IEP101 Operations Management PDF

IEP101 OVERVIEW OF OPERATIONS Inventory- is the stock or store of any items or MANAGEMENT resources used in an organization. Operations Management- the design, Inventory Management- managing the stock or ope...

IEP101 OVERVIEW OF OPERATIONS Inventory- is the stock or store of any items or MANAGEMENT resources used in an organization. Operations Management- the design, Inventory Management- managing the stock or operation, and improvement of the systems store of any items or resources used in an that create and deliver the firm’s primary organization to achieve satisfactory levels of products and services. customer service while keeping the costs OM involves the transformation of resources: associated to its minimum. Labor + Materials + Capital = Goods and services Objective: “inventory proportionality” Inventory Proportionality- to have the same number of days or hours' worth of inventory on hand across all products so that the time of run- out of all products would be simultaneous, hence, no “excess inventory”. Inventory minimization- keeping inventory within reasonable bounds. Production System- framework that helps to Key Concepts of Inventory Management convert inputs into desired outputs in the form Economic Order Quantity (EOQ)- the quantity of of goods and services through the systematic stock that minimizes the total cost of ordering organization of people, materials, and processes and holding inventory. It balances order costs (Heizer, Render, and Munson, 2020) with inventory holding costs. PRODUCTION PLANNING AND CONTROL (PPC)- Ordering Costs- associated with costs of is a tool to coordinate all manufacturing placing order and receiving goods activities in a production system. (supplies, forms, order processing, - “The highest efficiency in production is obtained clerical support, etc.) by manufacturing the required quality of Holding Costs- costs for storage, product, of required quantity, at the required handling, insurance, obsolescence, extra time by the best and cheapest method.” staffing, interest, pilferage, damage, warehousing, etc. Economic Order Quantity (EOQ) EOQ = √(2DS / H) Where: D = Annual demand S = Cost per order H = Holding/Carrying cost jpogii_ cool pal IEP101 Example: Safety Stock- additional inventory held as a ABC Manufacturing uses 10,000 units of a buffer against unexpected demand fluctuations particular raw material annually. The company or supply chain disruptions. incurs an order cost of $50 per order and a holding cost of $2 per unit per year. The supplier ABC Analysis- a classification method for takes 5 days to deliver an order, and the company inventory based on value. operates 250 days a year. Calculate the EOQ. A-items are high-value but low-quantity products. EOQ = √(2DS / H) B-items are moderate in both value and D = 10, 000 units quantity. S = $50 C-items are low-value but high-quantity H = $2 products. EOQ = √[(2)(10000)(50) / (2)] Facilities Planning Facility Layout EOQ= 707.11 or 707 Location or arrangement of everything within & around buildings Reorder Point (ROP)- the inventory level at Ensures best placement of machines which a new order should be placed to avoid (production), offices and desks (in office), or stockouts. service centers (hospitals and department stores). ROP- Daily Demand x Lead Time Specific objectives are to maximize Customer satisfaction Example: ABC Manufacturing uses 10,000 units Utilization of space, equipment, & of a particular raw material annually. The people company incurs an order cost of $50 per order Efficient flow of information, material, & and a holding cost of $2 per unit per year. The people supplier takes 5 days to deliver an order, and the Employee morale & safety company operates 250 days a year. Calculate the EOQ. Common Types of Layout Fixed-position layout- addresses lay-out ROP = [(10,000/250 )x 5] requirements of large bulky projects ROP = (40 x 5) such as ships and buildings. ROP = 200 Process layout- deals with low-volume, Therefore, The company should order 707 units high-variety production (job shop, every time the inventory level drops to 200 units intermittent production). to minimize total costs while avoiding stockouts. jpogii_ cool pal IEP101 Product layout- seeks the best personnel integrity and avoid disruptions (Kroenke and machine use in repetitive or & Boyle, 2023) continuous production. People- IEs, operators, IT staff, and other personnel make up the human OVERVIEW OF INFORMATION SYSTEMS aspect of information systems. Information Systems Types of Information Systems in IE Systems consist of components that Transaction Processing Systems (TPS)- manage collect, store, and disseminate routine transactions, such as inventory records information. and order processing. These systems support industrial - These systems automate data collection, engineers in decision-making, strategic reducing human errors and improving data planning, and problem-solving. consistency, which is essential for inventory An information system generally control and tracking in industrial settings (Heizer includes hardware, software, data, et