THE OPERATIONS MANAGEMENT FUNCTION. Productivity Productivity future vision Watch how future technology will help people make better use of their time,

THE OPERATIONS MANAGEMENT FUNCTION

Productivity

Productivity future vision

Watch how future technology will help people make better use of their time, focus their attention, and strengthen relationships while getting things done at work, home, and on the go. (Release: 2011)

Future Vision

Business Competitiveness

Based on the organisation’s productivity.Measurable by the productivity ratio.Competitive advantage = increased

productivity.

Competitive Edge

Known as a ‘competitive advantage.’

May come in several forms depending on the structure of the operations.

1. Lower price than competition.

2. Higher quality product than competition.

3. Can be produced quicker than competitors.

Optimising Operations

How does an operations manager increase productivity?

Ensure the most efficient use of the corporation’s input.

The greatest or best output from the factors of production used in the input process.

Optimising Operations

Output can be measured in terms of 1. Quality2. Quantity

The use of technology is one way an operations manager can increase productivity. Iluka – the Hopetoun Solution?????

Optimising Operations

Outsourcing operations to a country with cheaper labour.

Outsource a part of the production process to a country with cheaper labour.

Optimising Operations

Operations Managers make strategic decicions in these area to maintain and improve productivity:

1. Facility design, layout and location.

2. Materials management

3. Technology

4. Quality Management

Materials Management

Strategy used to plan, organise and control the materials used in the operations process.

Iluka loses A$800,000 when the Kulwin facility isn’t operating.

Materials management

Iluka – to buy machinery or lease it?

To outsource machinery maintenance or have skilled employees in the corporation?

The tyre problem for large earthmoving machinery.

Quality Management

The management of the production process to ensure outputs produced are done so consistently and reliably.

Benchmarking.

Employees are following proceedures.

Facilities design, location and layout.

Location Location Location !!!!

SynergyConsumer Expectations

Facilities design, location and layout.

Of extreme importance in maximising the efficiency of the overall operations system.

The organisation’s manufacturing / operating facilities location is critical in respect to the speed and efficiency of the operations system.

Facilities design, location and layout.

Premises design and layout determines the way it can satisfy customers demands and supply outlets.

Facilities design, location and layout.The case of RAY”S OUTDOORS 2009

1959 – 1 shop (tents and camping gear)

Geelong location (near beaches)

2009 – 39 Shops (Camping, lifestyle, fishing and clothing products)

Head Office Geelong

6 Warehouses in non-strategic positions.

Ray’s Outdoors

Facilities design, location and layout.The case of RAY”S OUTDOORS 2009

2009 – Materials arrive by seafreight in Melbourne and travel by truck to Geelong.

Freight outsourced to transport company.Some warehousing outsourced as well.Orders for interstate shops ‘picked and

packed’ from Geelong and freighted back through Melbourne. Inefficient?

Facilities design, location and layout.The case of RAY”S OUTDOORS 2009

Prior to sale of RAY’S outdoors to Supercheap Auto, Ray set up a new admin and warehouse in Altona.

Central operations moved to Altona.Outsourced freight company also built a

new facility next door to RAY’s new Altona facility.

Facilities Location

Operations managers’ considerations when planning a new facility location.

Size and space (for future growth)Access to suppliers, transport and

customers.An examination of the type of business

activity may determine its exact location.

Facilities design and layout

Should be planned for the best physical layout possible – David Jones Film.

Ensure efficient outflow of resources.

The 3 workflow layouts we study:

1. Process Layout

2. Product Layout

3. Fixed Position Layout

Process Layout

Equipment and Work Centres are arranged according to similarity of Function.

Allows for the sequence of a process or production process.

Hospital, bakery, office.

Product Layout

MANUFACTURING DESIGNHigh volumn productionAssy line (assembly line)Cars

Fixed-Position Layout

For the use in the production, construction of large products.

BuildingsBoatsOil Rigs

The input is brought to the product.