Bài giảng Operations Management - Chapter 1: Operations and Productivity

Operations ManagementOperations and ProductivityChapter 11OutlinePROFILE: HARD ROCK CAFEWHAT IS OPERATIONS MANAGEMENT?ORGANIZING TO PRODUCE GOODS AND SERVICES WHY STUDY OM?WHAT OPERATIONS MANAGERS DOHow This Book Is OrganizedWHERE ARE THE OM JOBS?2Outline - ContinuedTHE HERITAGE OF OPERATIONS MANAGEMENTOPERATIONS IN THE SERVICE SECTORDifferences between Goods and ServicesGrowth of ServicesService PayEXCITING NEW TRENDS IN OPERATIONS MANAGEMENT3Outline - ContinuedTHE PRODUCTIVITY CHALLENGEProductivity MeasurementProductivity VariablesProductivity and the Service Sector THE CHALLENGE OF SOCIAL RESPONSIBILITY4Learning ObjectivesWhen you complete this chapter, you should be able to :Identify or Define:Production and productivityOperations Management (OM)What operations managers doServices5Learning Objectives - ContinuedWhen you complete this chapter, you should be able to :Describe or Explain:A brief history of operations managementCareer opportunities in operations managementThe future of the disciplineMeasuring productivity6The Hard Rock CafeFirst opened in 1971Now – 110 restaurants in over 40 countriesRock music memorabiliaCreates value in the form of good food and entertainment3,500+ custom meals per day How does an item get on the menu?Role of the Operations Manager7What Is Operations Management?Production is the creation of goods and servicesOperations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs8Organizing to Produce Goods and Services9Organizing to Produce Goods and ServicesEssential functions:Marketing – generates demandOperations –creates the productFinance/accounting – tracks organizational performance, pays bills, collects money10Organizational FunctionsMarketingGets customersOperationscreates product or serviceFinance/AccountingObtains fundsTracks money© 1995 Corel Corp.11Sample Organization Charts12Functions - BankOperationsFinance/AccountingMarketingCheckClearingTellerSchedulingTransactionsProcessingSecurityCommercial Bank© 1984-1994 T/Maker Co.13Functions - AirlineOperationsFinance/AccountingMarketingGroundSupportFlightOperationsFacilityMaintenanceCateringAirline© 1984-1994 T/Maker Co.14Functions - ManufacturerOperationsFinance/AccountingMarketingProductionControlManufacturingQualityControlPurchasingManufacturing15Organizational ChartsCommercial BankOperationsTeller SchedulingCheck ClearingTransactions processingFacilities design/layoutVault operationsMaintenanceSecurityFinanceInvestmentsSecurityReal EstateAccountingAuditingMarketingLoans Commercial Industrial Financial Personal MortgageTrust Department16Organizational ChartsAirlineOperationsGround support equipmentMaintenanceGround Operations Facility maintenance Catering Flight Operations Crew scheduling Flying Communications DispatchingManagement scienceFinance & AccountingAccountingPayablesReceivablesGeneral LedgerFinanceCash controlInternational exchange ratesMarketingTraffic administrationReservationsSchedulesTariffs (pricing)SalesAdvertising17Organizational ChartsManufacturingOperationsFacilities: Construction:maintenanceProduction & inventory control Scheduling: materials controlSupply-chain managementManufacturing Tooling, fabrication,assemblyDesign Product development and design Detailed product specificationsIndustrial engineering Efficient use of machines, space, and personnelProcess analysis Development and installation of production tools and equipmentFinance & AccountingDisbursements/credits Receivables Payables General ledgerFunds Management Money market International exchangeCapital requirements Stock issue Bond issues and recallMarketingSales promotionsAdvertisingSalesMarket research18Why Study OM?19Why Study OM?OM is one of three major functions (marketing, finance, and operations) of any organization.We want (and need) to know how goods and services are produced.We want to understand what operations managers do.OM is such a costly part of an organization.20Options for Increasing Contribution21What Operations Managers DoPlan - Organize - Staff - Lead - Control22Ten Critical DecisionsService, product design..Quality managementProcess, capacity design..Location .Layout design ..Human resources, job design..Supply-chain managementInventory management .Scheduling Maintenance .Ch. 5Ch. 6, 6SCh. 7, 7SCh. 8Ch. 9Ch. 10, 10SCh. 11,11sCh. 12, 14, 16Ch. 3, 13, 15Ch. 1723The Critical DecisionsQuality managementWho is responsible for quality?How do we define quality?Service and product designWhat product or service should we offer?How should we design these