classification and purpose of production and operations management
DESCRIPTION
A discussion on the basics of Production and Operations management. This presentation covers POM's history, classification & purpose.TRANSCRIPT
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Topics Covered in this Report
• Operations Management– Definition– Brief History– Importance– Productivity, Competitiveness, & Strategy
• Manufacturing Systems– Features, Components & Types
• Production Systems– Features, Components & Types
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The planning, organizing, controlling, and directing, of
systems or processes that create goods and/or services.
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Organization of the Operations Function
Operations Marketing
Finance
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History of Operations Management
Pre Industrial Revolution• Public works or
projects for the government
• Pyramids of Egypt, Great Wall of China, Aqueducts of Rome, etc.
• Craft Production
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History of Operations Management
Industrial Revolution• 1770s in England• Replaced manpower
with machine power• Invention of machines
– Steam engine
• Standardization of gauges
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History of Operations Management
Scientific Management
• Focused on observation, measurement, analysis & improvement of work design
• Replaced craft production by mass production
• Low skilled workers replaced highly skilled workers
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History of Operations Management
Scientific Management• Management Pioneers
– Frederick Taylor
– Henry Gantt
– Harrington Emerson
– Henry Ford
Taylor Gantt
Ford
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Human Relations Movement
• Emphasized on the human factor in production
• Emergence of Motivational Theories by– Frederick Herzberg
– Douglas Mcgregor
– Abraham Maslow
History of Operations Management
Herzberg
Maslow Mcgregor
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History of Operations Management
Japanese Influences• Developed and refined
existing management practices
• Introduced the concept of quality, continual improvement, and time based management
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History of Operations Management
Recent Trends• Internet & Electronic
Business• Supply Chain
Management– Supply chain is a
sequence of activities and organizations involved in producing a good or a service
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Importance of Operations Management
1. Operations activity is the core of all business organizations
2. A large percentage of jobs are in the field of operations
3. All activities in the other areas of business are interrelated with operations management
4. Responsible for a large portion of the company’s assets
5. It has a major impact on quality & is the face of the company to its customers
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Productivity
• An index measure that measures output (goods & services) relative to input (labor, materials, energy, and other resources)
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Productivity Measures
• Single Operation
Productivity = Output Input
• Multifactor Measure
= Output
Labor+Capital+Materials
• Total Measure
= G&S Produced
All Resources Used
Examples:
= Yards of carpet installed
Labor hours worked
= 720 Square yards
4 workers x 8 hrs/worker
= 720 yards
32 hours
= 22.5 yards/hour
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Factors that Affect Productivity
• Capital• Methods• Quality• Technology• Management
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Steps to Improve Productivity
• Develop Productivity Measures• Look at the system as a whole and determine
which operations are critical• Develop methods for achieving productivity
improvements• Establish reasonable goals• Consider Incentives• Measure improvements & publicize them• Do not confuse productivity with efficiency
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Competitiveness
• How effectively an organization meets the needs of customers relative to others that offer similar goods or services
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Ways to remain competitive through Operations
1. Price
2. Quality
3. Product / Service Differentiation
4. Flexibility
5. Time
6. Service
7. Management & Workers
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Operational Strategy
• Strategy is a plan for achieving goals
• Organizational strategy provides for the overall direction for the organization. It is very broad and covers the entire organization
• Operations strategy deals only with the operations aspect of the organization
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Things to consider in Strategy Formulation
• External Scanning– Economic
Conditions
– Political Conditions
– Legal Environment
– Technology
– Competition
– Markets
• Internal Scanning– Human Resources– Facilities &
Equipment– Financial Resources– Customers– Products/Services– Technology– Suppliers– Others
1. External Factors
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Things to consider in Strategy Formulation
2. Distinctive Competency– Cost– Quality– Time– Flexibility– Customer service– Location
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Examples of Distinctive Competencies
Type Competency Company/Service
Price Low cost Motels, Thrift Shops
Quality High Performance
Consistent Quality
Five Star Hotels, Cadillac
Kodak, XeroxTime Rapid Delivery
On-time Delivery
Domino’s Pizza, UPS
FedExFlexibility Variety
Volume
Burger King, Emergency Rooms
Jollibee, SupermarketsLocation Convenience 711, Mercury Drug, Service Stations,
Banks/ATMs
Service Superior Customer Disneyland, IBM
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Manufacturing Systems
• A collection of all interrelated activities involved in producing goods
• Manufactured goods are tangible items that can be transferred from one place to another and can be stored for purchase by a consumer at a later date and time
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Components of a Manufacturing System
• Inputs & Outputs• Suppliers & Customers• Processes• Managers & Feedback
Suppliers CustomerInput OutputProcess
Manager
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Productive System Types
Continuous Flow: – Characterized by high
production volume and a high degree of product standardization
– Processes are highly specialized
– High degree of automation
– Little use for skilled work force
– Costs are generally low
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Productive System Types
Mass or Assembly line: – High production
volume
– Small variety of different products
– Labor skill requirements are low
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Productive System Types
Batch or Intermittent: – Used for producing small
lots of similar products
– Products are made in batches with short production runs
– Differs from mass production in the materials used, machine setups, & layout
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Productive System Types
Job Shop: – Produce a wide variety of
small quantity of specialized products
– Products are customized
– May be produced by different sequences of operations
– General purpose equipment is used
– Labor force must be highly skilled
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Productive System Types
Project: – One in which unique
and unusually large and complex items are produced
– Products are assembled at a fixed location
– Components and subassemblies must be brought to the location
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Service Systems
• A collection of all interrelated activities involved in producing services
• Non-manufactured goods are intangible items that cannot be transferred from one place to another and is usually consumed by the consumer at the point of sale
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Distinctive Features of Service Systems
• Customer Contact• Uniformity if Input• Labor content of jobs• Uniformity of Output• Labor content of jobs• Measurement of productivity• Simultaneous production and delivery• Quality assurance
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Service Strategy
• Identification of a target market
• Development of a service concept to address targeted customers’ needs
• Design of an operating strategy to support the service concept
• Design of a service delivery system to support the service concept
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