MANAGING OPERATION AND IMPROVING QUALITYLecture Notes SevenBy Fahmy Radhi

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*Business Introduction*Operations ManagementPlanning and controlling in a systematic process that transform inputs into outputs of greater value

It deals with the production of goods and services

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*Business Introduction*Transformation Process

InputProcessOutputMaterialsMachinesMan/workersMoney/capitalInformation ManufacturingAssemblingTransportingStoringConsultingAutomobilesTelevisionsServices

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*Business Introduction*Types of Manufacturing Operations

Job Shop Manufacturing make-to-order product in accordance with design supplied by the customer. Its characteristics: High variety product with low volume, Using the multipurpose equipments and flexibility material handling, Need broad range skills. E.g. custom-built home, custom tailor clothes, specific machines

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*Business Introduction*Types of Manufacturing OperationsRepetitive Manufacturing make-to-stock produced to anticipation of customer demand. Its characteristics: High volume with low variety as standardized product for mass marketRepetitive process using the single purpose equipment for the same process Need a specialist skills. E.g. Television, Refrigerator, most costumer goods

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*Business Introduction*Types of Manufacturing OperationsBatch Manufacturing similar standard product produced periodically in batches. Its characteristics: Combination of product variety and average volume per product, Using flexible Equipment that must be capable of performing some variety of tasks, Need a variety of skills. E.g. hand tools, bakeries

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*Business Introduction*Types of Services Operation

Service Factories: Low labor intensity - Low customer interaction. E.g.: airline, hotel.Service Shops: Low Labor intensity - high customer interaction. E.g.: hospital, repair serviceMass Service: high labor intensity - low customer interaction. E.g.: Banking, EducationProfessional Services: both highly labor-intensity and customer interaction. E.g.: Doctors, Lawyer

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*Business Introduction*Operations PlanningCapacity PlanningLocation PlanningLayout PlanningProduct design planningProcess PlanningDrawing and SchedulingQuality Planning

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*Business Introduction*Layout Types

Process/functional Layouts arranged by group similar process or function or activities in department or work centersProduct/line Layouts arranged in line according to the sequence of operations for particular product or serviceFixed-position Layout arrangement in which the product is in fixed place, while worker along with equipments are move to the product

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*Business Introduction*Material ManagementMaterials Management - an integrated activities in purchasing, transporting, storage, handling of materials, and inventory controlMaterial Control Methods:EOQ Economic Order QuantityJIT Just-In-TimeMRP Material Requirement Planning

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*Business Introduction*Improving QualityQuality is the totally of features and characteristic of a product or service that bears on its ability to satisfy given needsMajor Areas of quality:Quality of DesignQuality of transformation processQuality of ProductsQuality of Service after delivery

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*Business Introduction*Quality DimensionsPerformance the main characteristics Features extra characteristic added. Reliability consistency its performance Conformance how well a product meets standard Durability, Serviceability, Aesthetics and Safety

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*Business Introduction*Total Quality ManagementTQM is a philosophy and approach to managing an organization that involves everyone in the quest for quality as perceived by customer

The TQM approach:Find out what customer wantDesign should meet with customer wantNever ending improvementExtend these concept to supplier and to distribution

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TQM Strategy

Continuous improvementCompetitive benchmarking Quality Function DeploymentEmployee Empowerment Team approach Skills and knowledge Improvement

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*Business Introduction*Operations Strategy Focus of Business Strategy: Effectiveness/CompetitivenessPlanning for the long termStrategic Triad (see figure)CustomersCompetitorsCompanys resources (purview of OM)Classification of Strategic ThrustsCost leadershipFocus (customer/product)Differentiation

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*Business Introduction*The Strategic TriadFocus of OM2-1

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*Business Introduction*Operations StrategyElements of OM StrategyInputsAdd/remove capacity; outsourcing issuesSkills/flexibility of workforceSafety/environmental commitmentTransformation processProduct/process development investmentCommitment to standardizationControl systems and automationOutputsLine of goods/servicesFocus on customer (recall 6 needs/wants)

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*Business Introduction*Operations Strategy GlobalizationMarkets are no longer regionalDeregulationTechnologyPrivatizationHence, all business is international businessSuppliersCustomersCompetitorsAs a result, competitive pressures require increasingly greater levels of excellence

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