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Operations Management The field of management that specializes in the physical production of goods or services and uses quantitative techniques for solving manufacturing problems

The Organization as an Operations Management System Feedback Operations Strategy Operations Management Inputs Raw materials Human resources Land, buildings Information Technology Outputs Products Services Products and Facilities Product design Facilities layout Capacity planning Facilities location Structure Reporting relationships Teams Control Processes Inventory management Productivity Quality The Technical Core

Manufacturing and Service Organizations Source: Based on Richard L. Daft, Organization Theory and Design (Cincinnati, OH: South-Western College Publishing, 1998), 130; and Byron J. Finch and Richard L. Luebbe, Operations Management (Fort Worth, Texas: The Dryden Press, 1995), 50.

Operational Concerns for Manufacturing and Service Organizations Scheduling Must obtain materials and supplies Both must be concerned with quality and productivity

Stages of Operations Strategy No Involvement No positive contribution to strategy formulation Concerns: Cost Labor efficiency Stage 2 Industry Current Goals set according to industry practice Concerns: Capital investment Quality control Inventory management Capacity Stage 3 Organizationally Supportive Organization’s competitive strategy closely followed and supported Concerns: Advanced process technologies New plants What to make for the United States Stage 4 Initiates Competitive Advantage Advanced capabilities developed and significant input to strategic process provided Concerns: New products New services New technologies International Source: Based on R.H. Hayes and S.C. Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: Wiley, 1984).

Winning Customers How? Better price Quality Performance Delivery Responsiveness to customer demand

Design for Manufacturability and Assembly DFMA May require; Restructuring operations Creating teams of designers and manufacturers

Product Design Objectives Produce ability 1 Cost 2 Quality 3 Reliability 4

Service Design Objectives Produce ability 1 Cost 2 Quality 3 Reliability 4 TIMING 5

Layout Types Process Product Cellular Fixed-position

Revolutionizing Manufacturing Flexible Manufacturing Systems, the use of productions lines that can be adapted to produce more than one kind of product. CAD/CAM: CAD, computer aided design CAM, computer aided manufacturing

Inventory Management Finished goods inventory Work in process inventory Raw materials inventory

Techniques for Inventory Management Economic order quantity Material requirements planning JIT inventory systems Distribution management

Looking to Improve Productivity Technological productivity Worker productivity Managerial productivity The Baldrige Award, quality and productivity, achieving its goals.

MRP Dependent demand inventory planning and control system Schedules exact materials required Is computer based Based on precise estimates of future needs for production