cost Analysis: The next step understands in
detail cost structure in developing and
manufacturing the product.
3. Define product and function: The next step is to
define all the primary function of the product
and service through satisfying the basic need
and then taking next step in delighting the
customer. For this better understanding of product
components and characteristics is required.
4. Evaluation of alternatives: Through
brainstorming possible alternatives can short listed
which can provide value to the primary function
of the product. Cost evaluation at high level
needs to be done for all the alternatives, and the
cheapest alternative is short listed.
5. Secondary Function evaluation: Secondary
functions of the product and services are studied
and evaluated.
6. Recommendation: Value Analysis done has
to communicate to the various level of the
management team as to get acceptance.
Value Analysis Team
-The process of value analysis is carried out by
value analysis team. So it becomes paramount that
team selection for value analysis also follows a
structured process. Value analysis team consists of
trained and qualified team members who have
background and knowledge about the project.
Team leader is selected by the project manager.
Team size for value analysis is 5 to 8.
Value Analysis Process
-Value analysis process can be divided into
three phases of mainly pre-analysis, analysis and
post analysis.
-Pre-analysis contains activities of project selection
and team selection.
-Analysis phase as the name suggests consists of
activities like investigation, speculation, evaluation,
development and presentation of the report.
-Post-analysis consists of activities‟
implementation of the report and regular audit.
Functional Analysis part of Value Analysis
-Function analysis is required to transform the
project elements from design of product towards
function of product. The main categories are
Basic, Secondary, Required Secondary Aesthetic,
Unwanted, Higher Order and Assumed.
WEEK 2
A Sustainable Operations and Supply Chain
Strategy
-Strategy should describe how a firm intends to
create and sustain value for its current
shareholders. By adding sustainability to the
concept, we add the requirement to meet these
current needs without compromising the ability of
future generations to meet their own needs.
-Shareholder and Stockholder
Social
-This pertains to fair and beneficial business
practices toward labor, the community, and the
region in which a firm conducts its business.
Economic
-The firm is obligated to compensate shareholders
who provide capital through stock purchases and
other financial instruments via a competitive return
on investments.
Environmental
-This refers to the firm's impact on the environment.
The company should protect the environment as
much as possible or at least cause no harm.
Operations and Supply Chain Strategy
-is concerned with setting broad policies and
plans for using the resources of a firm and
must be integrated with corporate strategy
-can be viewed as part of a planning process that
coordinates operations goals with those of the
larger organizations.
Planning Strategy
-is a process just like making a product or
delivering a service. The process involves a set of
activities that are repeated at different intervals over
time.
Cost or Price:
“Make the Product or Deliver the Service
Inexpensively”
Quality:
“Make a Great Product or Deliver a Great Service”
Delivery Speed:
“Make the Product or Deliver the Service Quickly”
Delivery Reliability:
“Deliver It When Promised”
Coping with Changes in Demand:
“Changes its Volume”
Flexibility and New-Product Introduction Speed:
“Change It”
Other Product-Specific Criteria:
“Support It”–Technical Liaison and support
Meeting a launch date
-Supplier after-sale support
-Environment Impact
-Other Dimensions
Order Winner
-is a criterion that differentiates the products or
services of one firm from those of another.
Depending on the situation, the order-winning
criterion may be the cost of the product (price),
price quality and reliability, or any of the other
dimensions developed earlier.
Order Qualifier
-is a screening criterion that permits a firm's
products to even be considered as possible
candidates for purchases. Oxford Professor Terry
Hill states that a firm must “re-qualify the order
qualifiers” every day it is business.
Strategies Are Implemented Using Operations
And Supply Chain Activities-Ikea's Strategy
●All the activities that make up a firm's
operation relate to one another. To make these
activities efficient, the firm must minimize its total
cost without compromising customers' needs.
Supply Chain Risk
-the likelihood of a disruption that would impact
the ability of the company to continuously
supply products or services. Operations and supply
chain strategies must consider the risk in their
supply chains and develop initiatives to cope
with these disruptions and mitigate their impact
on the business.
-Supply chain coordination risks that are associated
with the day-to-day management of the supply
chain which are normally dealt with using safe
stock, safety lead time, overtime etc.
-Disruption risks, which are cause by natural or
man-made disasters, such as earthquakes,
hurricanes, and terrorism.
