10 OM DECISION

DESIGNING OPERATIONS (CUSTOMIZED OR STANDARDIZED)

DESIGN OF Product Selection The objective of the product decision is to develop
PRODUCTS and implement a product strategy that meets the
demands of the marketplace with a competitive
advantage.
Generating New Changes in product opportunities, the products
Products themselves, product volume, and product mix may
arise due to understanding the customer, economic
change, sociological and demographic change,
technological change, political/legal change, market
practice, professional standards, suppliers, or
distributors.
Product Development A process for determining customer requirements
(customer “wants”) and translating them into
attributes (the “hows”) that each functional area can
understanding and act on (improve a product’s
design, production, maintainability, and use).
MANAGING Quality Standards The totality of features and characteristics of a
QUALITY product that bears on its ability to satisfy customer
quality expectations and how to achieve them
Total Quality Management of an entire organization so that it
Management System excels in all aspects of products and services that
are important to the customer
DESIGN OF Process strategy Organization’s approach to produce a production
PROCESS process with the necessary quality, flexibility, and
cost structure to meet product and volume
requirements.
Process Design Flowchart of production process
Production Technology Recent advances in production technology
Capacity Determine the number of units a facility can
produce to meet optimal utilization and efficiency
LOCATION Factors That Affect Selecting a facility / factory location
Location Decisions
LAYOUT Types of Layout Warehouse layout : Balance low-cost storage with
low-cost material handling. Fixed-position layout :
Move material to the limited storage areas around
the site. Process-oriented layout : Manage varied
material flow for each product. Work-cell layout :
Identify a product family, build teams, and cross-
train team members. Product-oriented layout :
Equalize the task time at each workstation.
HUMAN Labor Planning Staffing policies dealing with employment stability,
RESOURCES work schedules, and work rules
Job Design Tasks that constitute a job for an individual or group
 Labor Standards The amount of time required to perform a job or part
of a job
MANAGING OPERATIONS
SUPPLY CHAIN Supply Chain’s Sourcing Strategies (many suppliers, few supliers,
MANAGEMENT Strategic vertical integration, joint ventures, etc.)
Primary supplier selection criteria
Supply Chain Risk and Supplier failure to deliver, Supplier quality failures,
Mitigation Tactics Logistics delays or damage, Natural catastrophes,
etc.
Logistics Management An approach that seeks efficiency of operations
through the integration of all material acquisition,
movement, and storage activities.
Distribution The outbound flow of final products
Management
INVENTORY Raw material / Work-in- How much to order and when to order; how much to
process /Maintenance, keep on hand
repair, and operating
materials / Finished-
goods inventory
SCHEDULE Allocate and prioritize (1) minimize completion time , (2) maximize
demand to available utilization , (3) minimize work-in-process (WIP)
facilities inventory , and (4) minimize customer waiting time
MAINTENANCE Preventive Routine inspections, monitoring, servicing, and
maintenance keeping facilities in good repair
Breakdown Remedial maintenance that occurs when preventive
Maintenance maintenance fails and equipment/facilities must be
repaired on an emergency or priority basis