Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART Understanding the Business of Managing
Copyright ©2003 Prentice Hall, Inc Chapter 7 Managing Operations and Improving Quality
Copyright ©2003 Prentice Hall, Inc “There are many ways of going forward, but only one way of standing still.” ~ Franklin D. Roosevelt
Copyright ©2003 Prentice Hall, Inc Key Topics Operations and the utility provided by operations processes Service operations vs. goods production Operations planning Total quality management tools The supply chain strategy vs. traditional strategies for coordinating operations
Copyright ©2003 Prentice Hall, Inc Defining Operations Service Operations: Produce tangible and intangible services. Goods Production: Produces tangible products.
Copyright ©2003 Prentice Hall, Inc Growth in the Goods and Services Sectors Millions of Workers Services Goods Production $4,000$3,000$2,000$1,000 (Billions) Services Goods Production
Copyright ©2003 Prentice Hall, Inc Integration of Global Operations Technology has pushed operations to become cleaner, faster, and safer…on a global scale The internet has integrated production with global suppliers and customers
Copyright ©2003 Prentice Hall, Inc Products and Services Create Utility Satisfy Human Wants Time Utility Place Utility Ownership utility Form Utility Operations managers create utility for customers through production, inventory, and quality control.
Copyright ©2003 Prentice Hall, Inc Operations Management A Resource Transformation Process InputsTransformation Activities Outputs land capital human resources material customers information Operations Managers plan organize schedule control
Copyright ©2003 Prentice Hall, Inc Operations Processes Are Methods Used in Production Goods-Manufacturing: Analytic processes Synthetic processes Service Delivery High contact processes Low contact processes
Copyright ©2003 Prentice Hall, Inc Service Operations Differ Markedly From Manufacturing Focus on: performance process and outcome service characteristics customer-service link service quality considerations
Copyright ©2003 Prentice Hall, Inc Layout Process Product Cellular Methods Quality Location Capacity Operations Planning
Copyright ©2003 Prentice Hall, Inc Operations Scheduling Scheduling Goods Operations Scheduling Service Operations
Copyright ©2003 Prentice Hall, Inc Operations Control Monitors Results, Which Ensures Performance Transportation Warehousing Purchasing Supplier Selection Inventory Control Materials managers plan, organize, and control the flow of materials from design through distribution
Copyright ©2003 Prentice Hall, Inc Tools for Operations Process Control Worker Training Just-in-time Production Systems (JIT) Material Requirements Planning Quality Control
Copyright ©2003 Prentice Hall, Inc Total Quality Management Always Delivering High Quality Planning for quality Organizing for quality Directing for quality Controlling for quality
Copyright ©2003 Prentice Hall, Inc Tools for Total Quality Management Statistical Process Control Quality/Cost Studies Getting Close to the Customer Process Reengineering
Copyright ©2003 Prentice Hall, Inc Adding Value Through Supply Chains ForesterFarmerCo-op Grain Storage Flour Miller Pulp Maker Paper Factory ConsumersDistributor GrainGrainFlourBakery Baking Company Rolls, bread Packager Packaged Baked Goods WoodPulpPaper Grocery Stores
Copyright ©2003 Prentice Hall, Inc The Supply Chain Strategy Supply Chain Management Working with the supply chain as a whole to improve overall flow Supply Chain Reengineering Improving the process for better results
Copyright ©2003 Prentice Hall, Inc Chapter Review Explain “operations” and the utility that operations processes provide. Distinguish service operations from goods production. Describe the five decision areas involved in operations planning. Identify the key tools for total quality management. Explain the supply chain strategy.