Marketing Manager Course - Chapter 17

z Describe how operations management ensures supplies of inputs and an efficient production system.. z Use tools of operations management, including Gantt charts, PERT networks, and st

Chapter

Operations Management

Learning Objectives

After reading this chapter, you should be able to:

z Define operations management and its three stages:

inputs, transformation and disposition.

z Describe how operations management ensures supplies

of inputs and an efficient production system.

z Use tools of operations management, including Gantt

charts, PERT networks, and statistical process tools.

z Explain the role of quality management in the

operations management process.

z Understand and apply the principles of quality

management, kaizen, just-in-time manufacturing, and

kanban to the production process.

What is Operations Management?

organization uses to:

¾ Strategic Management (Chapter 7)

¾ Planning (Chapter 5)

¾ Information Systems Management (Chapter 18)

Skills for Operations Management

The Operations Management

Goods Services Information

Planning in Operations

Management

management.

the management environment to set future

objectives and map out activities necessary to

achieve those objectives.

during a given period.

facility

produced

allows for efficient production

Acquiring Inputs

determine the materials and parts required in the

production process

component parts that the firm keeps on hand

levels more or less consistent.

9 Fixed point reordering system

9 Fixed interval reordering system

The Conversion Process

product’s inputs are converted to the final product.

¾ Works to lower the cost of creating the product; or to

¾ Create a better product for the same cost.

Designing the Process

operation and identifying:

¾ Every major step that needs to be done.

¾ The order that the steps must take.

¾ The flow of the steps from start to finish (including their

relationship to each other).

¾ The amount of time each individual step requires.

Example of Process Analysis Information

1 week Following F

6

G Test equipment

1 week Following B, E

5

F Install equipment

1 week Following C

4

E Install floors

1 week Following C

3

D Install electrical

fixtures

2 weeks None

2

C Paint interior

1 week None

1

B Order equipment

4 weeks None

1

A Get permit

Time Relation to Other Steps

Order Step

Process Design Tools

zGantt Charts: provide a visual sequence of

the process steps.

zLoad Charts: type of Gantt chart based on

departments or specific resources that are

used in the process.

zProgram Evaluation and Review Technique

(PERT) Network: tool for analyzing the

conversion process.

Example of a Gantt Chart

Example of a Load Chart

Example of a PERT Network

Start Order baking equipment Install baking equipment Test equipment

Paint interior Install electrical

1

1

Facilities Layout

equipment and employees

fixed sequence

self-contained

assemble components, and they are then brought to a final assembly area

Flexible Manufacturing

zFlexible manufacturing – techniques that

help reduce the setup costs associated with

the production system

manufacturing tools make the work process more flexible

Process Monitoring Tools

Statistical Process C ontrol

Statistical Process Control Tools

ause-and-Process

C apability

M easures

C ontrol C harts

Disposition of the Product

product – a good or a service Operations

management includes customer fulfillment process.

evaluate and track the order through the process:

¾ Creating order documentation

¾ Material checking

¾ Capacity evaluation

¾ Load leveling

Managing Quality

productivity a strategic objective of the firm.

from different areas of the firm work together to

increase efficiency.

production costs, increases profitability, may lead

to lower prices, and attract new customers.

quality management.

Managing Quality (continued)

Total Quality Management (TQM)

sequence should be one of the main objectives of

operations management.

belief that all of an organization’s activities need to be

focused on improving its product

¾ Plan

¾ Do

¾ Check

¾ Act

Total Quality Management (TQM)

(continued)

¾ Correct variances in operations management by using TQM

principles to find and correct their source.

¾ Operations managers must be sure their employees

understand what TQM means and that each worker is responsible for improving quality.

¾ Managers must also be willing to act on any suggestions or

problems that employees identify.

¾ Quality circles.

Total Quality Management (TQM)

(continued)

¾Operations management can focus on improving the quality

gap – the difference between what customers want and what

they actually get from the company.

¾ Suppliers are seen as partners with the firm.

¾ Operations management uses TQM techniques to focus on, and improve the production process.

Kaizen (Continuous Improvement)

and Efficiency

in the organization’s production system from

numerous small, incremental improvements in

production processes.

waste in materials, inventory, production steps, and activities that do not add value.

¾Maintenance

¾Kaizen

Just-in-Time (JIT) Systems

firm’s product in the least amount of time.

suppliers, and customers.

lowest level possible.

they are needed.

needed

Process Reengineering

rather than making incremental changes.

viewed as a complete process.

redesigning the entire process including:

¾ Cutting out steps that are not needed.

¾ Reducing paperwork.

Applications: Management is Everyone’s

Business—For the Manager

key to remaining competitive and can lead to the

survival of the organization.

concepts and techniques of operations

management.

Applications: Management is Everyone’s

Business—For Managing Teams

measurement and evaluation.

that the team structure facilitates rather than gets

in the way of improving production processes.

Applications: Management is Everyone’s

Business—For Individuals

organization and how they are adding value to the

process.

acceptable in today’s competitive market.