EM 420 Production and Operations Management Eng. Rodger L. NKUMBWA Dept. of Electrical Engineering Copperbelt University

Eng 2 What is Operations Management? designoperationimprovement OM is the design, operation, and improvement of the systems that create and deliver primary products and services. not It is a field of management, and should not to be confused with operations research, management science, or industrial engineering. entire OM is concerned with the management of the entire system. – Decisions fit into three broad areas: – Strategic (long term) – Tactical (intermediate term) – Operational (short term)

Eng 3 Why Study Operations Management?

Eng 4 Definitions Automation Automation is a technology concerned with the application of mechanical, electronic, and computer- based systems to reduce the amount of clerical and manual effort in product design, manufacturing planning and control, and the business functions of the firm. Computer-aided design Computer-aided design (CAD) is the use of computer systems to support the product design functions. Computer-aided manufacturing Computer-aided manufacturing (CAM) is the use of computer systems to perform functions related to manufacturing engineering. CAD/CAM CAD/CAM is the integration of CAD and CAM into one. Computer-integrated manufacturing Computer-integrated manufacturing (CIM) combines CAD/CAM with other business functions.

Eng 5 Definitions (2) Flexible Manufacturing System Flexible Manufacturing System (FMS) is an automated, mid-volume, mid-verity, central computer- controlled manufacturing system Supply chain management Supply chain management is the term used to describe the management of materials and information across the entire supply chain, from suppliers to component producers to final assemblers to distributors and ultimately to the customers. – Total Quality Management – Total Quality Management (TQM) is management approach that pursues three main objectives: – achieving customer satisfaction, – continuous improvement, and – encouraging involvement of the entire workforce.

Eng 6 What are Business Functions? Business functions Business functions are the principal means of communication with the customer. – These functions include: – Design – Marketing – Sales – Forecasting – Cost accounting

Eng 7 What is a Production System? production system – A production system uses resources to transform inputs into desired outputs. Inputs: raw materials, parts, and customers Resources: labour, equipment, and supplies Outputs: goods, services, and satisfied customers transformation processes – Examples of transformation processes: Physical – manufacturing Locational – transportation Exchange – retailing Storage – warehousing Physiological – health care Informational – telecommunications

Eng 8 Goods versus Services – Services – Services are intangible processes Location of the service facility and customer interaction are important – Goods – Goods are physical outputs of a process Location of the service facility and customer interaction are not important

Eng 9 Value-Added Services – Value-added services – Value-added services are qualities of a product or service that make a customer’s life easier. – Commonly grouped into four categories: Information Problem solving Sales support Field support – Provide two benefits: Differentiate the organization from the competition. Build relationships with customers.

Eng 10 OM in the Organization Chart

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Eng 12 Importance of Operations Management – Synergies – Synergies need to exist with other functional areas of the organization. Sharing between customer service processes, purchasing, distribution, manufacturing, etc % – Operations account for 60-80% of the direct expenses that burden a firm’s profit.

Eng 13 Product Product Design Product design involves both determinations of which products are to be produced and the detailed design of individual products. – The product design process involves: Identification of need (some deficiency in machine design, adding more features to existing products, developing new product). Generation of preliminary ideas with respect to technical choices, materials, etc. Refinement of the product idea. Analysis of best designs from point of view of cost, functional requirements, manufacturability, etc. Selection of the best design. Creation of a detailed design that provides detailed specifications with respect to materials, tolerance, etc.

Eng 14 Manufacturing Planning – Process planning determining the sequence of individual processing and assembly operations needed to produce the product. – Master scheduling a listing of the products to be made, when they are to be delivered, and in what quantities. – Requirements planning ensures that all required material and parts are available when needed. – Capacity planning ensures that the factory is capable of producing what is required by its given number of machines and manpower.

Eng 15 Manufacturing Control – Concerned with managing and controlling physical operations to implement manufacturing plans. – Shop floor control deals with the problem of monitoring the progress of the product as it is being processed, assembled, moved, and inspected. – Inventory control is concerned with striking a balance between having too little inventory (with possible material stock-outs) and the carrying costs of too much inventory. – Quality control ensures that the quality of the product meets the standards specified by the product design (and customer expectations.

Eng 16 Business Strategies and Product Life Cycle – Introduction Research and product development Process modification Supplier development – Acceptance and growth Forecasting Manufacturing capacity – Maturity Production innovation Cost control – Decline Reduction and phase-out Transition to new products

Eng 17 Product Life Cycle

Eng 18 Business Strategies and Product Life Cycles 2.. – First-to-market Strong applied research is needed. Set high prices to achieve large short term-profits (focus only on the introduction and acceptance phases and then license production), or set a lower initial price to secure a high market share. – Second-to-market Imitate successful outputs offered by first-to-market organizations. Learn from their mistakes and offer improved or enhanced versions of the original products. – Late-to-market (or cost minimization) Wait until a product becomes fairly standardized and is demanded in large volume. Attempt to compete on the basis of costs. Strong production systems research is needed.

Eng 19 Significant Operations Management Concepts Just-in-time (JIT) Production Total Quality Control (TQC) Manufacturing Strategy Total Quality Management (TQM) and Quality Certification Business Process Reengineering Supply Chain Management

Eng 20 Current Issues in Operations Management Coordinate the relationships between mutually supportive but separate organizations. Optimizing global supplier, production, and distribution networks. Increased co-production of goods and services. Managing the customers experience during the service encounter. Raising the awareness of operations as a significant competitive weapon.

Eng 21 Trends in Business – Recent Trends Internet and e-business Supply chain management – Continuing Trends Quality and process improvement Technology integration Globalization Environmental issues Time-based competition

Eng 22 Strategic Management Strategic Management Issues Strategic Management Thinking Strategic Management Thinking The Strategic Management Process The Strategic Management Process Customer Analysis Customer Analysis Competitor Analysis Competitor Analysis Strategy Formulation Strategy Formulation Execution Execution of Manufacturing strategy

Eng 23 Wrap up… “Plans are nothing, planning is everything.” Dwight D. Eisenhower “Plans are nothing, planning is everything.” Dwight D. Eisenhower

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