1 Process Management and Strategy Responsibilities of operations
1. Process Management and Strategy Responsibilities of operations management 1 • Planning – Product and Service – Make or Buy – Capacity – Location – Layout – Projects – Scheduling • Controlling – Inventory – Quality • Organizing – Degree of centralization – Subcontracting • Staffing – Hiring/laying off – Use of Overtime • Directing – Incentive plans – Issuance of work orders – Job assignments • Budgeting • Reporting
1. Process Management and Strategy Operations Managers and decision making 2 • Tools for Decision Making. – Pareto (ABC) Analysis – Analysis of Tradeoffs – Systems Approach – Quantitative Approaches
1. Process Management and Strategy Pareto phenomenon (ABC analysis) 3 Classifying items, activities, tasks, … according to some measure of importance and allocating efforts and resources accordingly • A vital few things are important for reaching an objective or solving a problem. • 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?
1. Process Management and Strategy Pareto phenomenon, ABC analysis, Recognition of Priorities 4 Dealing with the fact that certain aspects of any management situation are more important than others is called recognition of priorities
1. Process Management and Strategy Analysis of tradeoffs 5 Tradeoffs What are the pros and cons of models?
1. Process Management and Strategy Analysis of tradeoffs 6 Buying a new machine Additional Investment Higher Productivity Better Quality More Flexibility Having more inventory Higher Carrying Costs More Obsolescence Better Customer Service
1. Process Management and Strategy Systems approach 7 “The whole is greater than the sum of the parts. ” Suboptimization 2 > 1+1
1. Process Management and Strategy Systems approach 8 Systems approach and Sales Purchasing Production
1. Process Management and Strategy Systems 9 A set of parts with interrelationship between parts organized to achieve a goal How systems grow up
1. Process Management and Strategy Models 10 • A model is an abstraction of reality. – Physical – Schematic – Mathematical
1. Process Management and Strategy Quantitative approach 11 • Linear programming • • Transportation model Inventory models Waiting line models Statistical models
1. Process Management and Strategy Recent trends 12 ü Global competition ü Operations strategy ü Flexibility ü Cycle time reduction ü Business process re-engineering ü Supply Chain Management ü Workers involvement ü Lean Manufacturing ü Total quality management
1. Process Management and Strategy Recent trends 13 ü Global competition ü Global Market ü Global Suppliers ü Operations strategy ü Quality based ü Time based ü Flexibility ü Variety of products ü High Volume as well as low volume ü Cycle time reduction ü The less time RM, WIP, and FG spend in the Manufacturin and Logistics process products the less opportunity they have to absorb costs
1. Process Management and Strategy Recent trends 14 ü Business process re-engineering ü Value added and NVA activities ü Supply Chain Management ü Not from RM storage to FG warehouse ü From the original suppliers to final consumers ü Workers involvement ü Workers are not cost they are assets ü Lean Manufacturing ü Inventory is waste ü Total quality management
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