Operations Management Reviewer PDF

OPERATIONS MANAGEMENT ***HISTORY*** [1450 BC] - Egyptian wall paintings showed evidence of **measurement and inspection** - Pyramid stones were cut so precise [1046BC -- 256BC] - ZHOU DYNASTY - There were specific governmental departments for [production, inventory, distributi...

OPERATIONS MANAGEMENT ***HISTORY*** [1450 BC] - Egyptian wall paintings showed evidence of **measurement and inspection** - Pyramid stones were cut so precise [1046BC -- 256BC] - ZHOU DYNASTY - There were specific governmental departments for [production, inventory, distribution] - There was a highlight in supervision and inspection [Europe] - Craftsperson served as manufacturer and inspector [Industrial Revolution (Mid 18^th^ Century)] - **Honore Blanc** developed a system for manufacturing muskets using a standard pattern - **Thomas Jefferson** brought the idea to America - **Eli Whitley** was awarded a 2 year contract to supply 10,000 muskets in the US [Second Industrial Revolution] - **Fredrick W. Taylor** introduced the principles of Scientific Management - **Henry Ford Sr.** developed "TOTAL QUALITY PRACTICES" which was discovered until they visited Japan - **Western Electric/Bell Telephone Laboratories** developed new theories and methods of inspection for improving and maintaining quality. - **Walter** Sheward developed "STATISTICAL QUALITY CONTROL" - **American Society for Quality Control** was founded to develop, promote, and apply quality concepts [1950's (Post World War)] - **Armand Feigenbaum** recognized the importance of organizational approach to quality - **Joseph Juran and Dr. W. Edwards** introduced SQC to the Japanese - **Kaizen** which is a culture of continuous improvement was adopted by top managers [1960's] - **Kauro Ishikawa** introduced the - SEVEN TOOLS OF QUALITY CONTROL - QUALITY CIRCLES - FISHBONE DIAGRAM [1970 -- 1980] - In **1979, Philip Crosby** published the book "QUALITY IS FREE" - There was an [awareness in quality] - Government intervened through regulations and recalls - "Let the buyer beware" became "Let the producer beware" - NBC Televised a program "If Japan Can...Why Can't We?" which revealed [Dr. W. Deming's role in Japanese Quality] - [October] was deemed the "NATIONAL QUALITY MONTH" - [NASA] announced an "EXCELLENCE AWARD FOR QUALITY AND PRODUCTIVITY" - [Motorola] introduced the concept of "SIX SIGMA" - was the first issue of ISO 9000 - Florida Power & Light won the Deming Prize for quality which was the first non-Japanese company to win **QUALITY** - Dynamic state wherein the products, services, processes, people [meet or exceeds customer expectations] - **Total Quality** broader concept that encompasses the quality of people, processes and the results. [Elements] - Customer Focus - Long-term Commitment - Continual Process Improvement **PHILOSOPHIES** [Dr. Kaoru Ishikawa] - His skill in mobilizing large groups of people towards a goal contributed to Japan's quality initiatives - Translated concepts of Dr. W Edwards & Joseph M. Juran into Japanese system *Beliefs* - People at all levels should use simple methods and work together to solve problems *Contributions* - Continued customer service - importance of maintaining customer relationships beyond the initial sale - Seven Basic Quality Tools - help teams analyze data, identify problems, and implement effective solutions. - Cause & Effect Diagram - identify and analyze the root causes of a problem - Quality circles - small groups of employees who meet regularly to discuss workplace issues and propose solutions. - Internal Customer - individuals or departments within an organization that rely on others for services or products necessary for their work [Joseph M. Juran] - Father of Quality Control - Developed "TOTAL QUALITY MANAGEMENT" *Beliefs* - Focused on the role of senior managers in quality management - Quality control must be an integral part of the management function - Quality is associated with customer satisfaction and dissatisfaction. *Contributions* - Beginning of Pareto - 80% of problems are caused by 20% of the causes. - Quality Management - Advocated for the education and training of managers, believing that human relations problems and resistance to change were root causes of quality issues - Quality Trilogy - Quality planning - Developing the products and processes required to meet customer needs - Quality control - Creating a process that can operate with minimal inspection - Quality improvement - Developing and optimizing the process to create the product - 10 Steps of Quality Improvement [Armand V. Feigenbaum] - FATHER OF QUALITY CONTROL *Beliefs* - All areas of an organization should be involved in quality control, from the top to the bottom - Quality should be regularly monitored and improved - Customer satisfaction should be a primary goal of any reduce costs associated with poor quality - products, wasted resources, and customer dissatisfaction organization. - *Contributions* - 10 Benchmarks for Total Quality Success - Quality Principles - Quality Control: A systematic approach to ensuring that products meet specified requirements through regular inspections and testing. - Quality Costs: Feigenbaum articulated the importance of understanding both the costs of achieving quality (prevention and appraisal costs) and the costs associated with failures (internal