1. OPERATIONS MANAGEMENT for MBAs Fourth Edition
Meredith and Shafer
Prepared by:
Al Ansari
Seattle University
John Wiley and Sons, Inc.
Chapter 3: Controlling Processes

2. Controlling Processes
Chapter 3
Controlling Processes
Chapter 3: Controlling Processes

3. Introduction
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4. Texas Instruments
Wanted to design new Accounts Receivable using new technologies
To monitor and control their cost
They identified variety of measures to track including actual versus projected spending
Problem – the planned budget exceeded the contract funs available
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5. Automotive Systems Group of Johnson Controls
Having trouble controlling their product development process
Each manager used a different process
Workers did not know who was responsible for the work
Developments were failing because of rapid company growth
New employees were having trouble fitting into the culture.
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6. Monitoring and Control
Monitor processes, output, and environment to make sure that strategy is appropriate to achieve goals.
First, identify the key factors to be controlled.
Second, identify the relevant information to be collected.
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7. Stages of Operational Effectiveness
Internally Neutral Minimize manufacturing’s negative potential
Externally Neutral Industry practice is followed
Internally Supportive Manufacturing investment support the business strategy
Externally Supportive Manufacturing is involved up front in strategic decision
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8. Benefits of Balanced Scorecard
An effective way to clarify and gain consensus of the strategy
A mechanism for communicating the strategy throughout the entire organization
A mechanism for aligning departmental and personal goals to the strategy
A way to ensure that strategic objectives are linked to annual budgets
Timely feedback related to improving the strategy
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9. ISO 9000
ISO 9000 was developed by International Organization for Standardization.
ISO 9000 was developed as a guideline for designing , manufacturing, selling, and servicing products.
It is a “checklist” of good business practices.
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10. ISO 9000
Guidelines for designing, manufacturing, selling, and servicing products.
Selecting an ISO 9000 certified supplier provides some assurance that supplier follows accepted business practices in areas covered by the standard
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11. Elements of ISO 9000
Control of Inspection, Measuring, and Test Equipment
Inspection and Test Status
Control of Nonconforming Product
Corrective and Preventive Action
Handling, Storage, Packaging, Preservation, and Delivery
Internal Quality Audits
Training
Servicing
Statistical Techniques
Management Responsibility
Quality System
Contract Review
Design Control
Document and Data Control
Purchasing
Control of Customer Supplied Product
Product Identification and Traceability
Process Control
Inspection and Testing
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12. ISO 14000
Series of standards covering environmental management systems, environmental auditing, evaluation of environmental performance, environmental labeling, and life-cycle assessment.
Intent is to help organizations improve their environmental performance through documentation control, operational control, control of records, training, statistical techniques, and corrective and preventive actions.
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13. Process Control
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14. Process Control
Process control is the act of reducing difference between plan and reality for each process.
Control is one of the manager’s most difficult tasks involving mechanistic and human elements.
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15. Process Control Characteristic of a good control system:
Should be flexible
Should be cost effective
Should be simple
Must operate in a timely manner
Should be precise
Should be fully documented
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16. Control Based on Attributes and Variables
Inspection for Variables: measuring a variable that can be scaled such as weight, length, temperature, and diameter.
Inspection of Attributes: determining the existence of a characteristic such as acceptable-defective, timely-late, and right- wrong.
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17. Chance Versus Assignable Variation
Chance variation is variability built into the system.
Assignable variation occurs because some element of the system or some operating condition is out of control.
Quality control seeks to identify when assignable variation is present so that corrective action can be taken.
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18. Control Charts
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19. Control Charts
Developed in 1920s to distinguish between chance variation in a system and variation caused by the system’s being out of control - assignable variation.
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20. Control Charts continue
Repetitive operation will not produce exactly the same outputs.
Pattern of variability often described by normal distribution.
Random samples that fully represent the population being checked are taken.
Sample data plotted on control charts to determine if the process is still under control.
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21. Control Chart with Limits Set at Three Standard Deviations
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22. Control Charts for Variables
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23. Two Control Charts Sample Means Chart Range Chart
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24. Sample Data of Weights of Tacos (Ounces)
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25. Analysis of Scenario 1
Sample means show problem having increased from 5 ounces to 8 ounces. Sample ranges have not changed from sample to sample.
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26. Analysis of Scenario 2
Sample ranges show problem having increased from 2 ounces to 6 ounces. Sample means have not changed from sample to sample.
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27. Patterns of Change in Process Distributions
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28. Control Limits Sample Means Chart: Range Chart:
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29. Constructing Control Charts
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30. Mean Age of Ice Cream
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31. Range in Ice Cream Age
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32. Control Charts for Attributes
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33. Fraction-Defective (p) Charts
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34. Number-of-Defects (c) Charts
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35. Service Defections Organizations should monitor customer defections
feedback from defecting customers can be used to identify problem areas
can determine what is needed to win them back
changes in defection rate can be used as early warning signal
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36. Chapter 3: Controlling Processes

37. Copyright
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Chapter 3: Controlling Processes