Exploring Business 2.0 © 2012 Flat World Knowledge Chapter 11: Operations Management in Manufacturing and Service Industries Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Chapter Objectives Define operations management, and discuss the role of the operations manager in a manufacturing company. Describe the decisions made in planning the production process in a manufacturing company. Describe four major types of facility layouts: process, product, cellular, and fixed position. Identify the activities undertaken by the operations manager in overseeing the production process in a manufacturing company. Explain how to create and use both PERT and Gantt charts. Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Chapter Objectives Explain how manufacturing companies use technology to produce and deliver goods in an efficient, cost-effective manner. List the characteristics that distinguish service operations from manufacturing operations. Describe the decisions made in planning the product delivery process in a service company. Identify the activities undertaken to manage operations in a service organization. Explain how manufacturing and service companies alike use total quality management and outsourcing to provide value to customers. Exploring Business 2.0 © 2012 Flat World Knowledge

Operations Management “…consists of all activities involved in transforming a product idea into a finished product, as well as those involved in planning and controlling the systems that produce goods and services.” Exploring Business 2.0 © 2012 Flat World Knowledge

The Transformation Process Exploring Business 2.0 © 2012 Flat World Knowledge

Operations Management: Manufacturing “…manufacturers…perform the same basic function: to transform resources into finished goods.” Operations Management: Production Planning Production Control Quality Control Exploring Business 2.0 © 2012 Flat World Knowledge

Planning: Production Method Decisions Make-To-Order Mass Production Mass Customization Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Facilities Decisions Site Selection Close to suppliers, customers, or both Supply of skilled workers Quality of life Resource costs Business climate Capacity Planning Layout Planning Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Facility Layout “…how equipment, machinery, and people will be arranged to make the production process...efficient...” Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Process Layout Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Product Layout Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Cellular Layout Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Materials Management “…encompass(es)... activities: purchasing, inventory control, and work scheduling.” Exploring Business 2.0 © 2012 Flat World Knowledge

Purchasing And Supplier Selection E-Purchasing Electronic Data Interchange Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Inventory Control Just-In-Time Material Requirements Planning Manufacturing Resource Planning Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Work Scheduling Master Production Schedule Gantt Charts PERT Charts Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Gantt Chart Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge PERT Chart Exploring Business 2.0 © 2012 Flat World Knowledge

Technology Of Goods Production Computer-Aided Design Computer-Aided Manufacturing Computer- Integrated Manufacturing Flexible Manufacturing Systems Exploring Business 2.0 © 2012 Flat World Knowledge

Differences Between Manufacturers and Service Providers Intangibility Customization Customer Contact Operational Efficiency...Important (to both) Exploring Business 2.0 © 2012 Flat World Knowledge

Service Provider Decisions What services/goods to offer? How to provide services? Where to locate business and what will it look like? How to forecast demand for services? Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Operations Planning Operations Processes Make-To-Order Make-To-Stock Facilities Site Selection Size/Layout Capacity Planning Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Managing Operations Scheduling Inventory Control Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Quality “…the characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” Exploring Business 2.0 © 2012 Flat World Knowledge

Quality Management Or Assurance- TQM Customer Satisfaction Employee Involvement Continuous Improvement Statistical Process Control Benchmarking International Quality Standards ISO 9000 ISO 14000 Exploring Business 2.0 © 2012 Flat World Knowledge

Outsourcing “…having outside vendors manufacture the actual product.” Exploring Business 2.0 © 2012 Flat World Knowledge

Exploring Business 2.0 © 2012 Flat World Knowledge Outsourcing Manufacturing Service Exploring Business 2.0 © 2012 Flat World Knowledge