Operations Management Basics Chapter 7 Operations Management Set

Operations Management Basics Chapter 7

Operations Management �Set of activities that creates value in the form of good and services by transforming inputs into outputs.

Operations Managers �Responsibilities �Education �Work Environment �Median pay in 2012

From the Bureau of Labor Statistics (www. bls. gov) Quick Facts: Industrial Production Managers 2012 Median Pay $89, 190 per year $42. 88 per hour Entry-Level Education Bachelor’s degree Work Experience in a Related Occupation 5 years or more On-the-job Training None Number of Jobs, 2012 172, 700 Job Outlook, 2012 -22 -2% (Little or no change) Employment Change, 2012 -22 -4, 100

Capacity Planning �Capacity: Amount of output �Goals of capacity planning �Factors that affect capacity planning

Production Facility �Site decision: Where to Locate? ◦ Cost of space ◦ Cost of labor ◦ Tax incentives �Fort Wayne Urban Enterprise Association ◦ http: //www. fwuea. org/uea-taxincentives. html

Production Facility ◦ Source of demand ◦ Access to transportation �GM ◦ Supply of labor ◦ Foreign production?

Layout Planning �Process Hair Stylist Sink Check in/Check out Sink Dryer/ wait area Sink

Layout Planning �Product (think Subway) Bread? Sandwic h Cheese ? Toasted ? Veggies ? Sauces? Cookies ? Chips? Pay Up!

Layout Planning �Fixed Position Workstation Finished Product Components Workstation

Flexible Manufacturing �CAD ◦ ◦ What is it? What do they do? Education Pay

CAD Engineers Quick Facts: Industrial Designers 2012 Median Pay $59, 610 per year $28. 66 per hour Entry-Level Education Bachelor’s degree Work Experience in a Related Occupation None On-the-job Training None Number of Jobs, 2012 39, 200 Job Outlook, 2012 -22 4% (Slower than average) Employment Change, 2012 -22 1, 700

Flexible Manufacturing ◦ CAM �What is it? �What do they do? �Education �Pay

CAM Quick Facts: Machinists and Tool and Die Makers 2012 Median Pay $40, 910 per year $19. 67 per hour Entry-Level Education High school diploma or equivalent Work Experience in a Related Occupation None On-the-job Training Long-term on-the-job training Number of Jobs, 2012 476, 200 Job Outlook, 2012 -22 7% (Slower than average) Employment Change, 2012 -22 33, 700

Flexible Manufacturing System

Robotics �What is it? �What do they do? �Education �Pay

BLS Statistics for Robotics Quick Facts: Electrical and Electronics Engineering Technicians 2012 Median Pay $57, 850 per year $27. 81 per hour Entry-Level Education Associate’s degree Work Experience in a Related Occupation None On-the-job Training None Number of Jobs, 2012 146, 500 Job Outlook, 2012 -22 0% (Little or no change) Employment Change, 2012 -22 0

Computer Integrated Manufacturing �What is it? �Goal? �Challenges?

Operations Control �Purchasing �Inventory �Scheduling �Quality control

Purchasing �Who’s ◦ ◦ the supplier of parts? Price Quality Speed Reliability ◦ Servicing ◦ Credit? Payment terms? �Outsourcing vs In-house �Volume discounts?

Purchasing Managers �Supply �What Chain Managers do they do? �Education �Pay

2012 Median Income 60, 550 or $29. 11 per hour Entry Level Education Varies but usually requires a bachelor’s degree in business Work Experience in related field Varies On The Job Training Varies Number of jobs, 2012 504, 600 Job Outlook, 2012 -2022 4% (slower than average) Employment change 2012 -2022 19, 700

Inventory Control �Beginning Inventory �Work In Process �Finished Goods �Two types of costs ◦ Carrying costs ◦ Ordering costs �JIT �MRP

Production Scheduling �What is it? �PERT ◦ Critical Path

PERT Chart

GANTT Chart

Quality Control �Identifying and correcting product deficiencies to ensure that operations produce products that meet specific quality standards. �TQM: total quality management �Frederick Taylor �W Edwards Deming �Frank Gilbreath and Lillian Gilbreath (Cheaper by the Dozen)

Quality Control �Methods ◦ Quality control circles ◦ Sampling ◦ Customer complaints �International Organization for Standards (ISO) ◦ ISO 9000—setting up and running quality management systems ◦ ISO 14000—requirements and guidelines for environmental management

Supply Chain �Definition

Business Plan: Operations �Helps visualize and realize your operational planning details. �Manufacturing process; service process �When will you operate?

Concepts to know: �Business ◦ ◦ ◦ ◦ ◦ Concepts Customer-driven production Customization Inventory Layout planning Lean production (Just in time delivery) Operations processes Process control: PERT and Gantt charts Quality planning standardization

Materials �What supplies do you need and the cost of those supplies? �Needs to be detailed and realistic

Quality Control �How will you ensure a quality product or service to your customers? �What process will you use to ensure that quality? ◦ Mc. Donalds ◦ Wal. Mart ◦ Appleby’s �Who will take on the responsibility of quality control?

Concepts to know: ◦ ◦ ◦ ◦ ◦ Benchmarking Inspections International Standards Organization Quality circles Quality Control Quality planning Six sigma Total Quality Management Value Added Analysis

Technology? �Will IT be necessary? Will it contribute to the operation of the business? �Hardware? Software? ◦ Must include support services �Will it be used for marketing your business? �Outsource? �Intranet necessary? ISP provider? �Develop website? Who? �All costs MUST be included in financial plans

Concepts ◦ CAD ◦ Database ◦ Electronic conferencing ◦ ERP ◦ Extranet ◦ Identity Theft ◦ Intellectual property ◦ ◦ ◦ ISP Intranet LAN WAN MIS Management support systems ◦ Transaction Procession