Management ch 21 operations and service management

Operations and Service Management Strategic success depends on efficient operations  Operational concerns take on even greater importance in today’s competitive environment where con

Operations and Service Management

Operations and Service Management

 Strategic success depends on

efficient operations

 Operational concerns take on even

greater importance in today’s competitive environment where consumers often want customized products and services delivered immediately Manager’s Challenge: Donnelley

Operations and Service Management

 Management and control of production operations

 Define operations management

 How to bring operations into strategic decision making

 Overview of integrated operations activities

Topics Chapter 21

Operations Management

in the physical production of goods or services and uses quantitative techniques for solving manufacturing problems

Technical core = heart of the organization’s production of its product

or service

The Organization as an Operations

Management System

Products & Facilities

Product design Facilities layout

Outputs

Products Services

Operations Strategy

Feedback

Manufacturing and Service

Organizations

Source: Based on Richard L Daft, Organization Theory and Design (Cincinnati, OH: South-Western College Publishing, 1998), 130; and Byron J Finch and Richard L Luebbe, Operations

Operational Concerns for Manufacturing and Service Organizations

and productivity

Four Stages of Operations Strategy

Stage 4 Initiates Competitive Advantage

• Advanced capabilities developed and significant input to strategic process provided

• Concerns:

New products New services New technologies International

Stage 3 Organizationally Supportive

• Organization’s competitive strategy closely followed and supported

• Concerns:

Advanced process technologies

New plants What to make for the United States

Stage 2 Industry Current

• Goals set according

to industry practice

• Concerns:

Capital investment Quality control Inventory management Capacity

The Integrated Enterprise

 Supply chain management = managing the sequence of suppliers and

purchasers, covering all stages of processing from obtaining raw materials

to distributing finished goods to final consumers

The E-Supply Chain

Retail Chain

Retail Store

Intranet Data Exchange

Customer

Extranet Data Exchange

Manufacturer

Extranet Data Exchange

Supplier

Partnership approach to the supply chain optimizes inventory levels and enables rapid response to customer needs

How to Win Customers?

Design for Manufacturability

and Assembly - DFMA

 Often requires

manufacturers, and assemblers to meet objectives of design

Product Design Objectives

1 Producibility

Cost Quality Reliability

2 3 4

Service Design Objectives

1 Producibility

Cost Quality Reliability

2 3 4

Timing

5

Ethical Dilemma: A Friend for Life?

 Purchasing supplies, services, and raw materials for use in the

production process

Technology Automation

 Service Technology

needs for each menu item

Technology Automation

 Flexible Manufacturing Systems , the use of automated production lines that can be quickly adapted to produce more than one kind of

product

 CAD/CAM

Facility Location

 Cost-benefit analysis – most common

approach to selecting a site for a new location

 New location scouting software is helping managers turn facilities location into a

science

Inventory Management

Finished goods inventory Work-in-process inventory

Techniques for Inventory Management

Economic order quantity

Material requirements

planning Just-in-Time inventory

systems Logistics & Distribution

management

Logistics and Distribution

Material Requirements Planning - MRP

 Dependent demand inventory planning and control system

 Schedules exact materials required

 Is computer based

 Based on precise estimates of future needs for production

Lean Manufacturing and Productivity

 Lean manufacturing = process using highly trained employees at every

stage of the production process to cut waste and improve quality – employee involvement is key

= Output Labor dollars

Improving Productivity