products and services?24The Critical Decisions - ContinuedProcess and capacity designWhat processes will these products require and in what order?What equipment and technology is necessary for these processes?LocationWhere should we put the facilityOn what criteria should we base this location decision?25The Critical Decisions - ContinuedLayout designHow should we arrange the facility?How large a facility is required?Human resources and job designHow do we provide a reasonable work environment?How much can we expect our employees to produce?26The Critical Decisions - ContinuedSupply chain managementShould we make or buy this item?Who are our good suppliers and how many should we have?Inventory, material requirements planning, How much inventory of each item should we have?When do we re-order?27The Critical Decisions - ContinuedIntermediate, short term, and project schedulingIs subcontracting production a good idea?Are we better off keeping people on the payroll during slowdowns?MaintenanceWho is responsible for maintenance?When do we do maintenance?28Where are the OM Jobs29Where are the OM Jobs30Where Are the OM Jobs?Technology/methodsFacilities/space utilizationStrategic issuesResponse timePeople/team developmentCustomer serviceQualityCost reductionInventory reductionProductivity improvement31The Heritage of Operations Management32Significant Events in Operations Management33The Heritage of Operations ManagementDivision of labor (Adam Smith 1776 and Charles Babbage 1852)Standardized parts (Whitney 1800)Scientific Management (Taylor 1881)Coordinated assembly line (Ford/Sorenson/Avery 1913)Gantt charts (Gantt 1916)Motion study (Frank and Lillian Gilbreth 1922Quality control (Shewhart 1924; Deming 1950)Computer (Atanasoff 1938)CPM/PERT (DuPont 1957)34The Heritage of Operations Management - ContinuedMaterial requirements planning (Orlicky 1960)Computer aided design (CAD 1970)Flexible manufacturing system (FMS 1975)Baldrige Quality Awards (1980)Computer integrated manufacturing (1990)Globalization(1992)Internet (1995)35Eli WhitneyBorn 1765; died 1825In 1798, received government contract to make 10,000 musketsShowed that machine tools could make standardized parts to exact specificationsMusket parts could be used in any musket© 1995 Corel Corp.36Frederick W. TaylorBorn 1856; died 1915Known as ‘father of scientific management’In 1881, as chief engineer for Midvale Steel, studied how tasks were doneBegan first motion & time studiesCreated efficiency principles© 1995 Corel Corp.37Taylor: Management Should Take More Responsibility forMatching employees to right jobProviding the proper trainingProviding proper work methods and toolsEstablishing legitimate incentives for work to be accomplished38Frank & Lillian GilbrethFrank (1868-1924); Lillian (1878-1972)Husband-and-wife engineering teamFurther developed work measurement methodsApplied efficiency methods to their home & 12 children! (Book & Movie: “Cheaper by the Dozen,” book: “Bells on Their Toes”)© 1995 Corel Corp.39Born 1863; died 1947In 1903, created Ford Motor CompanyIn 1913, first used moving assembly line to make Model TUnfinished product moved by conveyor past work stationPaid workers very well for 1911 ($5/day!)Henry Ford‘Make them all alike!’© 1995 Corel Corp.40W. Edwards DemingBorn 1900; died 1993Engineer & physicistCredited with teaching Japan quality control methods in post-WW2Used statistics to analyze processHis methods involve workers in decisions41Contributions FromHuman factorsIndustrial engineeringManagement scienceBiological sciencePhysical sciencesInformation science 42Significant Events in OMDivision of labor (Smith, 1776)Standardized parts (Whitney, 1800)Scientific management (Taylor, 1881)Coordinated assembly line (Ford 1913)Gantt charts (Gantt, 1916)Motion study (the Gilbreths, 1922)Quality control (Shewhart, 1924)43Significant Events - ContinuedCPM/PERT (Dupont, 1957) MRP (Orlicky, 1960)CADFlexible manufacturing systems (FMS)Manufacturing automation protocol (MAP)Computer integrated manufacturing (CIM)44New Challenges in OMLocal or national focusBatch shipmentsLow bid purchasingLengthy product developmentStandard productsJob specializationGlobal focusJust-in-timeSupply chain partneringRapid product development, alliancesMass customizationEmpowered employees, teams From To45Operations in the Service Sector46Characteristics of GoodsTangible productConsistent product definitionProduction usually separate from consumptionCan be inventoriedLow customer interaction© 1995 Corel Corp.47Characteristics of ServiceIntangible productProduced & consumed