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Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firms primary products and services
Operations Strategy
Setting broad policies and plans for using the recourses of a firm to best support its long-term competitive strategy
Operations Strategy
Strategy Process
Customer Needs
Example
More Product
Corporate Strategy
Competitive Dimensions
Cost or Price
Quality
Delivery Speed
Delivery Reliability
Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers Order winners are the criteria that differentiates the products and services of one firm from another
Enterprise capabilities Operations andSupplier capabilities Operations & Supplier Capabilities R&DD R&D Technology Systems Technology Systems People People Distribution Distribution
Information management
Synergies must exist with other functional areas of the organization Operations account for 60-80% of the direct expenses that burden a firms profit.
or
= Goods and services produced All resources used
.
+ Energy
Output
Labor + Capital +
.
Materials
Examples
Productivity measures of
Restaurant
Retail Store
Power plant
Construction work Consulting Car manufacturing
Process Analysis
Processes take inputs to convert them into outputs, which is expected to have/create greater value than the original inputs.
Process Analysis
Cycle time - is the average time between completion of successive units of products or services. Utilization is the ratio of the time that a
Process Analysis
Process Flowcharting : To evaluate the existing flow of the processes and identify areas of improvement/correction.
Flowchart Symbols
Tasks or operations Examples: Giving an admission ticket to a customer, installing a engine in a car, etc.
Decision Points
Examples: How much change should be given to a customer, which wrench should be used, etc.
Flowchart Symbols
Storage areas or queues Examples: Sheds, lines of people waiting for a service, etc.
Yes
Process Analysis
Types of processes
1.
2.
Blocking
Occurs when the activities in a stage must stop because there is no place to deposit the item just completed If there is no room for an employee to place a unit of work done, the employee will hold on to it not able to continue working on the next unit
Starving
Occurs when the activities in a stage must stop because there is no work
If an employee is waiting at a work station and no work is coming to the employee to process, the employee will remain idle until the next unit of work comes
Bottleneck
Occurs when the limited capacity of a process causes work to pile up or become unevenly distributed in the flow of a process If an employee works too slow in a multistage process, work will begin to pile up in front of that employee. In this is case the employee represents the limited capacity causing the bottleneck. Refers to the fixed timing of the movement of items through the process
Pacing
Process Analysis
Measuring Process Performance
1. 2. 3. 4.
Productivity (Output to input) Efficiency (Output to standards) Run time, Setup time, Operating Time Throughput time (TPT), Throughput rate (TPR). cycle time,
5. 6.
Process Analysis
Consider a chocolate box packaging machine that is designed to produce at a rate of 30 boxes per minute. To switch the machine from 16-unit boxes to 12-unit boxes requires 30 minutes. Find the operating time to make a batch of 10,000, 12-unit boxes.
time
Throughput time = Average time for a unit to move through the system Velocity = Throughput time Value-added time
Cycle time
Answer: There are 4,800 minutes (60 minutes/hour x 80 hours) in 80 hours. So the average time between completions would have to be: Cycle time = 4,800/600 units = 8 minutes.
Productivity = Output
Input
Product Architecture Conceptual design Target Market Market Building Small-scale testing Detailed Design of Investment/financials Product and tools Building/Testing prototypes
Volume production prove out Factory start-up Volume increase for commercial target
Economic Analysis of Project Development Costs Using measurable factors to help determine:
Operational design and development decisions Go/no-go milestones A financial model consisting of major cash flows Sensitivity Analysis for what if questions
House of Quality
House of Quality
Achieve equivalent or better performance at a lower cost while maintaining all functional requirements defined by the customer
Does the item have any design features that are not necessary? Can two or more parts be combined into one? How can we cut down the weight? Are there nonstandard parts that can be eliminated?
Traditional Approach
Concurrent Engineering
Greatest improvements related to DFMA arise from simplification of the product by reducing the number of separate parts: During the operation of the product, does the part move relative to all other parts already assembled? Must the part be of a different material or be isolated from other parts already assembled?
1.
2.
3.
Must the part be separate from all other parts to allow the disassembly of the product for adjustment or maintenance?
Measuring Product Development Performance Measures Performance Of new products introduced Dimension Freq. to market introduction Time
Time-to-market
Number stated and number completed Actual versus plan Percentage of sales from new products
Productivity
Engineering hours per project Cost of materials and tooling per project Actual versus plan
Quality