Transcript EM 420 Production and Operations Management

EM 420
Production and Operations
Management
Eng. Rodger L. NKUMBWA
Dept. of Electrical Engineering
Copperbelt University
http://www.nkumbwa.weebly.com/
What is Operations Management?
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OM is the design, operation, and improvement of the
systems that create and deliver primary products and
services.
It is a field of management, and should not to be
confused with operations research, management
science, or industrial engineering.
OM is concerned with the management of the entire
system.
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Decisions fit into three broad areas:
Strategic (long term)
Tactical (intermediate term)
Operational (short term)
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Why Study Operations Management?
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Definitions
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Automation is a technology concerned with the
application of mechanical, electronic, and computerbased systems to reduce the amount of clerical and
manual effort in product design, manufacturing planning
and control, and the business functions of the firm.
Computer-aided design (CAD) is the use of computer
systems to support the product design functions.
Computer-aided manufacturing (CAM) is the use of
computer systems to perform functions related to
manufacturing engineering.
CAD/CAM is the integration of CAD and CAM into one.
Computer-integrated manufacturing (CIM) combines
CAD/CAM with other business functions.
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Definitions (2)
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Flexible Manufacturing System (FMS) is an
automated, mid-volume, mid-verity, central computercontrolled manufacturing system
Supply chain management is the term used to
describe the management of materials and information
across the entire supply chain, from suppliers to
component producers to final assemblers to distributors
and ultimately to the customers.
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Total Quality Management (TQM) is management approach
that pursues three main objectives:
achieving customer satisfaction,
continuous improvement, and
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encouraging involvement of the entire workforce.
What are Business Functions?
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Business functions are the principal means
of communication with the customer.
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These functions include:
Design
Marketing
Sales
Forecasting
Cost accounting
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What is a Production System?
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A production system uses resources to transform inputs
into desired outputs.
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Examples of transformation processes:
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Inputs: raw materials, parts, and customers
Resources: labour, equipment, and supplies
Outputs: goods, services, and satisfied customers
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Physical – manufacturing
Locational – transportation
Exchange – retailing
Storage – warehousing
Physiological – health care
Informational – telecommunications
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Goods versus Services
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Services are intangible processes
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Goods are physical outputs of a process
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Location of the service facility and customer interaction
are important
Location of the service facility and customer interaction
are not important
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Value-Added Services
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Value-added services are qualities of a product or
service that make a customer’s life easier.
Commonly grouped into four categories:
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Provide two benefits:
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Information
Problem solving
Sales support
Field support
Differentiate the organization from the competition.
Build relationships with customers.
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OM in the Organization Chart
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Importance of Operations Management
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Synergies need to exist with other functional areas of
the organization.
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Sharing between customer service processes, purchasing,
distribution, manufacturing, etc.
Operations account for 60-80% of the direct expenses
that burden a firm’s profit.
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Product Design
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Product design involves both determinations of which
products are to be produced and the detailed design of
individual products.
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The product design process involves:
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Identification of need (some deficiency in machine design, adding
more features to existing products, developing new product).
Generation of preliminary ideas with respect to technical choices,
materials, etc.
Refinement of the product idea.
Analysis of best designs from point of view of cost, functional
requirements, manufacturability, etc.
Selection of the best design.
Creation of a detailed design that provides detailed specifications with
respect to materials, tolerance, etc.
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Manufacturing Planning
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Process planning
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Master scheduling
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ensures that all required material and parts are available when
needed.
Capacity planning
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a listing of the products to be made, when they are to be
delivered, and in what quantities.
Requirements planning
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determining the sequence of individual processing and assembly
operations needed to produce the product.
ensures that the factory is capable of producing what is required
by its given number of machines and manpower.
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Manufacturing Control
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Concerned with managing and controlling physical
operations to implement manufacturing plans.
Shop floor control
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Inventory control
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is concerned with striking a balance between having too little
inventory (with possible material stock-outs) and the carrying
costs of too much inventory.
Quality control
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deals with the problem of monitoring the progress of the
product as it is being processed, assembled, moved, and
inspected.
ensures that the quality of the product meets the standards
specified by the product design (and customer
expectations.
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Business Strategies and Product Life Cycle
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Introduction
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Acceptance and growth
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Production innovation
Cost control
Decline
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Forecasting
Manufacturing capacity
Maturity
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Research and product development
Process modification
Supplier development
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Reduction and phase-out
Transition to new products
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Product Life Cycle
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Business Strategies and Product Life Cycles 2..
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First-to-market
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Second-to-market
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Imitate successful outputs offered by first-to-market organizations.
Learn from their mistakes and offer improved or enhanced versions of
the original products.
Late-to-market (or cost minimization)
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Strong applied research is needed.
Set high prices to achieve large short term-profits (focus only on the
introduction and acceptance phases and then license production), or
set a lower initial price to secure a high market share.
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Wait until a product becomes fairly standardized and is demanded in
large volume.
Attempt to compete on the basis of costs.
Strong production systems research is needed.
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Significant Operations Management Concepts
Just-in-time
(JIT) Production
Total Quality Control (TQC)
Manufacturing Strategy
Total Quality Management (TQM) and
Quality Certification
Business Process Reengineering
Supply Chain Management
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Current Issues in Operations Management
 Coordinate
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the relationships between mutually
supportive but separate organizations.
 Optimizing global supplier, production, and
distribution networks.
 Increased co-production of goods and services.
 Managing the customers experience during the
service encounter.
 Raising the awareness of operations as a
significant competitive weapon. Eng Nkumbwa @CBU
Trends in Business
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Recent Trends
 Internet and e-business
 Supply chain management
Continuing Trends
 Quality and process improvement
 Technology integration
 Globalization
 Environmental issues
 Time-based competition
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Strategic Management Issues
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Strategic Management Thinking
The Strategic Management Process
Customer Analysis
Competitor Analysis
Strategy Formulation
Execution of Manufacturing strategy
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Wrap up…
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“Plans are nothing, planning is everything.”
Dwight D. Eisenhower
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