Risk Management Framework
-Identify the sources of potential disruptions.
-Assessing a type of vulnerability is the first step in
the risk management framework. These are highly
situation dependent, but the focus should be on
highly unlikely events that would cause significant
disruption to normal operations.
-Assess the potential impact of the risk.
-Develop plans to mitigate the risk.
-Risk mapping involves assessment of the
probability or relative frequency of an event against
the aggregate severity of the loss.
-Depending on the evaluation, some risks might be
deemed acceptable and the related costs considered
a normal cost of doing business.
-Hewlett-Packard employs a matrix that maps
risks against specific operation and supply chain
strategies. The matrix helps to understand the
impact of different types of supply chain
disruptions when using specific operations and
supply chain strategies.
Productivity
-is a common measure of how well a country,
industry, or business unit is using its resources (or
factors of production). Since operations and supply
chain management focuses on making the best
use of the resources available to a firm,
productivity measurement is fundamental to
understanding operations-related performance.
-In its broadest sense, productivity is defined as
Productivity/Inputs = Outputs
-To increase productivity, we want to make this
ratio of outputs to inputs as large as practical.
-Productivity is what we call a relative measure.
-In other words, to be meaningful, it needs to be
compared with something else.
WEEK 3
Technology and Operations Management
-In last decade or so technology has changed the
way organization conduct their business. Advent of
technology in operation management has increased
productivity of the organization.
-The scope of Technology and operation
management has evolved over a period of time and
has moved from development of products into
design, management and improvement of operating
system and processes.
-Integration of Technology with Production System
Technology drives efficiency in organization and
increases‟ productivity of the organization.
-However, bringing technology in the production
system is highly complex process, and it needs to
following steps:
Technology Acquisition:
-technology acquired should align with overall
objectives of the organization and should be
approved after elaborate cost-benefit analysis.
Technology Integration:
-technology affects all aspects of production i.e.
capital, labor and customer. Therefore, a solid
technology integration plan is required.
Technology Verification:
-once technology integrated, it is important to check
whether technology is delivering operational
effectiveness and is been used to its fullest.
Technology in Manufacturing and Design
-Technology is getting extensively used in
customization of design products and services. The
usage of computers and supporting electronic
systems is integral part of modern industrial and
services industry. Current techniques can be
broadly classified into following categories:
Computer-Aided Design (CAD):
-CAD facilitates linking of two more complex
components of design at very high level of accuracy
thus delivering higher productivity.
Computer-Aided Manufacturing System (CAM):
-Precision is very essential in operating any
machines and therefore, Computerized Numerically
Controlled machines are used, thus ensuring highest
level of accuracy.
Standard for the Exchange of Product Data:
-As the name suggests product design is
transmitted among CAM and CAM in three
dimensions. Standard for The Exchange of Product
Data process sharing of product across all phases of
product life cycle and serves as neutral file
exchange.
Software Systems in Manufacturing
-There are various software systems available to
integrated operations and manufacturing functions
with other business functions of organization.
-Some of the common software systems are
Enterprise Resource Planning (ERP), Supply-
Chain Management (SCM), New-Product
Development (NPD) and Customer Relationship
Management (CRM). Enterprises Resources
Planning (ERP)
-links all business functions like manufacturing,
marketing, human resource and finance through
a common software platform. The main benefits
of the ERP solution are that it not only reduces
database errors but also delivers value to customer
through faster delivery and order fulfillment.
Automation in Production and Operations
-Automation reduces manual intervention in the
manufacturing process. It increases productivity
and reduces margin of error thereby facilitating
economies of scale. There are this-advantages of
automation also, such as unemployment, high
breakdown cost and initial capital investment.
Therefore, automation may not be suitable in all
situations and in the end alignment with an overall
organization objective is important.
Challenges
-can be facilitating factor in bringing about
change in operations and production
management. But it may not be feasible to use
technology in all aspects with challenge coming
through high initial cost of investment, high cost
of maintenance and mismanagement.
