IOMP Lec 2 PDF

**INDUSTRIAL OPERATIONS and MANAGEMENT PRACTICES [Operations Planning and Control ]** Objective: To [maximize customer service], [minimize inventory investment], [maximize system operating efficiency]. [What is customer service? ] This is the provision of service to customers before, during and a...

**INDUSTRIAL OPERATIONS and MANAGEMENT PRACTICES [Operations Planning and Control ]** Objective: To [maximize customer service], [minimize inventory investment], [maximize system operating efficiency]. [What is customer service? ] This is the provision of service to customers before, during and after the purchase. The perception of success of such interactions is dependent on employees "who can adjust themselves to the personality of the guest". (Ref. Wikipedia) [5 Ways to Deliver Excellent Customer Service ] 1\. Respond as quickly as possible! One of the biggest factors in good customer service is speed, especially when a client is requesting something that's time sensitive. Make sure you don't leave customers waiting. 2\. Know your customer Great interactions begin with knowing your customers wants and needs. [Customers love personalization]. Get to know your customers, remember their names and previous conversations. If needed, make a note of what was discussed previously so you can refer to it the next time you meet. 3\. Fix your mistakes Not taking responsibility of your mistakes is a sure fire way to getting a bad reputation. Transparency is important in business and customer service is no different. Always strive for a high quality output as it shows you have a high level of standards. 4\. Go the extra mile Going the extra mile will not only result in an indebted and happy customer, it can also go a long way in terms of keeping yourself on their radar for future business. How\'s that for [appreciating your customers]? 5\. Think long term -- A customer is for life. Think long term when dealing with customers. By keeping customers happy, they will be loyal and through word of mouth, will do the marketing for you. In fact, according to author [Pete Blackshaw], a satisfied customer tells at least three friends (whereas an angry customer tells 3,000!) 1 [What is inventory investment? ] Inventory investment is just like the same where companies intentionally make stocks of such raw material/Items, whom prices are expected to increase in the the coming period. (Reference: quora.com, Tarun Kumar, March 15. 2018) [Four Main Reasons for Holding Inventories ] 1\. Intertemporal production smoothing Most firms find it convenient to maintain a steady level of production even in the face of fluctuating demand. When sales are low, a firm is left with unsold stocks which are put into inventory. When sales are high, the firm first reduces its inventories. So its produces less than its sales level. This motive for holding inventories is known as smoothing out of the level of production over time. 2\. Inventories as productive capital Inventory holding of raw materials is necessary to avoid temporary suspension of production. Thus, the volume of output which a firm can produce depends on the stock of inventories its holds. 3\. Stock-out avoidance Inventory of finished goods is held to avoid loss of potential profit. So inventories are held to avoid running out of stocks in a period of unexpectedly high demand. If demand exceeds production and there are no inventories, some business is lost to rivals. 4\. Linked processes In case of production systems involving several linked process inventories act as the balancing factor and not just as a buffer stock. In such industries unless certain components and spare parts are produced, the next stages of the production process cannot start. 2 [What is system operating efficiency? ] Operational efficiency is the capability of an [enterprise] to deliver products or services to its customers in the most cost-effective manner possible while still ensuring the high quality of its products, service and support. [10 Steps to Improve Operational Efficiency ] 1\. Know your operation Managers often overlook the value of regularly walking the floor to evaluate areas that are labor-intensive or where traffic may be congested. 2\. Train, train and train again Regular training (and cross-training) on systems and processes is critical to running efficient operations for associates and management alike. 3\. Put people first To train, grow and retain employees, never forget that it's still a people centric business where relationships are important. 4\. Keep an order fulfillment focus Your goal is to create an environment that helps pickers perform at their best. 5\. Improve customer service It's a service-oriented industry, and even the smallest of details can make a measurable difference. 6\. Remove barriers to success Perform process analysis to track problems and identify opportunities for improvements. 