Intro to POM Flashcards
What is OM from a technical standpoint?
An area of mgmt concerned with designing and controlling the process of production and redesigning business operations in the production of goods and services
Responsible for ensuring that business operations are efficient in terms of using as few resources as needed and effective in terms of meeting customer requirements
Manages an entire production system which is the process that converts inputs (RMs, labour, energy, etc.) Into outputs (goods and services) as added value
What is production?
The creation of goods and services
What is OM?
Operations Mgmt is the set of activities that create value in the form of goods and services by transforming inputs into outputs
Essential OM functions
Marketing- generates demand
Finance- tracks how well the org is doing, pays bills, collects money
Production/operations- creates the actual product
What is the transformation process?
Any activity or group of activities that takes one or more inputs, adds value to them and provide outputs for customers and clients
What can a transformation process show?
*Changes in the physical characteristics of materials or customers
*changes in the location of materials, information or customers
*changes in the ownership of materials or information
*storage or accommodation of materials, information or customers
*changes in the purpose or form of information
*changes in the physiological or psychological state of customers
Features of a transformation process
Macro process
Allows for feedback for customers
Can be broken down in the multiple micro operations (smaller transformation processes)
Eg. Making beer. The inputs would be things such as malt, water, hops yeast and the outputs would be beer. However, there are alot more steps/processes involved in turning the inputs into the output.
Eg. Milling the malted barly into grist
Filtering the beer to remove yeast, etc
As such, these operations can have their own transformation process
Origins of OM
A conversion process for production yields a tangible output, a product. A conversion process for operations yields an intangible output, service.
18th century Traditional view of OM- Economist Adam Smith recognized the economic benefits of specialization.
1930s- Frederick W. Taylor implemented Smith’s idea to develop scientific management A process of using scientific studies to analyze, optimize and standardize workflow.
1930’s to 1950’s the field was known as production management as techniques developed focused on economic efficiency in manufacturing. The objective which is still applicable today is, how to produce goods at the right quantity and quality at the right time and at the right manufacturing cost. Era of T Model cars for example.
1970’s operations management emerged as service sectors began to utilize scientific management, while analyzing worker environment and human behavior techniques.
The name Production and Operations Management was formed to indicate a widening of the field in both manufacturing and service organizations signally the beginning of an era of synthesis rather than just analysis.
Synthesis involves combining different pieces of information to create a new understanding.
Analysis involves breaking down information into its individual parts to better understand how they work together
Significant events in OM
- Cost Focus
*1776-1880- Early concepts such as labor specialization and standardized parts
*1880-1910- Scientific mgmt. Era such as Gantt charts and time and motion studies
*1910-1980- Mass Production Era. E.g. moving assembly line (Ford), statistical sampling and EOQ (Harris)
2.Quality Focus
*1980-1995- Lean Production Era. JIT, CAD EDI (Electronic Data Interchange), TQM
- Customization Focus
1990-2005- Mass Customization Era. E-commerce, International Quality Standards (ISO), SCM, Build-to-order - Globalization Focus
2005-2020- Globalization Era Global Supply Chains, Transnational organizations, logistics, ethics in a global workplace
Different Types of Process Strategies
- Process Focused (Job Shop)
- Repetitive (modular) focus
- Mass Customization
- Product Focused (continuous)
What is a process focused design strategy?
Process Focused: Job Shop- A versatile manufacturing system catering to custom or semi-custom production. (high variety, low volume)
Egs. print shop, fine-dining restaurant, machine tool shop
Customization:
Tailored Products: Job shops produce unique, customized products based on specific customer requirements.
Diverse Specifications: Each job may involve different materials, dimensions, or features.
Variety of Processes: Job shops handle a wide range of processes, from machining to assembly, to meet diverse needs.
Low Volume:
Small Batches: Job shops typically operate in small production runs.
No Mass Production: Unlike high-volume factories, job shops don’t churn out large quantities of identical items.
Varied Demand: The irregular nature of customer orders leads to low overall volume.
What is the repetitive focused strategy?
Repetitive Focus:
Product-Oriented Process: Repetitive focus centers on a product-oriented production process.
(moderate variety, moderate volume)
Modules: It utilizes modules, which are parts or components of a product that were previously manufactured or prepared. E.g. McDonald’s patties (fast food chains) and cars
These modules are often created in a continuous process.
Assembly Lines: Companies employing the repetitive focus use assembly lines for their operations.
Employee Skills: While repetitive focus requires less skilled employees, these employees have the opportunity to excel in different facets of the company.
In summary, repetitive focus allows companies to streamline production using assembly lines and modular components, balancing efficiency and customization.
Challenges of repetitive focused strategy?
Lack of Customization:
Repetitive focus emphasizes standardization and modular components.
Customizing products beyond the predefined modules can be challenging.
Customers seeking unique features may not find them in repetitive-focused products.
Limited Product Variety:
Repetitive focus is suitable for a narrow range of products.
