1. EMBA 8355 Satish Nargundkar
Operations
EMBA 8355
Satish Nargundkar

2. Overview: Demand Characteristics
What is Ops?
Managing resources efficiently/effectively to create products/services to meet demand.
Demand Characteristics
Volume – repeatability – affects standardization
Variety – range of products – affects inputs, setup cost
Variation – predictability – affects inventory, lead time
Visibility – customer contact – needs interpersonal skills

3. Operations Goals Quality – Meet specs, Low variation
Speed – Lead times for order taking, delivery
Dependability – Keep promises, keep them informed
Flexibility – Customization, ability to change midstream
Cost - minimization

4. Operations Decision Areas
Capacity Planning
Match capacity to demand
Supply Networks
Vertical integration – how much to own? How many suppliers? Types of Relationships
Process Technology
Converting resources to product/service efficiently
Organization/Process Improvement
Reporting structure, LSS, Change Management

5. Operations Strategy Matrix
Objective
Capacity
Supply Network
Process Technology
Organization /Development
Quality
Speed
Dependability
Flexibility
Cost
Assignment: How does your organization manage the four decision areas to achieve its operational objectives?

6. Introduction to Lean Toyota Motor Corp. 5S Philosophy
Elimination of waste
Smooth flow
Quick Implementation
5S Philosophy
Seiri - Sort/Separate – Get rid of the unnecessary
Seiton - Straighten – Put things where most needed
Seiso - Sweep/Shine – Clean, paint
Seiketsu – Standardize – Create agreed upon procedures
Shitsuke – Sustain – Discipline – Make it a habit
Practice being this, not just doing it once.

7. Lean Simulation 1 Game Rules
Make teams of 7 (plus or minus 1)
Stay at arms length from each other
Start Stopwatch and begin.
Person with ball (Person 1) tosses to
another team member, who then
tosses to another, and so on.
All team members must get ball.
Return ball to Person 1.
Stop the stopwatch. Note elapsed time.
Repeat and get 3 such cycle-time measurements.

8. Introduction to Six Sigma
Started by Motorola, GE
Improve Quality
Data/Analysis focus
Reduction of variation
Six standard deviations (Sigmas) on either side of mean must fit within the customer specs.
Can take a few months to implement

9. Standard Deviation (Sigma) Exercise 1
Variable
Deviation
Squared
Obs
Value
from Mean 1 5 2 6 3 7 4 8
Sum of Squared 9
Deviations (SSD)
Sum =
Mean =
Mean Squared
Deviation (MSD = SSD/n-1))
Standard Deviation = Square Root of MSD =

10. Standard Deviation (Sigma) Exercise 2
Variable
Deviation
Squared
Obs
Value
from Mean 1 5 2 8 3 11 4 14
Sum of Squared 17
Deviations (SSD)
Sum =
Mean =
Mean Squared
Deviation (MSD = SSD/n-1)
Standard Deviation = Square Root of MSD =

11. Interpretation
What do the two sigma values we computed tell us about the respective datasets?

12. Excel Exercise in Computing Sigma
See dataset provided.

13. Interpretation How many data points fall within
+/- One Sigma from the Mean?
How many fall within
+/- 2 sigma?
+/- 3 sigma? ….
+/- 6 sigma?

14. What is 6 sigma Quality?
Roughly 3.4 defects per million opportunities.