Operations Management BUSN 6110 SUMMER 2012 Syllabus Class
Operations Management BUSN 6110 SUMMER, 2012
Syllabus • • • Class 1 (May 23): chap 1; chap 2, case study (Introduction, Strategy, Decision Making) May 28 – Jun 8: CGSC Break Class 2: (Jun 13): Chap 9/10, Chap 6, Chap 4, (Supply Chain, Quality, Product and Service Design) Class 3: (Jun 20): Supplemental readings (Take home exam) (Processes and Technologies , Facility Planning) Class 4: (Jun 27): Chap 7, Chap 13 (Project Management, Capacity and Aggregate Planning, Inventory Management) Jul 4: Holiday Class 5: (Jul 11): Chap 11 (Forecasting), Supplemental Readings (Reverse Logistics – need “The Forklifts Have Nothing To Do!” Available in the Lewis and Clark Bookstore) Class 6: (Jul 18): Chap 12 (Sales and Operations Planning), Supply Chain Security, The Beer Game Class 7: (Jul 25) Chap 10 (Lean/Just in Time/TOC), Case Study, Final Exam (take home) Class 8: (Aug 3): Group presentations Other requirements: →visit Harley-Davidson Plant in Kansas City, or Boulevard Brewery in Kansas City, or The Roasterie Coffee Company in Kansas City or other operation activity and present as small groups to the class on Aug 3.
Additional Text The # 2 Selling Warehousing and Distribution Book and #1 Non-text book Warehousing Book on Oct 15, 2011
Grades • • Group Presentation – 10% Attendance/Participation– 10% Mid Term – 40% Final Exam – 40%
Contact Information • • • joewalden@supplychainresearch. com (760) 447 -3651 Personal background
Class Slides and Information • www. supplychainresearch. com • Slides will be posted/updated week prior to class – therefore the slides currently on the website may change as new materials come available
Chapter 1 Introduction to Operations Management
The Operations Function ü Operations as a transformation process ü Operations as a basic function ü Operations as the technical core
Operations as a Transformation Process INPUT Material Machines Labor Management Capital
Operations as a Transformation Process INPUT Material Machines Labor Management Capital TRANSFORMATION PROCESS
Operations as a Transformation Process INPUT Material Machines Labor Management Capital TRANSFORMATION PROCESS OUTPUT Goods Services
Operations as a Transformation Process INPUT Material Machines Labor Management Capital TRANSFORMATION PROCESS Feedback OUTPUT Goods Services
Transformation Processes ü Physical ü Locational (manufacturing) (transportation/ warehouse) ü Exchange (retail) ü Physiological (health care) ü Psychological (entertainment) ü Informational (communications)
Impacts on Operations Management ü Industrial Revolution ü Scientific Management ü Human Relations or the lack thereof ü Advent of Management Science ü Quality Emphasis ü Globalization of Supply Chains ü Information Age/Internet Revolution
Key Events Industrial Revolution Steam engine Division of labor Interchangeable parts 1769 1776 1790 James Watt Adam Smith Eli Whitney Scientific Management Principles Frederick W. Taylor 1911 Activity scheduling chart Henry Gantt 1912 Moving assembly line Henry Ford 1913
Key Events Human Relations Hawthorne studies Motivation theories 1930 1940 s 1950 s 1960 s Elton Mayo Abraham Maslow Frederick Hertzberg Douglas Mc. Gregor Management Science Linear programming Digital computer Simulation, PERT/CPM, Waiting line theory MRP 1947 1951 1950 s George Dantzig Remington Rand Operations research groups 1960 s Joseph Orlicky, IBM
Key Events Quality Emphasis JIT TQM 1970 s Taiichi Ohno, Toyota 1980 s W. Edwards Deming, Joseph Juran, et. al. Strategy and operations Skinner, Hayes Reengineering 1990 s Hammer, Champy World Trade Organization 1990 s Numerous countries and companies Globalization European Union and other trade agreements EDI, EFT, CIM 1970 s IBM and others 1980 s
Key Events Information Age/ Internet Revolution Internet, WWW, ERP Supply chain management, E-commerce 1990 s SAP, i 2 Technologies, ORACLE, People. Soft, Amazon, Yahoo, e. Bay, and others
Categories of E-Commerce Business Consumer Business B 2 B Commerceone. com B 2 C Amazon. com Consumer C 2 B Priceline. com C 2 C e. Bay. com
Types of B 2 B Transactions Buyer Seller (a) Electronic Storefront Sellers (b) Seller’s Auction Buyers Sellers Buyer (c) Buyer’s Auction (d) Exchange or E-Marketplace
E-Business Promotes: ü Better customer relations ü More efficient processes ü Lower cost of materials ü Information technology synergy ü Better and faster decision making
E-Business Promotes: ü New forms of organizations ü Expanded supply chain ü Higher customer expectations ü New ways of doing business ü Globalization
Competitiveness The degree to which a nation can produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.
