Ch 07 busi20 Fall 07.ppt

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookCopyright © 2005 Prentice Hall, Inc.Copyright © 2005 Prentice Hall, Inc.

All rights reserved. All rights reserved.

Chapter 7Chapter 7

Managing Managing Operations and Operations and

Improving QualityImproving Quality

““There are many There are many ways of going ways of going

forward, but only forward, but only one way of one way of

standing still.”standing still.”——

Franklin D. RooseveltFranklin D. Roosevelt

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 7–2

Key Topics

• Operations and Utility Creation

• Service operations vs. goods production

• Operations planning

• The supply chain strategy

• Quality management


The Management Process

• Planning – What are we going to do?

• Organizing – How are we going to do it?

• Directing – Get it done!

• Controlling – How well did we do?

• Operations touches on all areas, especially the middle two.


Organization Chart with Operations

As of May 2005


What should operations do?

Operations oversees the processes that transform Operations oversees the processes that transform resources (inputs) into services and goods (outputs) resources (inputs) into services and goods (outputs) that create value & benefits (utility) for customers.that create value & benefits (utility) for customers.

Operations oversees the processes that transform Operations oversees the processes that transform resources (inputs) into services and goods (outputs) resources (inputs) into services and goods (outputs) that create value & benefits (utility) for customers.that create value & benefits (utility) for customers.


Operations Create Utility to Satisfy

FormForm

TimeTime

PlacePlace


What shouldn’t Operations do?

Operations managersOperations managers should eliminate non-should eliminate non-essential processes which do not add utility for the essential processes which do not add utility for the customer.customer.

Operations managersOperations managers should eliminate non-should eliminate non-essential processes which do not add utility for the essential processes which do not add utility for the customer.customer.


Key Topics




• Total quality management tools



Defining Operations

• Service: Performing tangible and

intangible services. High contact Low contact

• Goods Production: Producing tangible

products. Analytic (break down) Synthetic (build up)


Services in depth

• Focus on:Performance vs productionProcess and outcome both involve customerService characteristics

Intangible, Customized, UnstorableCustomer-service link

The customer is more a part of the processService quality considerations

What else is important to the customer? Modern day feedback

http://www.jiffylubeproblems.com/StateIndex.htm


Growth in the Goods and Services Sectors

100100

8080

6060

4040

2020

Millions of Workers

ServicesServices

Goods ProductionGoods Production

198

4

198

6

198

8

199

0

199

2

199

4

199

6

199

8

200

0


What’s Had The Biggest Effect on Productivity?


Integration of Global Operations & the Effect on Production• Technology has pushed operations

to become better and faster globally.

• The internet has integrated production with global suppliers and customers.

• As technology further evolves, fewer services are naturally protected.

• Bonus: If you can figure out how to build a strength, you can capture the world.


Key Topics




• Total quality management tools



Resource Transformation Process

Figure 7–1


Operations Planning and Control

Figure 7–2


Layout Process Product Cellular

Methods

(Processes)

QualityLocation

Capacity

Operations Planning Topics


Methods Planning: Process Flow Chart


Operations Scheduling

• Gantt chart• Pert chart


Gantt Charting Demonstration

• Identify the activity to be planned

• Set a deadline & time scale (hours, days, months, etc.)

• Identify steps needed to complete the task Use scratch paper first!

• Identify time needed for each step

• Is the schedule RUMBA? Reasonable? Understandable? Measurable? Believable? Achievable?

• THEN build the Gantt chart


Gantt Charting Activity

• Pick a business task of moderate complexity (>5 steps).

• Set a deadline & time scale (hours, days, months, etc.)

• Identify steps needed to complete the task Use scratch paper first!

• Identify time needed for each step

• Is your schedule RUMBA? Reasonable? Understandable? Measurable? Believable? Achievable?

• THEN fill in chart


Gantt Charting Activity – Controlling

• Is your schedule Reasonable? Achievable? Measurable?

• Where do you need the most follow-up attention?Think: Where will a slow down cause a deliverable

delay?

• How will you manage a crisis?• What are your contingency plans?


PERT Chart Project Scheduling

Figure 7–5

: A delay here delays the final project deliverable.


Gantt Chart

Figure 7–4


Managing Several Projects with Gant Charts:• Master Chart• Subsidiary Charts

Gantt Chart for:_Director of facilities___________________________________________________________________________________

Time Series April April April April May May May May June June June JuneEvent Stage Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4

1 Open New warehouse

2 Refurbish forklifts

3 Hire 25 new workers

4 Redecorate Classroom


Layout Process Product Cellular

Methods

(Processes)

QualityLocation

Capacity

Operations Planning Topics


Quality Management: Ensuring quality throughout the business

• Total Quality Management

Start with customers

Team approach

Measurement

Continual improvement

Quality: The combination of characteristics of a product or service that bear on its ability to satisfy stated or implied needs.


Tools for Total Quality Management

Statistical Statistical Process Process ControlControl

Statistical Statistical Process Process ControlControl

Quality Quality improvement improvement

teamsteams

Quality Quality improvement improvement

teamsteams

Getting Close Getting Close to the to the

CustomerCustomer

Getting Close Getting Close to the to the

CustomerCustomer

Process Process improvement improvement

vs vs ReengineeringReengineering

Process Process improvement improvement

vs vs ReengineeringReengineering

ISO ISO CertificationCertification

ISO ISO CertificationCertification

Value-Added Value-Added AnalysisAnalysis

Value-Added Value-Added AnalysisAnalysis


Process Improvement Management using TQM

• Results: Top down control → Focus at end “J” curve

• Process: Delegated control Focus on determinants of

goal - processes Constant improvement

Time in Quarters

90%

80%

70%

60%

100%

0 1 2 3 4

Usa

ble

Pro

duct

ion

Time in Quarters

90%

80%

70%

60%

100%

0 1 2 3 4

Usa

ble

Pro

duct

ion


Process Control Chart at Honey Nuggets Cereal

Figure 7–6


Shipping Errors

-10

-5

0

5

10

15

29-Dec 8-Jan 18-Jan 28-Jan 7-Feb 17-Feb 27-Feb 9-Mar

Day of the month

Nu

mb

er

of sh

ipp

ing

err

ors

s

What can you tell about this firm?


Supply Chain ManagementSupply Chain Management

Managing the supply chain as a whole to maximize customer value and reduce waste.

Value Chain ManagementAll factors related to the value received by

the customer.

Expanding scope of management


Supply Chain for Baked Goods

Figure 7–7


Process Management Diversion


Chapter Review

• Explain “operations” and the utility that operations processes provide.

• Distinguish service operations from goods production.

• Describe the five decision areas involved in operations planning.

• Identify the key tools for total quality management.

• Explain supply chain management.

Ch 07 busi20 Fall 07.ppt

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