7\. Raise the bar Even after you've made improvements, it's important to not settle for a new status quo. Instead, always strive to incrementally improve results and raise the productivity of low-performing associates. 8\. Review processes 3 Once in place, these can be evaluated and updated for continual process improvement, or entirely rebuilt to incorporate new work flows or automation. 9\. Benchmark against your peers Engaging with your vendors and suppliers gives them opportunities to add value to your operations. 10\. Assess the power of your system Conduct a technology review. Then familiarize what offerings are available in the marketplace and decide if an upgrade is necessary. **What is OPERATIONS PLANNING AND CONTROL?** **Operational planning and control** decisions involve scheduling and **control** of human resources, materials, and financial input to produce the desired quantity and quality of output most efficiently. **Operational planning and control** are based on forecasts of future demand for the output of the system. **What is SCHEDULING?** *Scheduling* is the process of arranging, controlling and optimizing work and workloads in a production process or manufacturing process. Scheduling is used to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials. [Wikipedia] *Scheduling* is the art of planning your activities so that you can achieve your goals and priorities in the time you have available. **HOW TO DO SCHEDULING?** Step 1: Identify Available Time Step 2: Schedule Essential Actions Step 3: Schedule High-Priority Activities Step 4: Schedule Contingency Time Step 5: Schedule Discretionary Time 4 Step 6: Analyze Your Activities [What is Detailed Scheduling? ] Determining the resources and date or time for carrying out operations. Basic detailed scheduling activities are: Scheduling -- dispatching operations to resources at a specific time or date. Rescheduling -- dispatching already scheduled operations to a different date or time or to different resources. Deallocating -- removing scheduled operations from the resource schedule. (Reference: help.sap.com) [The Importance of Scheduling ] Understand what you can realistically achieve with your time. Make sure you have enough time for essential tasks. Add contingency time for \"the unexpected.\" Avoid taking on more than you can handle. Work steadily toward your personal and career goals. Have enough time for family and friends, exercise and hobbies. Achieve a good work-life balance. **ORGANIZING HUMAN and CAPITAL RESOURCE** Every strategy must have an "owner" (somebody has to be responsible for that strategies implementation. If someone is not made responsible for the strategy, it is highly likely that it will not be implemented. This is why you have to allocate human resources. Organizing is one function of management that involves developing an [organizational structure] and [allocating human resources] to ensure the accomplishment of objectives. This also includes the [design of individual jobs] within the organization. [Organizational Structure ] This is the arrangement and interrelationship of the component parts and positions of a company. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the *chain of command within an organization.* 5 THE ORGANIZATIONAL STRUCTURE Elements of Organizational Structure 1\. Specialization of activities refers to the specification of individual and group work tasks throughout the organization and the aggregation of these tasks into work units. 2\. Standardization of activities refers to the procedures used by the organization to ensure the predictability of its activities. To make uniform and consistent. 3\. Coordination of activities refers to the procedures that integrate the functions of subunits within the organization. 4\. Centralization and decentralization of decision making. refers to the location of decision-making power. [The Organizational Chart ] This shows the organizational structure. This diagrams the functions, departments, or positions of the organization and shows how they are related. [Allocating Human Resources ] Human resources are an integral part of most projects. The [project team] has needs that require active [management], like: A satisfying work environment that does not involve conflicts with other team members. Making an important contribution to the project, and/or greater society. Leaving the project with something more than they started with, for example additional knowledge or skills, or a strong resume/CV entry that results in a better chance at future work. [Design of Individual Jobs ] Decisions made about the nature of jobs within the organization are generally called "job design" decisions. 