Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J What Operations Managers Do Plan - Organize - Staff - Lead - Control

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Ten Critical Decisions  Service, product design……………..  Quality management…………………  Process, capacity design…………..  Location …………….…………………  Layout design ………………………..  Human resources, job design……..  Supply-chain management…………  Inventory management …………….  Scheduling ……………………………  Maintenance …………………………. Ch. 5 Ch. 6, 6S Ch. 7, 7S Ch. 8 Ch. 9 Ch. 10, 10S Ch. 11,11s Ch. 12, 14, 16 Ch. 3, 13, 15 Ch. 17

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Critical Decisions  Quality management  Who is responsible for quality?  How do we define quality?  Service and product design  What product or service should we offer?  How should we design these products and services?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Critical Decisions - Continued  Process and capacity design  What processes will these products require and in what order?  What equipment and technology is necessary for these processes?  Location  Where should we put the facility  On what criteria should we base this location decision?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Critical Decisions - Continued  Layout design  How should we arrange the facility?  How large a facility is required?  Human resources and job design  How do we provide a reasonable work environment?  How much can we expect our employees to produce?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Critical Decisions - Continued  Supply chain management  Should we make or buy this item?  Who are our good suppliers and how many should we have?  Inventory, material requirements planning,  How much inventory of each item should we have?  When do we re-order?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Critical Decisions - Continued  Intermediate, short term, and project scheduling  Is subcontracting production a good idea?  Are we better off keeping people on the payroll during slowdowns?  Maintenance  Who is responsible for maintenance?  When do we do maintenance?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Management Design of Goods and Services Chapter 5

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J As Engineering designed it. © T/Maker Co. As Operations made it. © T/Maker Co. As Marketing interpreted it. © T/Maker Co. As the customer wanted it. © T/Maker Co. Humor in Product Design

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Need-satisfying offering of an organization  Example  P&G does not sell laundry detergent  P&G sells the benefit of clean clothes  Customers buy satisfaction, not parts  May be a good or a service What is a Product?

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Strategy Options  Product differentiation  Low cost  Rapid response

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle  Introduction  Growth  Maturity  Decline

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle Introduction  Fine tuning  research  product development  process modification and enhancement  supplier development

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle Growth  Product design begins to stabilize  Effective forecasting of capacity becomes necessary  Adding or enhancing capacity may be necessary

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle Maturity  Competitors now established  High volume production may be needed  Improved cost control, reduction in options

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle Decline  Unless product makes a special contribution, must plan to terminate offering

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Life Cycle, Sales, Cost, and Profit Sales, Cost & Profit. IntroductionMaturityDeclineGrowth Cost of Development & Manufacture Sales Revenue Time Cash flow Loss Profit

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Percent of Sales From New Product

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product-by-Value Analysis  Lists products in descending order of their individual dollar contribution to the firm.  Helps management evaluate alternative strategies.

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Development Stages  Idea generation  Assessment of firm’s ability to carry out  Customer Requirements  Functional Specification  Product Specifications  Design Review  Test Market  Introduction to Market  Evaluation Scope of product development team Scope of design for manufacturability and value engineering teams

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Quality Function Deployment  Identify customer wants  Identify how the good/service will satisfy customer wants  Relate customer wants to product hows  Identify relationships between the firm’s hows  Develop importance ratings  Evaluate competing products

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J QFD House of Quaoity

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J You’ve been assigned temporarily to a QFD team. The goal of the team is to develop a new camera design. Build a House of Quality. © T/Maker Co. House of Quality Example

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship   Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship  Medium relationship  Low Relationship Target Values Light weight Easy to use Reliable What the customer desires (‘wall’) Aluminum Parts Auto Focus Auto Exposure Customer Requirements Customer Importance

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship   Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure Average customer importance rating

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure      Relationship between customer attributes & engineering characteristics (‘rooms’)

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure      Target values for engineering characteristics (‘basement’); key output

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J House of Quality Example High relationship   Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure     

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Organizing for Product Development  Historically – distinct departments  Duties and responsibilities are defined  Difficult to foster forward thinking  Today – team approach  Representatives from all disciplines or functions  Concurrent engineering – cross functional team

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Manufacturability and Value Engineering  Benefits:  reduced complexity of products  additional standardization of products  improved functional aspects of product  improved job design and job safety  improved maintainability of the product  robust design

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Cost Reduction of a Bracket via Value Engineering

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Issues for Product Development  Robust design  Time-based competition  Modular design  Computer-aided design  Value analysis  Environmentally friendly design

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Robust Design  Product is designed so that small variations in production or assembly do not adversely affect the product

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Modular Design  Products designed in easily segmented components.  Adds flexibility to both production and marketing

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Designing products at a computer terminal or work station  Design engineer develops rough sketch of product  Uses computer to draw product  Often used with CAM © 1995 Corel Corp. Computer Aided Design (CAD)

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Shorter design time  Database availability  New capabilities  Example: Focus more on product ideas  Improved product quality  Reduced production costs Benefits of CAD/CAM

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Design for Manufacturing and Assembly (DFMA)  3-D Object Modeling  CAD/CAM – CAD info is translated into machine control instructions (CAM) © 1995 Corel Corp. Extensions of CAD

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Virtual Reality  Computer technology used to develop an interactive, 3-D model of a product.  Especially helpful in design of layouts (factory, store, home, office)

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Value Analysis  Focuses on design improvement during production  Seeks improvements leading either to a better product or a product which can be more economically produced.

