MANAG ING O PERAT IONS, QUAL ITY, AND PRODUCT IV IT Y

TEAM INTRODUCTION

• Muhammad Aamir 2013-ch-41• Fidda Hussain 2013-ch-91• Shahid Alam 2013-ch-97• Nabeel Ehmed 2013-ch-93• Mohammad Rizwan 2013-ch-71

OPERATIONS MANAGEMENT

The set of management activities used by an organization to transform resource inputs into products, services, or both.

IMPORTANCE OF OPERATIONS• Efficient and effective operations ensures:

– Competitiveness– Overall organizational performance– Maintains quality– Maintains productivity

CONT…

• Inefficient or ineffective operations:

operations management, on the other hand, will almost inevitably lead to poorer performance and lower levels of both quality and productivity.

WHAT DO YOU KNOW BY WORD MANUFACTURING ?

A form of business that combines and transforms resource inputs into tangible outcomes that are then sold to others.

EXAMPLES

• The Goodyear Tire & Rubber Company manufacturer : It combines rubber and chemical compounds and uses blending equipment and molding machines to create tires.

• Broyhill manufacturer: Buys wood and metal components, pads, and fabric and then combines them into furniture.

SERVICE ORGANIZATION

• A service organization is one that transforms resources into an intangible output and creates time or place utility for its customers.

EXAMPLES

• Merrill Lynch makes stock transactions for its customers

• Avis leases cars to its customers

THE ROLE OF OPERATIONS IN ORGANIZATIONAL STRATEGY• Operations management is very important to organizations• It direct impact on such factors• Competitiveness• Quality• Productivity• Directly influences the organization's overall level of effectiveness.

DETERMINING PRODUCT-SERVICE MIX• The “Product-Service Mix,” to determine how many and what kinds of products or

services (or both) to offer. • This decision flows from • corporate• Business• Marketing strategies• Managers have to make a number of decisions about their products and services

starting with how many and what kinds tooffer.

WHAT DOES THE CAPACITY DECISION INVOLVE?• It involves choosing the amount of products, services, or both that can be produced.• What are the next determining factors?• The type of facility required; where the physical location should be.• Capacity decision is truly a high-risk one because of1)The uncertainties of future product demand2) The large monetary stakes involved

FACILITIES DECISIONS

• Facilities are The physical locations where products or services are created, stored, and distributed• Location

is the physical positioning or geographic site of facilities and must be determined by the needs and requirements of the organization.

FACILITIES LAYOUTS

•LayoutPhysical configuration of facilities,

• the arrangement of equipment• within facilities, or both

TYPES OF LAYOUT• Product layout: Arranged around the product

• Process layout: Arranged around the process• Fixed position layout: Arranged around a single work area.• Cellular layout: Arranged around a single work area.

SAMPLE OF A FACILITY LAYOUT Product Layout

AllIncoming

JobMaterials

FinishedProduct

APPROACHES TO FACILITIES LAYOUT

ORGANIZATIONAL TECHNOLOGIES

• Technology as the set of processes and • systems used by organizations to convert• resources into products or services.

CONT.…

• Automation is the process of designing work so that it can be completely or almost completely performed by machines

• Computer-Assisted Manufacturing Relies on computers to design or manufacture products

• Robotics Artificial devise that can perform functions ordinarily thought to be appropriate for human beings.

A SIMPLE AUTOMATIC CONTROL MECHANISM

IMPACT OF AUTOMATION ON EMPLOYEES JOBS ?

• Is It True That Employees Lose Jobs Due to Automation?• YES but In the short term.• What is the truth about the impact of automation on employees?• In the long term more jobs are created, this is especially true for the electronics

industry, the rising demand for products has led to increasing employment.

SERVICE TECHNOLOGYFollowing are some examples of technology used in the service industry?• BankingNew technological breakthroughs led to automated teller machines • HotelsUse increasingly sophisticated technology to accept and record room reservations• Hospitals and other healthcare organizationsNew forms of service technology to manage patient records, dispatch ambulances and EMTs, and monitor patient vital signs

• Restaurantsto record and fill customer orders, order food and supplies, and prepare food

SUPPLY CHAIN MANAGEMENT• The process of managing operations control• Resource acquisition• Purchasing • Inventory • So as to improve overall efficiency and effectiveness.

