Transcript Operations Management & Planning

Operations Management
& Planning
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Role of the Operations Manager

Managers that are responsible for the activities involved in producing the goods
& services for a company

Their activities include the following:

Choosing a process for producing the company’s goods or services
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Selecting a production site

Laying out the production facility
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Design production workers’ jobs
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Planning day-to-day production operations
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Controlling costs
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Monitoring inventories
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Operating systems & activities
 Operating system – consists of the processes
and activities needed to produce goods or
services.

Made up of people, materials, facilities, and
information.

These inputs are combined to produce the
company’s goods or services.
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Types of operating systems
 Continuous-flow systems
 Operating systems that function all the time regardless
of customer orders
 McDonald’s makes a certain # of products based on
sales history & hopes people will buy them
 Intermittent-flow systems
 Operating systems that operate only when an order
needs to be filled
 Taco Bell does not produce anything until a customer
places an order
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Continuous-Flow Systems
 Used to produce standardized products that a
business keeps in stock
 Companies ship products to customers and store the
remainder as inventory
 Most large manufacturing companies use a
continuous-flow system.
 Allows them to keep their assembly line running all
the time
 Achieve maximum efficiency & high profits
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Intermittent-Flow Systems
 Used to produce customized products & services
 No finished-goods inventory because all products are
immediately shipped to the customers who ordered
them.
 Most service companies use this type of system
 These kinds of businesses operate only in response
to specific requests by customers
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Computer technology for Operations
Management
 In many industries, computers have revolutionized
the way businesses produce their products
 Four Processes
1. Computer-Aided Design
2. Computer-Aided Engineering
3. Computer-Aided Manufacturing
4. Computer-Integrated Manufacturing
Help businesses streamline their operations.
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Computer-Aided Design
 Designing products with the help of computers
 Helps companies create better products because it
allows them to try various product designs without
actually manufacturing the product
 Computer simulation helps businesses identify
defects or problems at the design stage before they
spend millions of dollars on production
 CAD significantly reduced the time it takes
companies to design new products
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Computer-Aided Engineering
 Using computers to engineer products
 Used to analyze the performance of a product
under different conditions
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Computer-Aided Manufacturing
 Computers are used to actually produce the products they make
 Computers provide instructions to automated production
equipment, such as robots
 To use CAM, businesses collect and store data on how a
process should be performed
 The computer then programs equipment to perform particular
tasks
 Many of the tasks once performed by workers are now done by
robots
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Computer-Integrated Manufacturing
 Using computers to integrate all manufacturing operations into a
single, smoothly operating manufacturing system
 Every aspect of manufacturing a product is aided by computers,
including
 Conception
 Design & development
 Production
 Marketing
 Product support
Businesses use CIM because it lowers manufacturing costs &
reduces production time. CIM also improves product quality
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Process Selection
 Selection of an operating system
 Involves a wide range of decisions about the
specific processes to use, the sequences in
which to perform the processes, and the
equipment to use
 All operating processes require equipment.
Managers must make decisions about
purchasing or leasing equipment
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Factors to consider in
selecting equipment
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Availability of production workers able to operate equipment
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Training required to be able to operate equipment
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Availability of parts & services
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Availability of supplier assistance in installation and debugging
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Compatibility of equipment with existing equipment
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Maintenance record
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Flexibility of equipment in handling changes to product
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Safety
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Expected delivery date
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Warranty coverage
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Price
Choosing equipment for a company can be a difficult process.
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Site Selection
 Process of selecting a location for a business
 Entrepreneurs may come up with excellent
ideas for a business but locate the business
in the wrong place.
 Choosing a location that meets the needs of
a business is a very important management
decision
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Factors to consider in choosing a site
 Labor costs (most impt)
 Availability of materials,
supplies, & workers
 Cost of land
 Cost of plant construction
 Location of competitors
 Location of customers
 Transportation costs
 Cost of materials
 Strength of labor unions
 Community attitudes
 Political situation
 Laws
 Climate
 Living conditions
 Taxes
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 When a company outgrows its facilities, managers
face three options for obtaining more space. They
can:
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Expand the site
Move the entire operation to another site
Add another facility elsewhere
Many businesses first try to expand their current facilities
in order to avoid the expense of moving or the
inconvenience of operating more than one facility
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Facilities Layout
 Process of planning the physical arrangement
of a facility
 Includes identifying where office space,
meeting rooms, customer service areas,
eating areas, production areas, equipment,
storage space, bathrooms, hallways, and
other areas will be located
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Materials handling
 Network that receives, stores, & moves materials between processing
points within a factory
 Managers must closely coordinate the design & layout of their facilities
with the design of the materials-handling system
 Many factors, including the size, shape, weight, density, and flexibility
of materials, affect a facility’s layout.
 Some materials require special handling and storage
 In designing the facilities layout, computer manufacturers must take
these special factors into account
 Operations managers also need to consider the equipment that will be
needed to transport products. Ex. Companies that use forklifts must
create wide aisles to accommodate them.
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Types of layouts
 Product layout - Groups equipment & staff based on
the various steps involved in producing a product.
Such layouts are often set up as assembly lines. This
layout is efficient
 Process layout – groups together equipment and staff
that perform similar functions
 Fixed-position layout - product is too large to move
and remains in one place. This layout is inefficient
 The kind of layout a business chooses depends on
the type of product or service it products
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Job design
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Describes the work an individual or group of individuals is supposed
to perform
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Job designs can be described in terms of five key characteristics
1.
Skill variety – refers to skills a worker needs to perform a job
2.
Task identity – refers to the degree to which a job allows a worker to
complete an entire task rather than just part of the task
3.
Task significance- refers to the level of impact a job has on the whole
organization
4.
Autonomy- refers to the independence workers have to make
decisions about how to perform their jobs
5.
Feedback – involves the extent to which managers let workers know
how they are performing
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Importance of Job Design
 The Core Job Characteristics on the previous
slide lead to the following work outcomes:
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High level of work motivation
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High quality work performance
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High satisfaction with work
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Low absenteeism and turnover
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Physical work environment
 To attract and retain good workers, managers
need to provide a satisfactory and pleasant
physical work environment
 Poor work environments may prevent
employees from working efficiently
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Ex. Too hot or cold, poorly ventilated, noisy,
poorly lit, or crowded
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Day-to-Day Operations Planning
 Managers need to carefully plan day-to-day
operations to ensure that production
proceeds smoothly and that costs are low
 Production planning involves three
components:
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Aggregate production planning
Resource allocation
Activity scheduling
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Aggregate production planning
 Uses an organization’s resources to produce
enough goods or services to meet demand
 Rely on company forecasts to make decisions
about production planning
 The number of workers & supplies needed
can be estimated based on these forecasts
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Resource allocation
 Allocation of people, materials, & equipment
to meet the operating system requirements
 Allocating these resources efficiently will keep
company costs low while producing quality
goods
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Activity scheduling
 Creating a detailed production timetable.
 Involves loading (assigning a job to a factory
or department) and dispatching (scheduling
of each task that is performed in the factory).
 Scheduling increases efficiency & ensures
that all workers understand their role in the
production process
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