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Environmentally Friendly Designs  Benefits  Safe and environmentally sound products  Minimum raw material and energy waste  Product differentiation  Environmental liability reduction  Cost-effective compliance with environmental regulations  Recognition as good corporate citizen

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J “Green” Manufacturing  Make products recyclable  Use recycled materials  Use less harmful ingredients  Use lighter components  Use less energy  Use less material

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Time-based Competition  Product life cycles are becoming shorter.  Faster developers of new products gain on slower developers and obtain a competitive advantage

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Product Development Continuum External Development Strategies Alliances Joint Ventures Purchase Technology or Expertise by Acquiring the Developer Internal Development Strategies Migrations of Existing Products Enhancement to Existing Products New Internally Developed Products Internal  Cost of Product Development  Shared Lengthy  Speed of Product Development  Rapid and/or Existing High  Risk of Product Development  Shared

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Engineering drawing  Shows dimensions, tolerances, & materials  Shows codes for Group Technology  Bill of Material  Lists components, quantities & where used  Shows product structure © T/Maker Co. Product Documents

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Monterey Jack (a) U.S. grade AA. Monterey cheese shall conform to the following requirements: (1)Flavor. Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavor. (2)Body and texture. A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes (3)Color. Shall have a natural, uniform, bright and attractive appearance. (4)Finish and appearance - bandaged and paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese Code of Federal Regulation, Parts 53 to 109,. Revised as of Jan. 1, 1985, General Service Administration

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Engineering Drawing Example

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Engineering Drawings - Show Dimensions, Tolerances, etc.

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J © 1995 Corel Corp. Bill of Material Example

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Bill of Material for a Panel Weldment Hard Rock Café’s Hickory BBQ Bacon Cheeseburger NumberDescriptionQtyDescriptionQty A60-71Panel Weldm’t 1Bun Hamburger Patty Cheddar Cheese Bacon BBQ Onions Hickory BBQ Sauce Burger Set Lettuce Tomato Red Onion Pickle French Fries Seasoned Salt 11-inch Plate HRC Flag 1 8 oz. 2 slices 2 strips ½ cup 1 oz. 1 leaf 1 slice 4 rings 1 slice 5 oz. 1 tsp 1 A 60-7 R R P 60-2 Lower Roller Assembly Roller Pin Locknet R A Guide Assem. Rear Support Angle Roller Assem. Bolt A A R Guide Assm, Front Support Weldm’t Wear Plate Bolt Bill of Materials – Manufacturing Plant and Fast-Food Restaurant

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Make-or-Buy Decisions  Decide whether or not you want (or need) to produce an item  May be able to purchase the item as a “standard item” from another manufacturer

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Parts grouped into families  Similar, more standardized parts  Uses coding system  Describes processing & physical characteristics  Part families produced in manufacturing cells  Mini-assembly lines © T/Maker Co. Group Technology Characteristics

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Group Technology Schemes Enable Grouping of Parts

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Production Documents  Assembly Drawing  Assembly chart  Route sheet  Work order

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J  Shows exploded view of product HeadNeck Handle End Cap © T/Maker Co. Assembly Drawing

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J SA1 A1 A2 Tuna Fish Mayonnaise Bread Tuna Assy FG Sandwich Assembly Chart for A Tuna Sandwich

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Assembly Drawing and Assembly Chart

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Route Sheet  Lists all operations

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Work Order Dept Oper Date Work Order Approved: JM Manufacturing © T/Maker Co. Authorizes producing a given item, usually to a schedule

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Engineering Change Notice (ECN)  A correction or modification of an engineering drawing or bill of material

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Configuration Management  A system by which a product’s planned and changing components are accurately identified and for which control and accountability of change are maintained

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Service Design - Nature of Customer Participation

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Improving Customer Relations at a Drive-up Window  Be especially discreet when talking with customer through the microphone  Provide written instructions for customers who must fill out forms you provide  Mark lines to be completed or attach a note with instructions  Always say ”please” and “thank you”  Establish eye contact with the customer if the distance allows it  If the transaction requires that the customer park the car and come into the lobby, apologize for the inconvenience.

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Moment-of-Truth at a Computer Company Experience Detractors I had to call more than once to get through. A recording spoke to me rather than a person While on hold, I get silence,and wonder if I am disconnected. The operator sounded like he was reading a form of routine questions. The operator sounded uninterested I felt the operator rushed me. Standard Expectations Only one local number needs to be dialed I never get a busy signal I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem A timely resolution to my problem is offered The operator is able to explain to me what I can expect to take place Experience Enhancers The operator was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The operator offered various times to have work done, to suit my schedule Ways to avoid future problems were suggested

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Application of Decision Trees to Product Design  Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes.  Considerations:  Include all possible alternatives and states of nature - including “doing nothing”  Enter payoffs at end of branch  Approach determining expected values by “pruning” tree

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Transition to Production  First issue: knowing when to move to production!  Second: must view product development as evolutionary, not responsibility of single individual/department  Third: expect to need a trial production period to work the bugs out