and external failure costs). He argued that managing these costs is crucial for improving overall quality. - Quality Circles: These are small groups of employees who meet regularly to discuss workplace improvement, particularly in quality control processes. They empower employees to contribute to quality initiatives actively. - Quality Assurance: This involves systematic activities implemented within a quality system to ensure that quality requirements are fulfilled. It focuses on preventing defects rather than just detecting them after they occur [Armand V. Feigenbaum] - Total Quality Control: Feigenbaum is best known for developing the concept of Total Quality Control (TQC), which emphasizes the integration of all organizational functions to achieve quality improvement. - He introduced the idea that quality should be viewed from the customer's perspective rather than just from the company's viewpoint, advocating for a holistic approach to quality management that involves everyone in the organization. - Cost of Quality: He also introduced the concept of the cost of quality, which quantifies the economic impact of poor quality on an organization. This approach helps businesses understand that investing in quality improvement can lead to significant cost savings in the long run. [Joseph M. Juran] - Juran Trilogy: Juran is renowned for his Juran Trilogy, which consists of three key components: quality planning, quality control, and quality improvement. This framework provides a structured approach to managing quality throughout an organization. - Pareto Principle: He is also credited with popularizing the Pareto Principle, which states that roughly 80% of effects come from 20% of causes, emphasizing the need to focus on the most significant factors affecting quality. [Dr. Kaoru Ishikawa] - Cause and Effect Diagram: Ishikawa is famous for creating the Ishikawa diagram, also known as the fishbone diagram, which helps identify root causes of problems in a systematic manner. This tool is essential for root cause analysis in quality management. - Total Quality Control: Like Feigenbaum, Ishikawa advocated for Total Quality Control, but he placed a stronger emphasis on involving all employees in the quality process and utilizing data and statistical methods to drive continuous improvement. He believed that teamwork and collective problem-solving are crucial for achieving high-quality outcomes THE SEVEN MANAGEMENT AND PLANNING TOOLS [1. Affinity Diagram] The Affinity Diagram is used to organize ideas and data into natural groupings. [2. Interrelationship Digraph] Tool that maps out the relationships and dependencies among various factors related to a specific problem or issue. It helps in identifying cause-and-effect relationships, allowing teams to visualize how different elements influence one another. [3. Tree Diagram] Used to break down broad categories into finer subcategories, illustrating the hierarchical structure of information. [4. Prioritization Matrix] The Prioritization Matrix assists teams in evaluating and prioritizing options based on specific criteria. [5. Matrix Diagram] AKA Quality Matrix represents relationships between two or more sets of items, allowing for comparison across different categories. [6. Process Decision Program Chart (PDPC)] The Process Decision Program Chart (PDPC) is designed to identify potential problems in a process before they occur. It outlines steps in a process alongside possible obstacles and their solutions, helping teams anticipate challenges and develop contingency plans. [7. Activity Network Diagram] AKA Arrow Diagram or Arrow Network. It helps project managers understand the sequence of activities required to complete a project, identify critical paths, and allocate resources efficiently. IMPORTANCE OF CUSTOMER SATISFACTION AND LOYALTY - Repeat Business and Revenue Generation: Happy customers are more likely to buy again, creating steady revenue without high marketing costs. Loyal customers often spend more and are less sensitive to prices, boosting profits. - Positive Word-of-Mouth & Referrals: Satisfied customers recommend your business to others, acting as free advertising through personal recommendations and social media. - Reduced Marketing Costs: Acquiring new customers is expensive. Focusing on keeping existing customers happy reduces the need for costly marketing. - Brand Reputation & Image: A reputation for satisfying customers builds a positive image. Loyal customers are more forgiving during tough times. - Competitive Advantage: Great customer service helps a business stand out in a crowded market, offering a competitive advantage that\'s hard to copy. - Cross-Selling and Up-Selling Opportunities: Happy customers are more open to buying additional products or services, increasing their spending. - Feedback & Improvement: Satisfied customers give useful feedback, helping businesses improve products and services. - Employee Morale & Engagement: Positive interactions with happy customers improve employee satisfaction and motivation. - Long Term Business Growth: Customer satisfaction builds a loyal base, providing long-term growth and helping businesses survive economic challenges. - Data Source for Decision Making: Loyal customers offer insights into trends and preferences, helping businesses make informed decisions and adapt to changes.