WEEK 4 6. Robust design
Design of Goods and Services Issues for Product Development
Product Decision Robust design
-The good or service the organization provides -Product is designed so that small variations in
society production or assembly do not adversely affect the
-Top organizations typically focus on core products product
-Customers buy satisfaction, not just a physical -Typically results in lower cost and higher quality
good or particular service Modular design
-Fundamental to an organization's strategy with -Products designed in easily segmented components
implications throughout the operations function -Adds flexibility to both production and marketing
Product Strategy Options -Improved ability to satisfy customer requirements
-Differentiation Computer-aided design (CAD)
Shouldice Hospital -Using computers to design products and design
-Low cost products and prepare engineering prepare
Taco Bell engineering documentation
-Rapid response -Shorter development cycles, improved cycles,
Toyota improved accuracy, lower cost accuracy
New Product Opportunities -Information and designs can be designs can be
1. Understanding the Understanding the customer deployed worldwide
2. Economic change Extensions of CAD
3. Sociological and Sociological and demographic -Design for Manufacturing and Assembly (DFMA)
change (DFMA)
4. Technological change Solve manufacturing problems during the
5. Political/legal change design stage
6. Market practice, professional standards, 3-D Object Modeling
suppliers, distributors Small prototype development
Quality Function CAD through the internet
Deployment -International data exchange through STEP
-Identify customer wants Computer-aided manufacturing (CAM)
Identify how the good/service will satisfy -Utilizing specialized computers and program to
Identify how the good/service will satisfy customer control manufacturing equipment
wants -Often driven by the CAD system (CAD/CAM)
Relate customer wants to product how Benefits
Identify relationships between the firm‟s Product quality
hows 2. Shorter design time
Develop importance ratings 3. Production cost reductions
Evaluate competing products 4. Database availability
Compare performance to desirable technical 5. New range of capabilities
attributes Virtual reality technology
House of Quality Sequence - used to develop an interactive, 3-D model of a
-Deploying resources through the organization in product from the basic CAD data
response to organization in response to customer -Allows people to „see‟ the finished design before a
requirements physical model is built
Organizing for Product Development -Very effective in large-scale designs such as plant
Historically layout
-distinct departments Value analysis
-Duties and responsibilities are defined -Focuses on design improvement during production
-Difficult to foster forward thinking -Seeks improvements leading either to a better
A Champion product or a product which can be produced more
-Product manager drives the product through the economically
product development through the product Environmentally friendly design
development system and related organizations -It is possible to enhance productivity, drive down
system costs, and preserve resources
Team approach -Effective at any stage of the product life cycle
Cross functional -Design
-Representatives from all disciplines or functions -Production
-Product development teams, design for -Destruction
manufacturability teams, value engineering teams The Ethical Approach
Japanese “whole organization” approach -View product design from a systems perspective
-No organizational divisions
Manufacturability and Value Engineering
Benefits: sider the entire life cycle of the product
1. Reduced complexity of products Goals
2. Additional standardization of products -Develop safe and more environmentally sound
3. Improved functional aspects of product products.
4. Improved job design and job safety -Minimize waste of raw materials and energy.
5. Improved maintainability (serviceability) -Reduce environmental liabilities
-Increase cost-effectiveness of complying with -Reduced raw material and purchases
environmental regulations -Simplified production planning and control
-Be recognized as a good corporate citizen -Improved layout, routing, and machine loading
Guidelines -Reduced tooling setup time, work-in-process, and
-Make products recyclable production time
-Use recycled materials Documents for Production
-Use less harmful ingredients Assembly drawing
-Use lighter components -Shows exploded view of product
-Use less energy -Details relative locations to show how to assemble
-Use less material the product
Legal and Industry Standards Assembly chart
For Design -Identifies the point of production where of
-Federal Drug Administration production where components flow into
-Consumer Products Safety Commission subassemblies and ultimately into the final product
-National Highway Safety Administration Route sheet
-Children‟s Product Safety Act -Lists the operations and times required to produce
For Manufacture/Assembly a component
-Occupational Safety and Health Administration Work order
-Environmental Protection Agency -instructions to produce a given quantity of a
-Professional ergonomic standards particular item, usually to a schedule
-State and local laws dealing with employment Engineering change notices (ECNs)
standards, discrimination, etc. -A correction or modification to a product‟s
For Disassembly/Disposal definition or documentation
-Vehicle Recycling Partnership -Engineering drawings
-Increasingly rigid laws worldwide -Bill of material
Time-Based Competition -Quite common with long product life cycles, long
-Product life cycles are becoming shorter and the manufacturing lead times, or rapidly changing
rate of technological change is increasing technologies