al., 2022) procedures, and people involved in data collection, processing, and reporting. Enterprise Resource Planning (ERP)- ERP (Stair & Reynolds, 2021) systems help create a unified view of processes, enabling engineers to streamline production, Core Components of Information Systems minimize waste, and ensure efficient resource Hardware- physical components like utilization (Monk & Wagner, 2020). computers, servers, and networking devices enable data storage, processing, Decision Support Systems (DSS)- these systems and communication. are especially valuable in scenario analysis and Software- facilitates managing what-if simulations, helping engineers identify information across multiple industrial potential bottlenecks, plan production functions, including production schedules, and optimize workflows (Stair & planning, inventory management, and Reynolds, 2021). quality control. Data- the core of any information Applications of Infomation Systems (IS) in IE system. Quality of decisions depends on Inventory and Supply Chain data accuracy, consistency, and Management timeliness. Workforce Management and Scheduling Process- for using hardware and Process Optimization software effectively. In guidelines Quality Control and Assurance industrial environments, clear procedures are essential for data handling, ensuring that personnel follow specific protocols to maintain system jpogii_ cool pal IEP101 Gathering and analyzing data Drawing conclusions Future Trends: Cloud-Based Platforms AI in Procurement: Academic research adheres to rigorous Speed analytics standards to ensure: Automation of Manual Tasks Reliability Risk Identification Validity Contract Management Replicability Chatbots Typology of Research 1. Basic Research 2. Applied Research ❖ Problem-Oriented Research ❖ Problem-Solving Research 3. Quantitative Research 4. Qualitative Research ❖ Phenomenology ❖ Ethnography ❖ Case study ❖ Grounded Theory ❖ Historical Research Basic Research vs. Applied Research Objective Basic Research: Expand foundational knowledge. Applied Research: Solve specific, actual problems. OVERVIEW OF METHODS OF RESEARCH AND FEASIBILITY STUDY Focus Scientific research- is a structured process of Basic Research: Theory and understanding. inquiry aimed at discovering, interpreting, and Applied Research: Practical application. revising knowledge about the natural or social world. Impact In academic context, it follows a systematic Basic Research: Long-term, direct benefits. approach that includes: Applied Research: Short-term, direct benefits. Defining a problem Conducting a literature review Formulating hypotheses jpogii_ cool pal IEP101 Outcome Examples Basic Research: Knowledge and principle. Quantitative Research: Measuring customer Applied Research: New technologies, products satisfaction with a rating scale or methods. Qualitative Research: Exploring customer experiences through interviews. Examples Basic Research: Particle physics, cognitive Problem Identification psychology studies. begins with identifying a specific Applied Research: Drug development, problem or question sustainable agriculture. may stem from gaps in the existing literature, real- world challenges, or Quantitative Research vs. Qualitative Research theoretical inquiries research question should be clear, Objective focused, and achievable within the Quantitative Research: Measure and analyze scope of the study relationships, test hypotheses. Literature Review Qualitative Research: Explore and understand behaviors, experiences, or phenomena. research on the topic to establish a surveys existing background, show gaps Data Type in the field, and justify the need for the Quantitative Research: Numerical data. new study Qualitative Research: Non-numerical data. involves identifying relevant theories, methodologies, and findings that relate Analysis to the research question Quantitative Research: Statistical, often using Data Collection software. Qualitative Research: Thematic, narrative, or may be quantitative (numerical) or content analysis. qualitative (descriptive) depending on the research design, data Outcome collection techniques may include Quantitative Research: Generalizable findings, surveys, experiments, observations, predictions. interviews, or case studies Qualitative Research: In-depth understanding, rich descriptions. Data Analysis involves interpreting the data to answer the research question or test the hypothesis jpogii_ cool pal IEP101 quantitative data often require statistical APA - American Psychological analysis, while qualitative data may be Association analyzed through thematic coding or MLA - Modern Language Association narrative analysis. IEEE - Institute of Electrical and ensures that findings are accurate, Electronics Engineers objective, and relevant to the research Importance of Scientific Research question Advances knowledge and innovation Results Promotes lifelong learning and presents the findings, often with development supporting tables, figures, or graphs Informs policy and decision-making should be clear and precise, highlighting Supports evidence-based