heizer_om13_ch01.pptx
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Operations and Productivity 1 PowerPoint presentation to accompany Heizer, Render, Munson Operations Management, Thirteenth Edition, Global Edition Principles of Operations Management, Eleventh Edition PowerPoint slides by Jeff Heyl Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-1 Le...
Operations and Productivity 1 PowerPoint presentation to accompany Heizer, Render, Munson Operations Management, Thirteenth Edition, Global Edition Principles of Operations Management, Eleventh Edition PowerPoint slides by Jeff Heyl Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-1 Learning Objectives When you complete this chapter you should be able to: 1.1 Define operations management 1.2 Identify the 10 strategic decisions of operations management 1.3 Identify career opportunities in operations management 1.4 Explain the distinction between goods and services Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-2 Learning Objectives When you complete this chapter you should be able to: 1.5 Explain the difference between production and productivity 1.6 Compute single-factor productivity 1.7 Compute multifactor productivity 1.8 Identify the critical variables in enhancing productivity Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-3 What Is Operations Management? Production is the creation of goods and services Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-4 Organizing to Produce Goods and Services ▶ Essential functions: 1. Marketing – generates demand 2. Production/operations – creates the product 3. Finance/accounting – tracks how well the organization is doing, pays bills, collects the money Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-5 Organization Charts Figure 1.1 Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-6 Organization Charts Figure 1.1 Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-7 Organization Charts Figure 1.1 Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1-8 The Supply Chain ▶ A global network of organizations and activities that supplies a firm with goods and services ▶ Members of the supply chain collaborate to achieve high levels of customer satisfaction, efficiency and competitive advantage Figure 1.2 Farmer Syrup producer Bottler Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Distributor Retailer 1-9 Why Study OM? 1. OM is one of three major functions of any organization; we want to study how people organize themselves for productive enterprise 2. We want (and need) to know how goods and services are produced 3. We want to understand what operations managers do 4. OM is such a costly part of an organization Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 10 What Operations Managers Do Basic Management Functions ▶ Planning ▶ Organizing ▶ Staffing ▶ Leading ▶ Controlling Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 11 Ten Strategic Decisions TABLE 1.2 DECISION CHAPTER(S) 1. Design of goods and services 5, Supplement 5 2. Managing quality 6, Supplement 6 3. Process and capacity strategy 7, Supplement 7 4. Location strategy 8 5. Layout strategy 9 6. Human resources and job design 10 7. Supply-chain management 11, Supplement 11 8. Inventory management 12, 14, 16 9. Scheduling 13, 15 10. Maintenance Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 17 1 - 12 The Strategic Decisions 1. Design of goods and services ▶ Defines what is required of operations ▶ Product design determines cost, quality, sustainability and human resources 2. Managing quality ▶ Determine the customer’s quality expectations ▶ Establish policies and procedures to identify and achieve that quality Table 1.2 (cont.) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 13 The Strategic Decisions 3. Process and capacity design ▶ How is a good or service produced? ▶ Commits management to specific technology, quality, human resources, and investments 4. Location strategy ▶ Nearness to customers, suppliers, and talent ▶ Considering costs, infrastructure, logistics, and government Table 1.2 (cont.) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 14 The Strategic Decisions 5. Layout strategy ▶ Integrate capacity needs, personnel levels, technology, and inventory ▶ Determine the efficient flow of materials, people, and information 6. Human resources and job design ▶ Recruit, motivate, and retain personnel with the required talent and skills ▶ Integral and expensive part of the total system design Table 1.2 (cont.) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 15 The Strategic Decisions 7. Supply chain management ▶ Integrate supply chain into the firm’s strategy ▶ Determine what is to be purchased, from whom, and under what conditions 8. Inventory management ▶ Inventory ordering and holding decisions ▶ Optimize considering customer satisfaction, supplier capability, and production schedules Table 1.2 (cont.) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 16 The Strategic Decisions 9. Scheduling ▶ Determine and implement intermediateand short-term schedules ▶ Utilize personnel and facilities while meeting customer demands 10. Maintenance ▶ Consider facility capacity, production demands, and personnel ▶ Maintain a reliable and stable process Table 1.2 (cont.) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 17 Where are the OM Jobs? ▶ Introducing new technologies and methods ▶ Improving facility location and space utilization ▶ Defining and implementing operations strategy ▶ Improving response time ▶ Developing people and teams ▶ Improving customer service ▶ Managing quality ▶ Managing and controlling inventory ▶ Enhancing productivity Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 18 Significant Events in OM Figure 1.4 Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 19 Eli Whitney ▶ Born 1765; died 1825 ▶ In 1798, received government contract to make 10,000 muskets ▶ Showed that machine tools could make standardized parts to exact specifications ▶ Musket parts could be used in any musket Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 20 Frederick W. Taylor ▶ Born 1856; died 1915 ▶ Known as ‘father of scientific management’ ▶ In 1881, as chief engineer for Midvale Steel, studied how tasks were done ▶ Began first motion and time studies ▶ Created efficiency principles Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 21 Taylor’s Principles Management Should Take More Responsibility for: 1. Matching employees to right job 2. Providing the proper training 3. Providing proper work methods and tools 4. Establishing legitimate incentives for work to be accomplished Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 22 Frank and Lillian Gilbreth ▶ Frank (1868-1924); Lillian (1878-1972) ▶ Husband and wife engineering team ▶ Further developed work measurement methods ▶ Applied efficiency methods to their home and 12 children! ▶ Book and Movie: “Cheaper by the Dozen,” “Bells on Their Toes” Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 23 Henry Ford ▶ Born 1863; died 1947 ▶ In 1903, created Ford Motor Company ▶ In 1913, first used moving assembly line to make Model T ▶ Unfinished product moved by conveyor past work station ▶ Paid workers very well for 1911 ($5/day!) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 24 W. Edwards Deming ▶ Born 1900; died 1993 ▶ Engineer and physicist ▶ Credited with teaching Japan quality control methods in post-WW2 ▶ Used statistics to analyze process ▶ His methods involve workers in decisions Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 25 Operations for Goods and Services Services – Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services) Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 26 Productivity Challenge Productivity is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital) The objective is to improve productivity! Important Note! Production is a measure of output only and not a measure of efficiency Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 27 Measurement Problems 1. Quality may change while the quantity of inputs and outputs remains constant 2. External elements may cause an increase or decrease in productivity 3. Precise units of measure may be lacking Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 28 Productivity Variables 1. Labor - contributes about 10% of the annual increase 2. Capital - contributes about 38% of the annual increase 3. Management contributes about 52% of the annual increase Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 29 Key Variables for Improved Labor Productivity 1. Basic education appropriate for the labor force 2. Diet of the labor force 3. Social overhead that makes labor available ▶ Challenge is in maintaining and enhancing skills in the midst of rapidly changing technology and knowledge Copyright © 2020 Pearson Education Ltd. All Rights Reserved. 1 - 30
