Transcript 15.2 Single - Factor (One - Way) Analysis of Variance

Operations, Competitiveness
& Quality & Cost
&Flexibility& Speed
Respond
Roberta Russell
The Operations Function
• Operations as a transformation process
• Operations as a basic function
• Operations as the technical core
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Ch 1 - 2
Operations As A Transformation
Process
INPUT
Material
Machines
Labor
Management
Capital
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Transformation
process
Feedback
OUTPUT
Goods
or
Services
Ch 1 - 3
Transformation Processes
• Physical
(manufacturing)
• Locational
(transport/storage)
• Exchange
(retail)
• Physiological
(healthcare)
• Psychological
(entertainment)
• Informational
(communications)
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Ch 1 - 4
Operations As A Basic Function
OPERATIONS
MARKETING
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FINANCE
Ch 1 - 5
Operations As The Technical Core
Operations
Workers
Finance
Personnel
Purchasing
Suppliers
Capital Markets, Stockholders
Marketing
Customers
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Ch 1 - 6
Historical Events In Operations
Manegement (OM)
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Industrial Revolution
Scientific Management
Human Relations
Management Science
Quality Revolution
Information Age
Globalization
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Ch 1 - 7
Historical Events In POM
Industrial Revolution
Steam engine
Division of labor
Interchangeable parts
1769
1776
1790
James Watt
Adam Smith
Eli Whitney
Scientific Management
Principles
Time / motion study
Activity scheduling chart
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1911
1911
1912
Frederick W. Taylor
Frank & Lillian Gilbreth
Henry Gant
Ch 1 - 8
Human Relations
Hawthorne studies
Motivation theories
1930
1940s
1950s
1960s
Elton Mayo
Abraham Maslow
Frederick Hertzberg
Douglas McGregor
Management Science
Linear programming
Digital computer
Simulation, PERT/CPM,
Waiting line theory
MRP
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1947
1951
1960
George Dantzig
Remington Rand
Research groups
1960s Joseph Orlicky, IBM
Ch 1 - 9
Quality Revolution
JIT
TQM
Reengineering
1970s Taiichi Ohno, Toyota
1980s W. Edwards Deming,
Joseph Juran, et. al.
1990s Hammer, Champy
Information Age
EDI, EFT,
CIM
Internet, World Wide Web
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1970s Numerous
1980s
individuals and
1990s
companies
1990s Tim Berners-Lee
Ch 1 - 10
Globalization
Worldwide markets
and operations
Supply chain management
Electronic commerce
Mass customization
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1990s Numerous individuals
and companies
Ch 1 - 11
TGW (Things Gone Wrong) In
First Eight Months Per 100 Cars
Chrysler
GM
Ford
Japanese
Toyota
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285
256
214
132
55
Ch 1 - 12
Quality Of Semiconductors
Defective on delivery
U.S.
16%
Japan
0%
Failure after 1000 hrs
14%
1%
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Ch 1 - 13
Quality Of Room Air Conditioners
Fabrication defects
Assembly line defects
Service calls
Warranty cost
U.S.
4.4%
63.5%
10.5%
2.2%
Japan
<0.1%
0.9%
0.6%
0.6%
(% of sales)
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Ch 1 - 14
Quality Of Color TVs
Assembly defects
Service calls
U.S.
1.4
1.0
Japan
0.01
0.09
(per set)
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Ch 1 - 15
Globalization
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Take advantage of favorable costs
Gain access to foreign markets
Reduced trade barriers
Changing markets
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Ch 1 - 16
Hourly Wage Rates
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Ch 1 - 17
Growth in Volume of World Trade
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Ch 1 - 18
Impact of Trade Agreements
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Ch 1 - 19
Risks In Globalization
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Weak infrastructure
Distinct languages, customs, trade barriers
Inefficient distribution channels
Instability of governments
Poor economic conditions
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Ch 1 - 20
Competitiveness
The degree to which a nation, can, under
demanding and rapidly changing market
conditions, produce goods and services that
meet the test of international markets while
simultaneously maintaining or expanding the
real incomes of its citizens.
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Ch 1 - 21
Measures Of Competitiveness
• Gross domestic product (GDP)
• Import/export ratio
• Productivity = output / input
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Ch 1 - 22
Productivity Increases When
Firms
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Become more efficient
Downsize
Expand
Retrench
Achieve breakthroughs
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Ch 1 - 23
Productivity In The ‘90s
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Ch 1 - 24
Changes In Input and Output
..