at same timeOften uniqueHigh customer interactionInconsistent product definitionOften knowledge-basedFrequently dispersed© 1995 Corel Corp.48Service EconomiesProportion of Employment in the Service Sector49Goods Versus ServicesCan be resoldCan be inventoriedSome aspects of quality measurableSelling is distinct from productionReselling unusualDifficult to inventoryQuality difficult to measureSelling is part of service Goods Service50Goods Versus Services - ContinuedProduct is transportableSite of facility important for costOften easy to automateRevenue generated primarily from tangible productProvider, not product is transportableSite of facility important for customer contactOften difficult to automateRevenue generated primarily from intangible service. Goods Service51Goods Contain Services / Services Contain Goods0255075100255075100AutomobileComputerInstalled CarpetingFast-food MealRestaurant MealAuto RepairHospital CareAdvertising AgencyInvestment ManagementConsulting ServiceCounselingPercent of Product that is a GoodPercent of Product that is a Service52Organizations in Each Sector – Table 1.4Service SectorExample% of all JobsProfessional services, education, legal, medicalNew York City PS108, Notre Dame University, San Diego Zoo24.3Trade (retail, wholesale)Walgreen’s, Wal-Mart, Nordstroms20.6Utilities, transportationPacific Gas & Electric, American Airlines, Santa Fe R.R, Roadway Express7.253Organizations in Each Sector – Table 1.4Service SectorExample% of all JobsBusiness & Repair ServicesSnelling & Snelling, Waste Management, Pitney-Bowes7.1Finance, Insurance, Real EstateCiticorp, American Express, Prudential, Aetna, Trammel Crow6.5Food, Lodging, EntertainmentMcDonald’s, Hard Rock Café, Motel 6, Hilton Hotels, Walt Disney Paramount Pictures5.2Public AdministrationU.S., State of Alabama, Cook County4.554Organizations in Each Sector – Table 1.4Manufacturing SectorExample% of all JobsGeneralGeneral Electric, Ford, U.S. Steel, Intel14.8ConstructionBechtel, McDermott7.0AgricultureKing Ranch2.4MiningHomestake Mining0.455Organizations in Each Sector – Table 1.4SummarySector% of all JobsService75.4%Manufacturing24.6%561850 75 1900 25 50 75 200040 50 60 701970 75 80 85 90 95 2000PercentUnited StatesCanadaFranceItalyBritainJapanW Germany19702000ServicesIndustryFarming25020015010050080%706050403020100U.S. Employment, % ShareServices as a Percent of GDPU.S. Exports of ServicesIn Billions of DollarsYear 2000 data is estimatedDevelopment of the Service Economy57Exciting New Challenges in Operations Management58Changing Challenges for the Operations Manager59Changing Challenges for the Operations Manager60The Productivity Challenge61The Economic System Transforms Inputs to OutputsThe economic system transforms inputs to outputs at about an annual 2.5% increase in productivity (capital 38% of 2.5%), labor (10% of 2.5%), management (52% of 2.5%)Land, Labor, Capital, ManagementGoods and ServicesFeedback loopInputsProcessOutputs62Typical Impact of Quality ImprovementParts per man hour95100105110115Year AYear BYear CCost per unit decreased$1.50$1.75$2.00$2.25Year AYear BYear CAverage worker's annual cash compensation increased24000250002600027000Year AYear BYear CAs productivity improved Costs were pared Wages increased63Measure of process improvementRepresents output relative to inputOnly through productivity increases can our standard of living improveProductivityProductivityUnits producedInput used= 64Multi-Product Productivity Productivity = Output Labor + material + energy + capital + miscellaneous65Measurement ProblemsQuality may change while the quantity of inputs and outputs remains constantExternal elements may cause an increase or decrease in productivityPrecise units of measure may be lacking66Productivity VariablesLabor - contributes about 10% of the annual increaseCapital - contributes about 32% of the annual increaseManagement - contributes about 52% of the annual increase67Key Variables for Improved Labor ProductivityBasic education appropriate for the labor forceDiet of the labor forceSocial overhead that makes labor availableMaintaining and enhancing skills in the midst of rapidly changing technology and knowledge68Jobs in the U.S69Comparison of Productivity70Investment and Productivity in Selected Nations71Service ProductivityTypically labor intensiveFrequently individually processedOften an intellectual task performed by professionalsOften difficult to mechanizeOften difficult to evaluate for quality72The Challenge of Social ResponsibilityIncreasing emphasis on business and social responsibility73