Operations Management Chapter 10 Human Resources and Job

Operations Management Chapter 10 – Human Resources and Job Design Power. Point presentation to accompany Heizer/Render Principles of Operations Management, 7 e Operations Management, 9 e © 2008 Prentice Hall, Inc. 10 –

Outline þ Global Company Profile: Rusty Wallace’s NASCAR Racing Team þ Human Resource Strategy þ For Competitive Advantage þ Constraints on Human Resource Strategy þ Labor Planning þ Employment-Stability Policies þ Work Schedules þ Job Classifications and Work Rules © 2008 Prentice Hall, Inc. 10 – 2

Outline – Continued þ Job Design þ Labor Specialization þ Job Expansion þ Psychological Components of Job Design þ Self-Directed Teams þ Motivation and Incentive Systems © 2008 Prentice Hall, Inc. 10 – 3

Outline – Continued þ Ergonomics and Work Methods þ Methods Analysis þ The Visual

Learning Objectives When you complete this chapter you should be able to: 1. Describe labor planning policies 2. Identify the major issues in job design 3. Identify major ergonomic and work environment issues 4. Use the tools of methods analysis 5. Understand the contribution of the visual workplace © 2008 Prentice Hall, Inc. 10 – 5

Rusty Wallace’s NASCAR Racing Team þ NASCAR racing became very popular in the 1990 s with huge sponsorship and prize money þ High performance pit crews are a key element of a successful race team þ Pit crew members can earn $100, 000 per year – for changing tires! © 2008 Prentice Hall, Inc. 10 – 6

Rusty Wallace’s NASCAR Racing Team þ Each position has very specific work standards þ Pit crews are highly organized and go though rigorous physical training þ Pit stops are videotaped to look for improvements © 2008 Prentice Hall, Inc. 10 – 7

Human Resource Strategy The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized 1. People should be effectively utilized within the constraints of other operations management decisions 2. People should have a reasonable quality of work life in an atmosphere of mutual commitment and trust © 2008 Prentice Hall, Inc. 10 – 8

Schedules • Time of day • Time of year (seasonal) • Stability of schedules When Process strategy • Technology • Machinery and equipment used • Safety Individual differences Who • Strength and fatigue • Information processing and response HUMAN RESOURCE STRATEGY ow H Location strategy • Climate • Temperature • Noise • Light • Air quality W ha t W he re Product strategy • Skills needed • Talents needed • Materials used • Safety Pr oc ed ur e Constraints on Human Resource Strategy Layout strategy • Fixed position • Process • Assembly line • Work cell • Product Figure 10. 1 © 2008 Prentice Hall, Inc. 10 – 9

Labor Planning Employment Stability Policies 1. Follow demand exactly þ Matches direct labor costs to production þ Incurs costs in hiring and termination, unemployment insurance, and premium wages þ Labor is treated as a variable cost © 2008 Prentice Hall, Inc. 10 – 10

Labor Planning Employment Stability Policies 2. Hold employment constant þ Maintains trained workforce þ Minimizes hiring, termination, and unemployment costs þ Employees may be underutilized during slack periods þ Labor is treated as a fixed cost © 2008 Prentice Hall, Inc. 10 – 11

Work Schedules þ Standard work schedule þ Five eight-hour days þ Flex-time þ Allows employees, within limits, to determine their own schedules þ Flexible work week þ Fewer but longer days þ Part-time þ Fewer, possibly irregular, hours © 2008 Prentice Hall, Inc. 10 – 12

Job Classification and Work Rules þ Specify who can do what þ Specify when they can do it þ Specify under what conditions they can do it þ Often result of union contracts þ Restricts flexibility in assignments and consequently efficiency of production © 2008 Prentice Hall, Inc. 10 – 13

Job Design þ Specifying the tasks that constitute a job for an individual or a group 1. Job specialization 2. Job expansion 3. Psychological components 4. Self-directed teams 5. Motivation and incentive systems © 2008 Prentice Hall, Inc. 10 – 14

Labor Specialization þ The division of labor into unique tasks þ First suggested by Adam Smith in 1776 1. Development of dexterity and faster learning 2. Less loss of time 3. Development of specialized tools þ Later Charles Babbage (1832) added another consideration 4. Wages exactly fit the required skill © 2008 Prentice Hall, Inc. 10 – 15

Job Expansion þ Adding more variety to jobs þ Intended to reduce boredom associated with labor specialization þ Job enlargement þ Job rotation þ Job enrichment þ Employee empowerment © 2008 Prentice Hall, Inc. 10 – 16

Job Enlargement Enriched job Planning (Participate in a crossfunction quality improvement team) Enlarged job Task #3 (Lock printed circuit board into fixture for next operation) Present job (Manually insert and solder six resistors) Task #2 (Adhere labels to printed circuit board) Control (Test circuits after assembly) Figure 10. 2 © 2008 Prentice Hall, Inc. 10 – 17

Psychological Components of Job Design Human resource strategy requires consideration of the psychological components

Hawthorne Studies þ They studied light levels, but discovered productivity improvement was independent from lighting levels þ Introduced psychology into the workplace þ The workplace social system and distinct roles played by individuals may be more important than physical factors þ Individual differences may be dominant in job expectation and contribution © 2008 Prentice Hall, Inc. 10 – 19

Core Job Characteristics Jobs should include the following characteristics þ Skill variety þ Job

Job Design Continuum Self-directed teams Empowerment Enrichment Enlargement Specialization Increasing reliance on employee’s contribution and increasing responsibility accepted by employee Job expansion Figure 10. 3 © 2008 Prentice Hall, Inc. 10 – 21