-Developing new products faster can result in a Configuration Management
competitive advantage -The need to manage ECNs has led to the
Acquiring Technology development of configuration management systems
-By Purchasing a Firm -A product‟s planned and changing components are
Speeds development accurately identified and control and accountability
Issues concern the fit between the acquired for change are identified and maintained
organization and product and the host Product Life Cycle Management
Through Joint Ventures -Integrated software that brings together most, if not
Both organizations learn all, elements of together most, if not all, elements of
Risks are shared Product design and manufacture
Through Alliances Product design
Cooperative agreements between CAD/CAM, DFMACAD/CAM, DFMA
independent organizations Product routing
Defining the Product Materials
-First definition is in terms of functions Assembly
-Rigorous specifications are developed during the Environmental
design phase Service Design
-Manufactured products will have an engineering -Service typically includes direct interaction with
drawing the customer
-Bill of material (BOM) lists the components of a -Increased opportunity for customization
product -Reduced productivity
Product Documents -Cost and quality are still determined at the design
Engineering drawing stage
-Shows dimensions, tolerances, and Shows -Delay customization
dimensions, tolerances, and materials -Modularization
-Shows codes for Group Technology -Reduce customer interaction, often through
-Bill of Material automation
-Lists components, quantities and Lists components, Documents for Service
quantities and where used -High levels of customer interaction necessitates
-Shows product structure different documentation
Group Technology -Often explicit job instructions for moments-of-
-Parts grouped into families with similar truth
characteristics -Scripts and storyboards are other techniques
-Coding system describes processing and physical Application of Decision Trees to Product Design
characteristics -Particularly useful when there are a series of
-Part families can be produced in dedicated decisions and outcomes which lead to other
manufacturing cells decisions and outcomes
Benefits
-Improved design
Procedures: these circumstances, process thus develop is
-Include all possible alternatives and states of nature discontinued.
-including “doing states of nature Production Process
-including “doing nothing” -Based on the nature of product and service
-Enter payoffs at end of branch production or conversion process can be divided
-Determine the expected value of each branch and into two broad categories, continuous production
“prune” the tree to find branch and the alternative (assembly line, oil refinery) and intermittent
with the best expected the alternative with the best production (job work, service).
expected value Process Design
Transition to Production -A successful process design has to take into
-Know when to move to production account the appropriateness of the process to overall
-Product development can be viewed as Product organization objective. Process design requires a
development can be viewed as evolutionary and broad view of the whole organization and should
never complete not have a myopic outlook. And the process should
-Product must move from design to Product must deliver customer value with constant involvement
move from design to production in a timely manner of the management at various stages.
-Most products have a trial production Most Conclusion:
products have a trial production period to insure -In order to achieve a good process design,
producibility effective process strategy is required, which
-Develop tooling, quality control, and training deals with a singular line items required to
-Ensures successful production manufacture the end product. Effective process
-Responsibility must also transition as the strategy deals with raw material procurement,
-Responsibility must also transition as the product customer participation, technology investment, etc.
moves through its life cycle
-Line management takes over from design
-Three common approaches to managing transition
-Project managers
-Product development teams
-Integrate product development and manufacturing
organizations Your progress does not need to be seen or
validated by others to be real. Good luck sa
WEEK 5 Prelim Exams! Padayon!
Process Selections, Designs and Analysis ~Czaaapppeee<3
-The objective of organization is to provide service
and product, which satisfy customer and create
value for them. A product and service designed is
based on the customer feedback and requirement of
the market. Process design is where the product is
broken down into parts, which further can be
helpful in the actual manufacturing process.
Process Planning
Process Requirement:
-The very 1st step is to collect and gather
information to give structure with the end
objective. That is to make process requirement
document highlighting various stages, risk and
stakeholders for production. This will include
assessment of available technology, raw material
requirement, factory/plant layout and demand
forecast.
Team Building:
-Once the process requirements are finalized, for
each objective, a team is finalized based on skill
level and experience. Function of the team is to get
familiarize with the whole process.
Planning and Implementation:
-Process planning team will develop module;
policies and procedure require for production,
which are after required approval internal as well as
external is implemented.
Audit:
-A regular audit is carried out to ensure that process
thus implemented is in line and delivering value to
customers.
End of Life:
-Over a course of time there may be enhancement
of the product or product may get discontinued in