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Production Operations Production Operations ManagementManagement

Introduction to POMU. Akinc

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POMPOM Productivity

– What is it to POM?– What is it to a Company?– What does it Mean to You?

Production/ Operations Management– What?– Who?

Business Strategy and Operations Management

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ProductivityProductivity

Definition: Economic output per unit of inputProductivity = Output/Input (resource)

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US. Productivity TrendsUS. Productivity Trends

600% since 1900 2.6% between 1945 - 1973 1.2% between 1973 - 1980 1.0% between 1980 – 1990 2.5% after 1990

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Recent US Productivity ChangesRecent US Productivity ChangesSeries Id: PRS84006093 Duration: index, 1992 = 100 Measure: Output Per Hour Sector: Business

Year 1 2 3 4 Annual change 1993 100.3 100.1 100.2 101.2 100.5 0.50% 1994 101.6 101.7 101.4 102.1 101.7 1.19% 1995 101.8 102.1 102.2 103.1 102.3 0.59% 1996 104.2 105.3 105.3 105.7 105.1 2.74% 1997 106.1 107.1 108.1 108.3 107.4 2.19% 1998 109.6 109.6 110.2 111.5 110.2 2.61% 1999 112.3 112.1 113.1 114.7 113 2.54% 2000 114.8 116.6 116.8 117.5 116.5 3.10% 2001 117.4 117.8 118.8 121.3 118.8 1.97% 2002 123 .9 124.1 125 .9 126.4 125 .1 5.3 0% 2003 125.8 128.0 130.8 130.3 128.7 2.88% 2004 131.4 132.8 133.0 133.5 132.7 3.11% 2005 134.4 134.3 135.9 135.5 135.0 1.73% 2006 136.4 136.6 136.1 36.5 136.4 1.04% 2007 136.6 137.5

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Productivity TrendsProductivity Trends

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International ComparisonsInternational Comparisons

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International ComparisonsInternational Comparisons

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Pressures on Productivity:Pressures on Productivity:

Why Does Productivity Have to Grow? Aging Population

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Pressures on Productivity:Pressures on Productivity:

Why Does Productivity Have to Grow? Aging Population

Environmental Demands

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Pressures on Productivity:Pressures on Productivity:

Why Does Productivity Have to Grow? Aging Population

Environmental Demands

Global Competition

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Pressures on Productivity:Pressures on Productivity:

Why Does Productivity Have to Grow? Aging Population

Environmental Demands

Global Competition

Social Pressures

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Sources of productivity?Sources of productivity?

Where does productivity come from? Capital Technology Better Management of Resources: Specialization

Macro (Organizational) Micro

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Organizational GoalsOrganizational Goals

Why do organizations exist? An alliance of at least

– Labor– Management– Stockholders

Organizational Goals

Productive use of resources

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OperationsOperations

Activities that organizations perform to achieve their goals.

Definition:Activities aimed at bringing about goal

oriented changes by designing and using processes.

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ProcessesProcesses

Any set of activities that use resources, transform and add value to deliver one or more outputs to its customers.

Processes can be nested.. A process may include one or more sub processes

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Porter’s Value ChainPorter’s Value Chain

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Domain of POM (WHAT?)Domain of POM (WHAT?)

Determining the Desired Outputs Determining the Necessary Inputs Determining the Technology Necessary Planning and Controlling the

– quality– availability– cost of Work Processes and Their Results

Delivery and Distribution of the Output

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POM DecisionsPOM Decisions

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The Professionals (WHO?)The Professionals (WHO?)

V P -M a rk e tin g

P ro d u c tio nS ch ed u lin g

P u r ch a s in g S to ckC o n tro l

S h ip p in ga n d rece iv in g

M a ter ia lsM a n a g er

Q u a lityC o n tro l

M a n u fa ctu r in gM a n a g er

M a in ten a n ceE n g in eer

P erso n n e ll

P la n tM a n a g er (s )

V P -O p er a t io n s

V P -F in a n ce

C E O

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WHAT? DesignWHAT? DesignMany of the design functions are strategic Facilities design

– Locations– Sizes– Layouts– Equipment– Transportation means

Product/Product Line Management Systems

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WHAT? PlanningWHAT? PlanningDetermining the ways in which the

productive facility will be used

Demand Forecasting Production Planning Material Requirements Planning Inventory Planning Staffing Needs Equipment Needs

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WHAT? SchedulingWHAT? SchedulingDetermining the time and the resources with

which the tasks will be performed.Examples: Assignment of specific customer orders to

individual machines or individuals Assignment of workers to work centers Sequencing of work Vehicle Dispatching

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WHAT? ControlWHAT? ControlDetermining the degree of match between

actual and planned outcomesExamples:

Quality Control – Conformance– Design

Materials Control (Inventory Control) Equipment Control (Maintenance) Cost Control (Variance Analysis)