Self-Directed Teams þ Group of empowered individuals working together to reach a common goal þ May be organized for long-term or short-term objectives þ Effective because þ Provide employee empowerment þ Ensure core job characteristics þ Meet individual psychological needs © 2008 Prentice Hall, Inc. 10 – 22

Self-Directed Teams To maximize effectiveness, managers should þ Ensure those who have legitimate contributions are on the team þ Provide management support þ Ensure the necessary training þ Endorse clear objectives and goals þ Financial and non-financial rewards þ Supervisors must release control © 2008 Prentice Hall, Inc. 10 – 23

Benefits of Teams and Expanded Job Designs þ Improved quality of work life þ Improved job satisfaction þ Increased motivation þ Allows employees to accept more responsibility þ Improved productivity and quality þ Reduced turnover and absenteeism © 2008 Prentice Hall, Inc. 10 – 24

Limitations of Job Expansion 1. Higher capital cost 2. Individuals may prefer simple jobs 3. Higher wages rates for greater skills 4. 5. Smaller labor pool Higher training costs © 2008 Prentice Hall, Inc. 10 – 25

Limitations of Job Expansion 1. Higher capital cost 2. Individuals may prefer. Asimple jobs nnual verage A Hours/ g in in a r T 3. Higher wages rates for greater skills loyee 4. 5. Smaller labor pool Emp U. S. Higher training costs Sweden Japan © 2008 Prentice Hall, Inc. 7 170 200 10 – 26

Motivation and Incentive Systems þ þ Bonuses - cash or stock options Profit-sharing - profits for distribution to employees þ Gain sharing - rewards for improvements þ Incentive plans - typically based on production rates þ Knowledge-based systems - reward for knowledge or skills © 2008 Prentice Hall, Inc. 10 – 27

Ergonomics and the Work Environment þ Ergonomics is the study of the interface between

Ergonomics and Work Methods þ Feedback to operators þ The work environment þ Illumination

Job Design and Keyboards Figure 10. 4 © 2008 Prentice Hall, Inc. 10 –

Levels of Illumination Task Condition Type of Task or Area Illumination Level Type of Illumination Small detail, extreme accuracy Sewing, inspecting dark materials 100 Overhead ceiling lights and desk lamp Normal detail, prolonged periods Reading, parts assembly, general office work 20 -50 Overhead ceiling lights Good contrast, fairly large objects Recreational facilities 5 -10 Overhead ceiling lights Large objects Restaurants, stairways, warehouses 2 -5 Overhead ceiling lights Table 10. 2 © 2008 Prentice Hall, Inc. 10 – 31

Decibel Levels Environment Noises Common Noise Sources Decibels Jet takeoff (200 ft) Electric furnace area Pneumatic hammer Printing press plant Subway train (20 ft) Inside sports car (50 mph) Pneumatic drill (50 ft) Near freeway (auto traffic) Vacuum cleaner (10 ft) Speech (1 ft) Private business office Light traffic (100 ft) Large transformer (200 ft) Minimum levels, Chicago residential areas at night Studio (speech) Soft whisper (5 ft) 120 | 100 | 90 | 80 | 70 | 60 | 50 | 40 | 30 Very annoying Ear protection required if exposed for 8 or more hours Intrusive Quiet Very quiet Table 10. 3 © 2008 Prentice Hall, Inc. 10 – 32

Methods Analysis þ Focuses on how task is performed þ Used to analyze 1. Movement of individuals or material þ Flow diagrams and process charts 2. Activities of human and machine and crew activity þ Activity charts 3. Body movement þ Micro-motion charts © 2008 Prentice Hall, Inc. 10 – 33

Flow Diagram Welding From press mach. Storage bins Mach. 3 Mach. 4 Paint shop

Flow Diagram Machine 4 Welding Machine 3 Paint shop Machine 2 Machine 1 From

Process Chart Figure 10. 5 (c) © 2008 Prentice Hall, Inc. 10 – 36

Activity Chart Figure 10. 6 © 2008 Prentice Hall, Inc. 10 –

Operation Chart Figure 10. 7 © 2008 Prentice Hall, Inc. 10 –

The Visual Workplace þ Use low-cost visual devices to share information quickly and accurately þ Displays and graphs replace printouts and paperwork þ Able to provide timely information in a dynamic environment þ System should focus on improvement © 2008 Prentice Hall, Inc. 10 – 39

The Visual Workplace Visual signals can take many forms and serve many functions þ

The Visual Workplace Visual utensil holder encourages housekeeping A “ 3 -minute service” clock

The Visual Workplace Visual signals at the machine notify support personnel Visual kanbans reduce inventory and foster JIT Reorder point Line/machine stoppage Parts/ maintenance needed All systems go Part A Part B Part C Andon Figure 10. 8 © 2008 Prentice Hall, Inc. 10 – 42

The Visual Workplace Quantities in bins indicate ongoing daily requirements and clipboards provide information on schedule changes Process specifications and operating procedures are posted in each work area Figure 10. 8 © 2008 Prentice Hall, Inc. 10 – 43

Ethics and the Work Environment þ Fairness, equity, and ethics are important constraints of job design þ Important issues may relate to equal opportunity, equal pay for equal work, and safe working conditions þ Helpful to work with government agencies, trade unions, insurers, and employees © 2008 Prentice Hall, Inc. 10 – 44

Labor Standards þ Effective manpower planning is dependent on a knowledge of the labor required þ Labor standards are the amount of time required to perform a job or part of a job þ Accurate labor standards help determine labor requirements, costs, and fair work © 2008 Prentice Hall, Inc. 10 – 45