6 Decisions made about the nature of jobs within the organization are generally called "job design" decisions. Organizing at the level of a particular job involves how best to **design individual jobs** to most effectively use human resources. **Job design** was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. Many jobs are now designed based on such principles as **empowerment**, **job enrichment** and **teamwork**. [Production Plan ] Concerned with the determination, acquisition and arrangement of all facilities necessary for future operations. 7 Why need a Production Plan? 1\. Effective utilization of resources. 2\. Steady flow of production. 3\. Improves labor productivity. 4\. Provides a better work environment. (Reference: Kalyan City Life by: Gaurav Akrani, January 03, 2012) [Material Requirements Planning ] is a system for calculating the **materials** and components needed to manufacture a product. Three primary steps: 1\. taking inventory 2\. identifying additional needed materials 3\. scheduling the production or purchase (Reference: [https://searcherp.techtarget.com]) **INVENTORY PLANNING AND CONTROL** Inventory includes: raw materials work in process finished goods supplies Inventory decision rules specify when to order materials and how to order them. Associated Costs in Inventories: storage theft breakage transport cost investment How to manage inventories? A. Just-in-Time Inventory B. Quality Control 8 A. Just-in-Time Inventory (*Kanban* in Japanese) This is an ideal state in which [production quantities are equal to] [delivery quantities. ] Materials are bought more frequently and in smaller amounts, "just in time" to be used. Finished goods are produced and delivered "just in time" to be sold. B. Quality Control Managers make two kinds of quality-control decisions: 1\. **Strategic decisions** set the level of quality for the output of the organization. includes: product design, training of personnel selection and maintenance of equipment reward system [Product Design] is commonly defined as the holistic approach of building a new **product** from start to finish. This encompasses everything from doing market research, identifying problems, **product development**, **designing** informed solutions---and everything in between. Jan 30, 2019 **Steps:** Idea Creation -- process of developing new concepts to create a product. Product Feasibility -- determining whether the product can actually be manufactured as well as whether or not it can be made profitably. Product Testing -- after prototyping, this involves having people actually use the product to determine if it actually works as well as making suggestions for changes and/or improvements. [Training of Personnel ] Training of personnel is important to refresh and enhance the skills of 9 your workers. This will also give additional knowledge for them to continuously improve their performance. This can be done quarterly or semi annually or annually, depends on the budget of the company and availability of the workers. [Selection of Maintenance and Equipment ] Involves **selecting** the right care and repair methodologies that maximize **equipment** life and performance for the least cost to the user. **Equipment maintenance** is any process used to keep a business\'s **equipment** in reliable working order. It may include routine up keep as well as corrective **repair** work. (https://www.onupkeep.com) [Reward System ] Employee **reward systems** refer to programs set up by a company to **reward** performance and motivate employees on individual and/or group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the company. Types of rewards: Intrinsic Rewards and Extrinsic Rewards. Intrinsic - These rewards consist of having a pride on work, having a feeling of accomplishment, or being a part of team etc. Extrinsic - These rewards are provided in term of money and fringe benefits. Financial Rewards and Non-Financial Rewards. Performance Based Rewards and Membership Based Rewards. (Reference: accountlearning.blogspot.com, Accounting Management) (Reference: study.com) 2\. **Tactical decisions** -- day-to-day decisions concerned with matters. includes: Ex. inspection of output (reject or approved) 10 Prepared by: Asst. Prof. Celerina R. Teodosio Faculty REFERENCES: Wikipedia Tarun Kumar, March 15, 2018, "Inventory Investment," quora.com MindTools Content Team, "Effective Scheduling," Emerald Works help.sap.com Steven MacDonald, June 9, 2020, "5 Ways to Deliver Excellent Customer Service," SuperOffice Diptimai Karmakar, "Inventory Investment: Subject Matter, Reasons and Model," economicsdiscussion.net Honeywell Intelligrated, "10 Steps to Improve Operational Efficiency," August 13, 2019, Jon Hartney, July 05, 2019, "The 6 Steps of Resource Allocation," Project Engineer Libraries, "Planning, Organizing, Leading, and Controlling," U.S. Department of Transportation, March 03, 2020, "Organizing and Planning for Operations -- Performance Measures and System Monitoring," Federal Highway Administration 11