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Ch 1 - 25
Competitive Industries
• Relatively equal in size and resources
• Standardized products and services
• Slow or exponential growth
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Ch 1 - 26
Measuring Competitiveness
• Number of major players
• Average market share
• Average profit margin
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Ch 1 - 27
Barriers To Entry
• Economies of scale
• Capital investment
• Access to supply and distribution
channels
• Learning curves
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Ch 1 - 28
Issues & Trends In Operations
1. Intense competition
2. Global markets, global sourcing,
and global financing
3. Importance of strategy
4. Product variety and mass customization
5. More services
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Ch 1 - 29
Issues & Trends In Operations
6. Emphasis on quality
7. Flexibility
8. Advances in technology
9. Worker involvement
10. Environmental and ethical concerns
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Ch 1 - 30
Primary Topics In Operations
Management
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Deploying strategy
Assuring quality
Designing products & services
Planning the production process
Laying out the facility
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Ch 1 - 31
Primary Topics In Operations
Management
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Designing jobs & work
Managing the supply chain
Forecasting demand for products & services
Production planning & scheduling
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Ch 1 - 32
Organization Of Book
Strategy of productive systems
Designing productive systems
Operating Productive systems
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Ch 1 - 33
Strategy Of Productive Systems
–1. Introduction to Operations & competitiveness
–2. Operations strategy
–3. Quality management
–4. Statistical quality control
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60
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10
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0
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1
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6
7
Ch 1 - 34
Designing Productive Systems
–5. Product & service design
–6. Process planning, analysis and reengineering
–7. Facility layout
–8. Human resources in operations management
–9. Supply chain management
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Ch 1 - 35
Operating Productive Systems
–10. Forecasting
–11. Capacity planning & aggregate production
planning
–12. Inventory management
–13. Materials requirements planning
–14. Scheduling
–15. Just-in-time systems
–16. Waiting line models for service improvement
–17. Project management
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Ch 1 - 36
Strategy Formulation
1. Define primary task
2. Assess core competency
3. Determine order winners & order
qualifiers
4. Position the firm
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Ch 2 - 2
Competing On Cost
• Eliminate all waste
• Invest in
–updated facilities & equipment
–streamlining operations
–training & development
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Ch 2 - 3
Competing On Quality
Please the customer
–Understand customer attitudes toward and
expectations of quality
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Ch 2 - 4
Competing On Flexibility
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Produce wide variety of products
Introduce new products
Modify existing products quickly
Respond to customer needs
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Ch 2 - 5
Competing On Speed
• Fast moves
• Fast adaptations
• Tight linkages
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Ch 2 - 6
Process-Centered Strategies
• Processes cut across functional lines and
departments
• Strategy is led by competencies
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Ch 2 - 7
Changing Focus from Function to
Process
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Ch 2 - 8
Exploiting Core Competencies
• Enhance value a competency provides to
customers
• Transform internal competence into salable item
• Apply competencies to new products & services
• Create new ways of working & finding markets
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Ch 2 - 9
Policy Deployment
• Focuses employees on common goals &
priorities
• Translates strategy into measurable objectives
• Aligns day-to-day decisions with strategic plan
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Ch 2 - 10
Strategic Planning
Mission &
Vision
Voice of the
Business
Marketing
Strategy
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Business
Strategy
Operations
Strategy
Voice of the
Customer
Financial
Strategy
Ch 2 - 11
Derivation of an Action Plan
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Ch 2 - 12
Operations Role In
Corporate Strategy
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Provide support for overall strategy of a firm
Serve as firm’s distinctive competence
Must be consistent
Must be consistent with overall strategy
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Ch 2 - 13
Operations Strategy
Products
Capacity
Facilities
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Services
Human
Resources
Sourcing
Processes
and
Technology
Quality
Operating
Systems
Ch 2 - 14
Products & Services
• Make-to-order
–made to customer specifications after order
received
• Make-to-stock
–made in anticipation of demand
• Assemble-to-order
–add options according to customer specification
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Ch 2 - 15
Processes & Technology
• Project
–one-time production of product to customer order
• Batch production
–process many jobs at same time in batch
• Mass production
–produce large volumes of standard product for mass market
• Continuous processes
–very high volume commodity product
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Ch 2 - 16
Product-Process Matrix
Continuous
production
High
Volume
Mass
production
Batch
production
Projects
Low
Low
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Standardization
High
Ch 2 - 17
Product-Process Matrix
Service
Factory
Labor Intensity
High
Low
Mass
Service
Service
Shop
Professional
Service
Low
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Customization
High
Ch 2 - 17
Capacity & Facilities
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How much capacity to provide
Size of capacity changes
Handling excess demand
Hiring/firing workers
Need for new facilities
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Ch 2 - 19
Facilities
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Best size for facility?
Large or small facilities
Facility focus
Facility location
Global facility
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Ch 2 - 20
Human Resources
• Skill levels required
• Degree of autonomy
• Policies
• Profit sharing
• Individual or team work
• Supervision methods
• Levels of management
• Training
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Ch 2 - 21
Quality
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Target level
Measurement
Employee involvement
Training
Systems needed to ensure quality
Maintaining quality awareness
Evaluating quality efforts
Determining customer perceptions
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Ch 2 - 22
Sourcing
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Degree of vertical integration
Supplier selection
Supplier relationship
Supplier quality
Supplier cooperation
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Ch 2 - 23
Operating Systems
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Execute strategy daily
Information technology support
Effective planning & control systems
Alignment of inventory levels, scheduling
priorities, & reward systems
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Ch 2 - 24
Purpose Of Text
• Gain an appreciation of the strategic importance
of operations and how operations can provide a
competitive advantage in the marketplace
• Understand the relationship between operations
and other business functions
• Develop a working knowledge of the concepts
and methods related to designing and managing
operations