operations and productivity

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Learning Objectives : 

Learning Objectives When you complete this chapter, you should be able to: Identify or Define: Diff. in Services & Goods Operations management (OM) What operations managers do Production and productivity

Goods Versus Services : 

Goods Versus Services Table 1.3

What Is Operations Management? : 

What Is Operations Management? Production is the creation of goods and services Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs

Organizing to Produce Goods and Services : 

Organizing to Produce Goods and Services Essential functions: Marketing – generates demand Production/operations – creates the product, helps in decisions Finance/accounting – tracks how well the organization is doing, pays bills, collects the money

Organizational Charts : 

Organizational Charts Manufacturing Figure 1.1(C)

Organizational Charts : 

Organizational Charts Airline Figure 1.1(B)

The Critical Decisions : 

The Critical Decisions Service and product design What good or service should we offer? How should we design these products and services? Quality management How do we define quality? Who is responsible for quality? Table 1.2 (cont.)

The Critical Decisions : 

The Critical Decisions Process and capacity design What process and what capacity will these products require? What equipment and technology is necessary for these processes? Location Where should we put the facility? On what criteria should we base the location decision? Table 1.2 (cont.)

The Critical Decisions : 

The Critical Decisions Layout design How should we arrange the facility and material flow? How large must the facility be to meet our plan? Human resources and job design How do we provide a reasonable work environment? How much can we expect our employees to produce? Table 1.2 (cont.)

The Critical Decisions : 

The Critical Decisions Supply-chain management Should we make or buy this component? Who are our suppliers and who can integrate into our e-commerce program? Inventory, material requirements planning, and JIT How much inventory of each item should we have? When do we re-order? Table 1.2 (cont.)

The Critical Decisions : 

The Critical Decisions Intermediate and short–term scheduling Are we better off keeping people on the payroll during slowdowns? Which jobs do we perform next? Maintenance Who is responsible for maintenance? When do we do maintenance? Table 1.2 (cont.)

Productivity : 

Measure of process improvement Represents output relative to input Only through productivity increases can our standard of living improve Productivity

Productivity Calculations : 

Productivity Calculations Labor Productivity

Example 1.6 : 

Example 1.6

Multi-Factor Productivity : 

Multi-Factor Productivity Also known as total factor productivity Output and inputs are often expressed in dollars

Example 1.7 : 

Example 1.7

Service Productivity : 

Service Productivity Typically labor intensive Frequently focused on unique individual attributes or desires Often an intellectual task performed by professionals Often difficult to mechanize Often difficult to evaluate for quality