WHAT DOES SUPPLY CHAIN MANAGEMENT INCLUDE?• The manufacturer • Suppliers• Transporter• Warehouses• Retailers• Customers• It include all functions

PURCHASING MANAGEMENT• Purchasing management, also called procurement And is concerned with buying the materials and resources needed to create products and services• What is a new approach to purchasing?-Many firms have changed their approaches to purchasing as a means to lower costs and improve quality and productivity - They Reducing the number of suppliers and negotiating special product-delivery arrangements.

INVENTORY MANAGEMENT

• Inventory control, also called materials controlis essential for effective operations management

• What are the 4 basic kinds of control?- Raw materials.- Work in process.- Finished goods.- Products in transit.

CONT..

JUST-IN-TIME (JIT) METHOD

• An inventory system that has necessary materials arriving as soon as they are needed (just in time) so that the production process is not interrupted

• Suppliers• Transporting• Transformation process• Completed for customers

TOTAL QUALITY MANAGEMENT

• Quality and productivity have become major determinants of business success or failure today

• achieving higher levels of quality is not an easy accomplishment• What is needed for TQM? The cooperation of all levels within the organization.

THE MEANING OF QUALITY• The American Society for Quality Control defines quality as the totality of

features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs

• Quality is also relative• Quality is relevant for both products and services

THE IMPORTANCE OF QUALITY

• Competition Quality has become one of the most competitive points in business today• Productivity Managers have also come to recognize that quality and productivity are related• Costs Improved quality also lowers costs. Poor quality results in higher returns from customers

ELEMENTS FOR TQM

• Strategic commitment.• Employee involvement.• Technology.• Materials.• Methods improvement

CONT...

TQM TOOLS AND TECHNIQUES

• Value-Added Analysis ? is the comprehensive evaluation of

• all work activities• materials flows• paperwork • What is importance? to determine the value that they add for customers

WHAT IS BENCHMARKING?

• The process of learning how other firms do things in an exceptionally high quality manner.

• What does benchmarking enable firms to do?–To stay abreast of improvements and changes its competitors are using.

OUTSOURCING

• Another innovation for imp-roving quality is outsourcing• is the process of subcontracting services and operations to other firms that

can perform them more cheaply or better

CONT’

• Reducing Cycle Time Another popular TQM technique is reducing cycle time• What does cycle time means? Cycle time is the time needed by the organization to develop, make, and distribute products or services.

MORE TQM TECHNIQUES:

• Speed:– The time needed to get something accomplished; it can be emphasized in

any area, including developing, making, and distributing products or services.• ISO 9000:

– A set of quality standards created by International Organization for Standards.

• SQC:– Statistical Quality Control, a set of specific statistical techniques used to

monitor quality

HOW WOULD YOU DEFINE PRODUCTIVITY?• Productivity

is an economic measure of efficiency that summarizes the value of outputs relative to the value of the inputs used to create them

LEVELS OF PRODUCTIVITY

• By level of productivity we mean the units of analysis used to calculate or define productivity.

• For example -aggregate productivity: productivity achieved by a country. -industry productivity: productivity achieved by all the firms in a particular industry -Company productivity: productivity achieved by an individual company

FORMS OF PRODUCTIVITY

• Total factor productivity is defined by the following formula: Productivity=Output/input

• Total factor productivityoverall indicator of how well an organization uses all of its resources, such as labor, capital, materials, and energy, to create all of its products and services.

Labor Productivity = Outputs/ Direct Labor

THE IMPORTANCE OF PRODUCTIVITY

• It determines the organization’s level of profitability.• It determines people’s standard of living within a

particular country.• Who has one of the highest level of productivity in the

world?–The U.S.

Manufacturing and Service Productivity Growth Trends (1970-2000)