practices the key data points without Enhances critical thinking and analytical interpretation, as interpretation occurs skills in the discussion section Constraints for a researcher Time Discussion Money interprets the findings, comparing them Patience to previous research and considering theoretical implications should address whether the results OVERVIEW OF SUPPLY CHAIN support the hypothesis and discuss MANAGEMENT potential limitations, recommendations for future research, and practical Supply Chain- flow of products and services applications from suppliers, manufacturers, distributors, retailers, to customers. Conclusion and Recommendation Supply chain is connected through transportation, information, and exchange of A brief summary of the main findings, funds. conclusions, and implications of the research, along with suggestions for future work or In order to maximize supply chain surplus, every unresolved questions. facility that impacts costs needs to be considered: References Suppliers’ suppliers (ex. raw material providers The research paper must cite all the sources or component manufacturers. They affect input consulted during the literature review and costs) throughout the paper, adhering to a specific citation style (e.g., APA, MLA, IEEE). jpogii_ cool pal IEP101 Customers’ customers (ex. distributors, Supply Chain Management retailers, and end-users. They determine the -Involves the management of supply chain value and demand for the product.) assets and products, information, and fund flows Efficiency throughout the supply chain network to maximize total supply chain surplus. is required using a network level approach. -“Managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer.” (-The Supply Chain Council) -“The design and management of seamless, value-added process across organizational boundaries to meet the real needs of the end customer.” (-Institute for Supply Management) The Networked Enterprise is the new business -Getting the right things to the right places, at model for the 21st century. It requires a supply the right times, for profit. chain training partner operating model that Collaboration is an important part of supports the interoperability and visibility with effective supply chain management. reduced complexity. (Ann Grackin, ChainLink Management of relationships in order Research) to enchance value and reduce cost. Supply Chain: Network-Level Approach Interoperability- can involve the integration of Evolution of SCM various information systems, processes, and technologies across different companies or Mass production era (1900s – 1970s): In the departments within supply chain. early 1900s, Henry Ford created the first moving assembly linereducing the time to build a Model Visibility- ability to track and monitor all T from 728 hours to 1.5 hours. components of the supply chain, from raw to finished goods, as they move through the supply Lean manufacturing era (1970s –1995): In the chain. early 1970s, Japanese manufacturers like Toyota changed the rules of production from mass to Reduced Complexity- simplifying processes, lean. Lean manufacturing focuses on flexibility reducing the number of steps or intermediaries, and quality more than on efficiency and and eliminating unnecessary or redundant quantity. operations. Mass customization era (1995 – 2010): Beginning around 1995 and coinciding with the commercial application of the Internet, jpogii_ cool pal IEP101 manufacturers started to mass-produce Key Decisions: which suppliers to use, terms of customized products. Henry Ford’s famous contracts, and supplier collaboration strategies statement “You can have any color Model T as long as it’s black” no longer applies. Inventory The raw materials, work-in-progress, and Drivers of Supply Chain finished goods that a company holds. Inventory management balances the costs of holding Facilities inventory against the need to meet customer The locations where products are demand. manufactured, stored, or assembled. The number, size, and location of facilities Examples: safety stock, cycle inventory, seasonal significantly impact the supply chain's efficiency. inventory Key Decisions: How much inventory to hold and Examples: factories, warehouses, and where to store it? distribution centers Key Decisions: location, capacity, and operations Transportation management The movement of products between different stages in the supply chain. The choice of Information transportation mode affects costs, speed, and Data and analysis that support supply chain flexibility. operations. Accurate, timely information enables better decision-making and coordination Examples: shipping, trucking, rail, and air freight across the supply chain. Key Decisions: mode of transportation, routing, and scheduling Examples: demand forecasting, order tracking, and inventory management systems Pricing Key Decisions: information technology systems The strategies used to price products and and data management strategies services in the market. Pricing decisions can influence demand and the efficiency of the Sourcing supply chain. The process of selecting