Companies using this strategy may struggle to diversify their offerings.
Lack of variety can limit market appeal.
High Initial Investment:
Setting up assembly lines and creating standardized modules requires significant capital.
Companies must invest in specialized machinery and training.
Rigidity in Design Changes:
Once modules are established, altering product designs becomes complex.
Companies may resist changes due to the impact on existing processes.
Employee Monotony:
Repetitive tasks on assembly lines can lead to employee boredom and reduced job satisfaction.
The work environment may lack creativity and challenge.
Dependency on Demand Stability:
Repetitive focus relies on consistent demand for the same product.
Fluctuations in demand can disrupt production efficiency.
Challenges of process focused?
Complex Scheduling: Coordinating diverse jobs with varying routings and lead times is intricate.
Resource Allocation: Allocating resources efficiently for custom jobs requires flexibility.
Process Flexibility: Job shops adapt to unique requirements, which can lead to longer setup times.
High Touch Time Variability: Some jobs may require significantly more time than others
What is mass customization in process design?
High variety, high volume
Mass customization is a business strategy that tailors products and services to suit specific customer requirements in high volumes and at low costs. It combines the flexibility and personalization of custom-made products with the low unit costs of mass production.
Two types of mass customization include:
Collaborative Customization: In this approach, companies work closely with clients to offer products or services uniquely suited to each client. It’s like a partnership where customization meets efficiency.
Adaptive Customization: Companies produce standardized products that end-users can further customize. Think of it as a modular system where clients can mix and match options to create a semi-custom final product.
Egs.
Collective
Nike By You (formerly NikeiD): Nike allows customers to design their own sneakers by choosing colors, materials, and adding personalized details. The collaboration between the brand and the customer results in unique footwear.
Dell Customized Laptops: Dell’s online configurator lets users choose specifications like RAM, storage, and graphics cards to create a personalized laptop
Adaptive
LEGO Pick-a-Brick: LEGO offers a service where customers can buy individual bricks to build their own custom creations. The base components are standardized, but users can adapt them to their needs.
Customizable Cars: Some car manufacturers allow buyers to choose from various features, colors, and accessories to create a personalized vehicle.
Challenges of mass customization
Managing Complexity:
Mass customization introduces complexity into design, production, and supply chain processes. Customizing products for individual customers requires handling a diverse range of options, configurations, and variations. Balancing this complexity while maintaining operational efficiency can be challenging1.
Balancing Cost and Value:
One of the most significant challenges lies in balancing the costs associated with customization. While customers desire personalized products, the cost implications can be substantial. Businesses must strike a delicate balance between offering customization and ensuring that the perceived value justifies the additional expense.
Ensuring Quality Control:
As customization increases, maintaining consistent quality becomes essential. Each customized product must meet the same high standards as mass-produced items. Implementing robust quality control processes across the entire customization pipeline is crucial to avoid compromising product quality.
What is product focused (continuous) strategy used in process design?
Low variety, high volume
High-Volume: These processes handle a large quantity of output. They are designed to efficiently produce a significant number of units.
Low-Variety: The product or service produced is relatively standardized, with minimal customization or variation.
Continuous: These processes operate continuously without frequent interruptions or stops.
Examples:
Bottling and Packaging Lines: In beverage production, high-volume bottling lines fill and seal thousands of bottles per hour. The variety (types of beverages) is low, but the volume is substantial.
Assembly Lines: Automotive assembly lines produce cars at a rapid pace. While there are variations (different car models), the core process remains continuous.
Textile Manufacturing: Spinning mills that produce yarn operate continuously, creating large volumes of standardized yarn.
Characteristics:
Efficiency: High-volume processes optimize resource utilization, minimizing waste and downtime.
Standardization: Products are consistent, adhering to established specifications.
Automation: Automation plays a significant role in maintaining continuous production.
Cost-Effectiveness: These processes achieve economies of scale due to high output.
Limited Customization: Variability is intentionally low to maintain efficiency.
Challenges of the product focused approach
Flexibility: Low variety limits adaptability to changing demands.
Innovation: Continuous processes may resist rapid innovation due to established routines.
Quality Control: Ensuring consistent quality across high volumes can be challenging
What are the different types of production processes
1.Project- construction, shipbuilding, spacecraft
2.Batch- machine shops, print shops, batteries, education.
3.Mass- automobiles, televisions, computers, fast food
4.Continuous-paint, chemicals
Differences between processes in terms of type of product (hint: Think P,B,M,C)
TYPE OF PRODUCT
Project- unique
Batch- Made-to-order (customized) Business production strategy that typically allows consumers to purchase products that are customized to their specifications. It is a manufacturing process in which the production of an item begins only after a confirmed customer order is received.
Mass- Made-to-stock (standardized)- Make to stock (MTS) is a traditional production strategy that is used to match inventory with anticipated consumer demand
Cont.- Commodity- RM used to create consumer products
