TASK1 by UMBRELLA Corp.2008 PowerPoint Presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle.

PowerPoint Presentation to accompany Operations Management, 6E (Heizer & Render)

© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074581-1TASK1 by UMBRELLA Corp.2008

Operations Operations ManagementManagement

Operations and ProductivityOperations and ProductivityChapter 1Chapter 1

by UMBRELLA Corp. 2008



OutlineOutline Global company profile: Whirlpool What is Operations Management?

The heritage of Operations Management Why study OM? What Operations Managers do

Organizing to produce goods and services Where are the OM jobs?

Exciting new trends in Operations Management

Operations in the service sector The Productivity challenge



Learning ObjectivesLearning Objectives

When you complete this chapter, you should be able to: Identify or Define:

Production and productivity Operations Management (OM) What operations managers do Services

Describe or Explain: A brief history of operations management The future of the discipline Measuring productivity



Whirlpool Case ExampleWhirlpool Case Example

Change in attitude - employees “live quality” Training - “use your heads as well as your

hands” Flexible work rules Gain-sharing Global procurement Role of information/information technology Adoption of a Worldwide strategy



What Is Operations Management?What Is Operations Management?

Operations management is the set of activities that creates goods and services by transforming raw materials (inputs) into value products (outputs)

Production is the creation of goods and services according to Estimated Demand.



OM New VisionOM New Vision

Four important tasks:1. Determine customer needs

2. Develop Product Strategy

3. Estimate Demand & Secure Needed Materials

4. Manage Strategic Planning Process



Significant Events in OMSignificant Events in OM

Division of labor (Smith, 1776) Standardized parts (Whitney, 1800) Scientific management (Taylor, 1881) Coordinated assembly line (Ford 1913) Gantt charts (Gantt, 1916) Motion study (the Gilbreths, 1922) Quality control (Shewhart, 1924)



Significant Events - ContinuedSignificant Events - Continued

CPM/PERT (Dupont, 1957) MRP (Orlicky, 1960) CAD Flexible manufacturing systems (FMS) Manufacturing automation protocol (MAP) Computer integrated manufacturing (CIM)



Why Study OM?Why Study OM?

OM is changing fast by three components:1. Information Technology

2. Market’s Demand

3. Increased globalism

We want (and need) to know how, when and where, goods and services should be produced.

We like to know what operations managers do OM is such a costly part of an organization, but the

most important to be a successful firm.



What Operations Managers DoWhat Operations Managers Do

Plan process according to Market changes Organize and Coordinate employees Control Staff Lead fair and impartial

.. and get work done through people



Ten Critical DecisionsTen Critical Decisions 01 Service, product design 02 Quality management 03 Process, capacity design 04 Location 05 Layout design 06 Human resources, job design. 07 Supply-chain management 08 Inventory management 09 Scheduling 10 Maintenance



Organizational FunctionsOrganizational Functions

Human resource Management Marketing

Creates global customers Research & Development Process

creates product or service according demand Finance/Accounting

Obtains funds Tracks money



Where Are the OM Jobs?Where Are the OM Jobs? Technology/methods Facilities/space utilization Strategic issues Response time People/team development Customer service Quality Cost reduction Inventory reduction Productivity improvement Feedback



New Challenges in OMNew Challenges in OM

Local or national focus Batch shipments Low bid purchasing

Lengthy product development

Standard products Job specialization

Global focus Just-in-time Supply chain

partnering Rapid product

development, alliances

Mass customization Empowered

employees, teams

FromFrom ToTo



New Challenges in OMNew Challenges in OM

Technological Challenges- Bio-genetic- Miniaturization

Societal Challenges - Intellectual property

- The environment- Financial Reporting

Geopolitical Challenges- China- Japan



Characteristics of GoodsCharacteristics of Goods

Tangible product Consistent product definition Production usually separate from

consumption Can be inventoried Low customer interaction



Characteristics of ServiceCharacteristics of Service

Intangible product Produced & consumed at same time Often unique High customer interaction Inconsistent product definition Often knowledge-based Frequently dispersed



Goods Versus ServicesGoods Versus Services

Can be resold Can be inventoried

Some aspects of quality measurable

Selling is distinct from production

Reselling unusual Difficult to

inventory Quality difficult to

measure Selling is part of

service

GoodsGoods ServiceService



Goods Versus Services - Goods Versus Services - ContinuedContinued

Product is transportable

Site of facility important for cost

Often easy to automate

Revenue generated primarily from tangible product

Provider, not product is transportable

Site of facility important for customer contact

Often difficult to automate

Revenue generated primarily from intangible service.

GoodsGoods ServiceService



1850 75 1900 25 50 75 2000 40 50 60 70 1970 75 80 85 90 95 2000Percent

United States

Canada

France

Italy

Britain

Japan

W Germany

19701991

Services

Industry

Farming

250

200

150

100

50

0

80

%70

60

50

40

30

20

10

0

U.S. Employment, % Share Services as a Percent of GDP U.S. Exports of ServicesIn Billions of Dollars

Year 2000 data is estimated

Development of the Service Development of the Service EconomyEconomy



The Economic System The Economic System Transforms Inputs to OutputsTransforms Inputs to Outputs

The economic system transforms inputs to outputs at about an annual 1.7% increase in productivity (capital 38% of 1.7%), labor (10% of 1.7%), management (52% of 1.7%)

Land, Labor, Capital, Management

Goods and Services

Feedback loop

Inputs Process Outputs



Measure of process improvement Represents output relative to input

Productivity increases improve standard of living

From 1889 to 1973, U.S. productivity increased at a 2.5% annual rate

ProductivityProductivity

ProductivityProductivityProductivityProductivity UnitsUnits producedproducedUnitsUnits producedproducedInput usedInput usedInput usedInput used= = = =



Measurement ProblemsMeasurement Problems

Quality may change while the quantity of inputs and outputs remains constant

- Freshness, Reliability, Durability, Safety, Environmental Friendly, Serviceability, Aesthetics, Attribute Consistency.

External elements may cause an increase or decrease in productivity

Precise units of measure may be lacking



Productivity VariablesProductivity Variables

Labor - contributes about 10% of the annual increase

Capital - contributes about 32% of the annual increase

Management - contributes about 52% of the annual increase



Jobs in the U.SJobs in the U.S

26%

18%

16%

14%

6%6% 5% 5%

3%1%

Education, Health, etc.

Manufacturing

Retail Trade

State & Local Gov't

Finance, Insurance

Wholesale Trade

Transport, Public Util.

Construction

Federal Government

Mining



Productivity Growth 1971- 1992Productivity Growth 1971- 1992

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

United StatesWest GermanyJapan

Whole Economy Manufacturing

% p

er y

ear

LaborLabor



Service ProductivityService Productivity

Typically labor intensive Frequently individually processed Often an intellectual task performed by

professionals Often difficult to mechanize Often difficult to evaluate for quality

TASK1 by UMBRELLA Corp.2008 PowerPoint Presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle.

Documents

operations managers

prentice hall

e heizer render

powerpoint presentation

upper saddle river

scientific management

productivity challenge

worldwide strategy slide