Measures of Competitiveness ü Productivity ü GDP (Gross domestic product) growth ü Market capitalization ü Technological infrastructure ü Quality of education ü Efficiency of government
Productivity Output Productivity = Input Productivity improves when firms: ü Become more efficient ü Downsize ü Expand ü Retrench ü Achieve breakthroughs
Barriers to Entry ü Economies of scale ü Capital investment ü Access to supply and distribution channels ü Learning curves
Competition Within Industries Increases When ü Firms are relatively equal in size and resources ü Products and services are standardized ü Industry growth is slow or exponential
Chapter 2 Operations Strategy To Accompany Russell and Taylor, Operations Management, 4 th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
The Importance of Clearly Stated Missions/Visions ‘The Grand Duke said “one who is confused in purpose cannot respond to his enemy” Sun Tzu, The Art of War • To know the purpose – there must be a clearly stated mission and vision.
Clearly Stated Mission? ? ? “When you come to a fork in the road, take it. ”
Example of A Clearly Understood Mission COL Rusling on General Grant: “He made certain his subordinates knew exactly what he wanted, and why and when he wanted it. ”
Example of A Clearly Understood Mission “We endeavor to go to the moon and return safely before the end of this decade. ” - John F. Kennedy
Strategy Formulation • Define a primary task • Assess core competencies • Determine order winners & order qualifiers • Positioning the firm
Internal and External Analysis • SWOT Analysis – Strengths – Weaknesses – Opportunities – Threats
STEEPLE Analysis • • Society Technology Economic Environment Political Legal Ethics
STEEPLE and PMESII-PT • • Social Technological Environmental Economic Political Legal Ethical • • © 2011, Joe Walden Political Military Economic Social Information Infrastructure Physical environment Time
Core Competencies • Also known as core capabilities • Skills that differentiate the service or manufacturing firm from competitors • Those things that the company does best
Strategy Formulation • Define a primary task • Assess core competencies • Determine order winners & order qualifiers • Positioning the firm
Competing on Cost ü Eliminate all waste ü Invest in ü ü ü Updated facilities & equipment Streamlining operations Training & development
Competitive Priorities: Cost • Southwest Airlines – one type of airplane facilitates crew changes, record-keeping, maintenance, and inventory costs – direct flights mean no baggage transfers – $30 million annual savings in travel agent commissions by requiring customers to contact the airline directly Copyright, 2006, John Wiley and Sons
Competing on Quality ü Please the customer ü Understand customer attitudes toward and expectations of quality Example: Ritz Carlton
Competing on Flexibility ü Produce wide variety of products ü Introduce new products ü Modify existing products quickly ü Respond to customer needs
Competing on Speed ü Fast moves ü Fast adaptations ü Tight linkages Example: FEDEX, UPS
Operations Role in Corporate Strategy ü Provide support for overall strategy of a firm ü Serve as firm’s distinctive competence ü Must be consistent with overall strategy
Operations and Wall Street • Comparing operations at a firm with competitors • Example income per employee revenue per employee inventory turnover customer turnover
Operations Strategy at Wal-Mart Mission Competitive Priority Wal-Mart Provide value for our customers Low prices, everyday Operations Strategy Low inventory levels Short flow times Operations Structure Linked communications between stores Fast transportation system Enabling Process and Technologies EDI/satellites Cross-docking Focused locations