suppliers and managing supplier relationships. Effective sourcing Examples: discounts, rebates, and dynamic ensures the supply chain has access to high- pricing models quality materials at the right cost. Key Decisions: pricing strategies, discount policies, and payment terms Examples: supplier selection, contract negotiation, and supplier performance management jpogii_ cool pal IEP101 OVERVIEW OF SYSTEMS ENGINEERING Systems Engineering -a methodical, multi-disciplinary approach for the design, realization, technical management, operations, and retirement of a system (NASA, 2007) -An interdisciplinary approach and means to enable the realization of successful systems. It Key Objectives of Systems Engineering focuses on defining customer needs and Define and understand the scope and required functionality early in the development requirements of a system. cycle, documenting requirements, then Design a system that meets specified proceeding with design synthesis and system requirements while remaining feasible validation while considering the complete and cost-effective. problem [International Council on Systems Integrate different subsystems and Engineering (INCOSE), 2015] manage their interactions. Oversee the entire system’s lifecycle from concept to disposal. Improve and optimize systems with respect to performance, reliability, and sustainability. Core Concepts of Systems Engineering Planning and Analysis Gather all valuable information from stakeholders and analyze this information what will be feasible. Design Create design specification, features, and operations that will satisfy the functional requirements of the proposed system which will be in place. jpogii_ cool pal IEP101 Coding Building the software using a programming language. Testing and integration Release the application to a testing environment. Test all area of the application to spot any defects, bugs or other problems. Deployment The software is made available to users, and any final adjustments are made to align with agreed Current Trends in Systems Engineering goals and specifications. Digital Transformation and Industry 4.0 Maintenance The integration of digital technologies, such as Updating and supporting the software after it IoT, big data, and AI, has revolutionized SE, has been delivered to the market. allowing for real-time monitoring, predictive maintenance, and smart decision-making. Systems engineers are increasingly involved in Systems Thinking designing cyber-physical systems that are resilient, adaptable, and scalable. Holistic Approach- looking at the whole system than individual components. Sustainable Systems Engineering Interdisciplinary Collaboration- requires Designing systems that minimize environmental collaboration across engineering, management, impact, utilize renewable resources, and and social sciences to address complex, multi- promote circular economy practices. faceted issues. Artificial Intelligence in Systems Feedback Loops- recognizes the importance of Engineering continuous feedback to refine and improve Enabling data-driven decision-making, system operations. predictive maintenance, and process Model-Based Systems Engineering- a formalized optimization methodology that is used to support the Resilient Systems Design requirements, design, analysis, verification, and validation associated with the development of Focuses on designing systems that can quickly complex systems. adapt to and recover from disruptions, particularly in the context of supply chain resilience, cybersecurity, and critical infrastructure. jpogii_ cool pal IEP101 Human-Centered Systems Engineering o Risk Matrix. o Monte Carlo simulations. Incorporates user-centered design principles to ensure systems are intuitive, accessible, and 4. Trade-Off Analysis align with human needs. Purpose: Evaluating and balancing different solutions. Description: Helps choose the best-fit Systems Engineering: Methodologies and Tools solution by analyzing trade-offs between 1. Functional Analysis performance, cost, and risk. Common Tools Used: Purpose: Identifying and mapping o Decision matrices. system functions. o Pareto analysis. Description: Breaks down the system's functions to meet requirements and 5. Optimization Techniques understand the operational goals. Purpose: Achieving the most efficient Common Tools Used: solution under constraints. o Function Flow Block Diagram Description: Methods for improving (FFBD). system performance and efficiency while o N-squared diagrams. adhering to specific constraints. 2. Reliability Engineering Common Tools Used: o Linear programming. Purpose: Ensuring robust performance o Simulation-based optimization. and minimizing system downtime. Description: Analyzes system reliability to ensure consistent performance and minimize potential failures. Common Tools Used: o Fault Tree Analysis (FTA). o Failure Mode and Effects Analysis (FMEA). 3. Risk Management Purpose: Identifying and mitigating project risks. Description: Systematic approach to identify, assess, and control risks to minimize their impact on the project. Common Tools Used: jpogii_ cool pal