1. Process View & Strategy Part 4- Some OM Tools and Techniques

2. 2 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Processing Time, Waiting Time; Long Waiting Line

3. 3 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Recent Trends  Global Competition Global Market Global Suppliers  Supply Chain Management Not from RM storage to FG warehouse, but from the original suppliers to final consumers Under separate ownerships  Workers Involvement Workers are not costs, they are assets  Total Quality Management  Lean Manufacturing Inventory is waste Variability is evil

4. 4 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Inventory adversely affects all competing edges (P/Q/V/T)  Has cost Physical carrying costs Financial costs  Has risk of obsolescence Due to market changes Due to technology changes  Leads to poor quality Feed back loop is long  Hides problems Unreliable suppliers, machine breakdowns, long changeover times, too much scrap.  Causes long flow time Lean Operations: The Real Cost of Inventory Customer Product Wait Product

5. 5 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Centralization; inventory and Capacity Centralization of stocks reduces inventory. Centralization of Servers reduces waiting line. Why doesn’t everybody do it? – Longer response time – Higher shipping cost – Less understanding of customer needs – Less understanding of cultural, linguistics, and regulatory barriers These disadvantages my reduce the demand.

6. 6 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Pareto phenomenon (ABC analysis) Classifying items, activities, or tasks according to some measure of importance and allocating efforts and resources accordingly A vital few things are important for reaching an objective or solving a problem. 80/20 rule – 80% of the problems are caused by 20% of the activities. Recognition of Priorities.

7. 7 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Models -Representations A model is an abstraction of reality Narrative Tabular Schematic (Some times Physical) Mathematical  Linear programming  Transportation model  Inventory models  Waiting line models  Statistical models Count what is countable. Measure what is measurable. What is not measurable, make it measurable. Galileo Galilei, 1564 -1642.

8. 8 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Schematic Representation of the Process (Flow Charts) Raw Material Cook Finished Goods AssembleDeliver Customer places order Mc Donald's make-to-stock system (Prior to 1999).  Points where processing times are large.  Activities that contains material or capacity constraints.  Points where there is a high degree of resource sharing. When the same resource is required to process a variety of products.  Divergence points where common materials are transformed into different product streams.  Convergence points where multiple materials must come together.  Points of excessive variation.

9. 9 Ardavan Asef-Vaziri August, 2013Process View & Operations Strategy Value Stream Mapping  Points where processing times are large.  Activities that contains material or capacity constraints.  Points where there is a high degree of resource sharing. When the same resource is required to process a variety of products.  Divergence points where common materials are transformed into different product streams.  Convergence points where multiple materials must come together.  Points of excessive variation.