Strategy and the Internet ü Create a distinctive business strategy ü Strengthen existing competitive advantages ü Integrate new and traditional activities ü Must provide a unique value to the customer- Zappos/Amazon
Products & Services ü Make-to-order ü Made to customer specifications after order received ü Make-to-stock ü Made in anticipation of demand ü Assemble-to-order ü Add options according to customer specification
Processes & Technology ü Project ü One-time production of product to customer order ü Batch production ü Process many jobs at same time in batch ü Mass production ü Produce large volumes of standard product for mass market ü Continuous production ü Very high volume commodity product
Capacity & Facilities ü How much capacity to provide ü Size of capacity changes ü Handling excess demand ü Hiring/firing workers ü Need for new facilities
Facilities ü Best size for facility? ü Large or small facilities ü Facility focus ü Facility location ü Global facility
Human Resources ü Skill levels required ü Degree of autonomy ü Policies ü Profit sharing ü Individual or team work ü Supervision methods ü Levels of management ü Training
Quality ü Target level ü Measurement ü Employee involvement ü Training ü Systems needed to ensure quality ü Maintaining quality awareness ü Evaluating quality efforts ü Determining customer perceptions
Sourcing ü Degree of vertical integration ü Supplier selection ü Supplier relationship ü Supplier quality ü Supplier cooperation
Operating Systems ü Execute strategy daily ü Information technology support ü Effective planning & control systems ü Alignment of inventory levels, scheduling priorities, & reward systems
Policy Deployment ü Focuses employees on common goals & priorities ü Translates strategy into measurable objectives ü Aligns day-to-day decisions with strategic plan
Balanced Scorecard ü Finance — How should we look to our shareholders? ü Customer — How should we look to our customers? ü Processes — At which business processes must we excel? ü Learning and Growing — How will we sustain our ability to change and improve?
Issues and Trends ü Global markets, sourcing, operations ü Virtual companies ü Greater choice ü Emphasis on service ü Speed and flexibility ü Supply chains ü Collaboration ü Technological advances ü Knowledge ü Environment and social responsibilities
The Dilbert (Dogbert) Solution – Change the Name of the Old Program
Intro to Decision Making
Decision Analysis • Payoff Table - craps tables • Maximax - maximum of maximum payoffs optimistic - “hard ways” • Maximin - maximum of minimum payoffs safe bets or even odds bets • Minimax regret - minimum of maximum regrets or opportunity costs
Decision Trees • Graphical method of analyzing a decision - similar to Theory of Constraints • Payoff table can be translated to a Decision Tree
The Payoff Table ü A method of organizing & illustrating the payoffs from different decisions given various states of nature ü A payoff is the outcome of the decision – a Craps table pay off chart is an example of a payoff chart
Payoff Table States Of Nature (Alternatives) Decision a b 1 Payoff 1/a Payoff 1/b 2 Payoff 2/a Payoff 2/b
STATES OF NATURE DECISION Expand Maintain status quo Sell now Good Foreign Competitive Conditions Poor Foreign Competitive Conditions $ 800, 000 1, 300, 000 320, 000 Maximums: 1, 300, 000; 1, 300, 000 800, 000, 320, 000 Minimums: 500, 000; 230, 000 -150, 000 $ 500, 000 -150, 000 230, 000
Homework • Motel 6 case study • Class in 3 weeks
- Slides: 68
