Lectures Flashcards
Operations Management
The activity of managing the resources that create and deliver services and products
The 3 core functions of an organization
Marketing
The prodcut development function
The operations function
The 4Vs
How do operational processes differ?
The volume of their output (Mc high, sanckbar low)
The variety of their outputs (taxi high, bus low)
The variation of the demand (season hotel high, off season hotel low)
The degree of visibility (hairdresser high, web shop low)
Characteristics pure service
intangible produced and consumed instantly uniqueness high customer interaction services can be dispersed often knowledge based, hard to automate no residual value
Characteristics pure good
tangible storage/ inventroy management similar products produced limited customer interaction produced at fixed facility automation is feasible often residual value exists
servitization
product + service
Product & service
Provision of core product is sold as is supplemented with provision of additional or complementary services
Product with services
Provision of core product bundled with service
Prodcut functionality
Provision of core product’s capabilities as a service, without necessary provision of additional services
Five performance objectives
Cost dependability flexibility quality speed
The 4 stage model of operations contribution
Stage 1 - Internally neutral
Correcting the worst problems - holding the organization back
Stage 2 - Externally neutral
Adopt the best ypractice - as good as competitors
Stage 3 - Internally supportive
Link stratgey with operations - best in industry
Stage 4 - externally supportive
Give an operation’s advantage - redifining industry expectations
strategy development process
1 Analyze the environment
2 Determine corperate mission
3 Form startegy
Top-down
Strategic intention
1 strategy needs to be implemented
2 implementation involves aligning day-to-day operations activities with strategies
3 Day-to-day operations should be run to reflect strategic intention
Bottom-up
Operational day-to-day experience
1 operations processes can capture day to day experience
2 day to day experience can be built into operations based capabilities
3 Operations based capabilities can be exploied strategy
Red oceans
Represent all industries in existence today: define competitors, markets and rules
Blue oceans
Reperesent all industries NOT in existence today: undefined market space and no competitors
The Terry Hill Framework op operations startegy formulation
1 Corporate objectives 2 Marketing strategy 3 How do products/services win orders 4 Process choice 5 Infrastructure (4&5 operations strategy)
The Platts - Gregory procedure
Stage 1
Opportunities and thereats?
What the market wants?
How the operation performs?
Stage 2
The existing operation
Stage 3
Waht do we need to do to improve the revised operations startegy?
Three competitive factors
Order winning
Qualifying
Less important
S- shaper curve of innovation
- Slow introduction
- Obsacles to further development overcome
- Idea approaches its natural limits
The stages of product design innovation
- concept generation
- concept screening
- preliminary design
- evaluation and improvement
- prototyping and final design
Product life cycles
1 introduction to the market - innovators
2 growth in market acceptance - early adaptors
3 maturity of markets - sales level off
4 decline saturated - laggards
3 components so supply network design
1 network shape decision
2 the make-or-buy decision
3 the supply network, matching decision
Process types
Are defined by volume and varieties of items they process
- Project process
- Jobbing process
- Batch process
- Mass process
- Continuous process
Process types for services
- Professional services
- Service shops
- Mass services
4 basic lay-out types
1 Fixed position lay-out
2 Functional lay-out
3 Cell lay-out (can be functional or product lay-out
4 Product lay-out
Throughput tme
Litlles’s law
Throughputtime = WIP x cycle time
Work in progress
The number of items within the process at any point of time
Cylce time
The average time between items being processes
Idle time per worker
cycle time - labor time per worker
Throuphgput efficiency
is the workcontent of whatever’s being processed as a percentage of its throughput time
Work content / throughput time x 100
Process capacity
How much the plant can produce per time unit
Throughput
How much the plant produces per time unit
Supply constraint
When there is a bottleneck
Demand constraint
When there is not enough demand
Process utilization
throughput / process capacity
Ergonomics
Concerned primarly with the physiological aspects of job design
Make or buy decision
Benefits of outsourcing
Economies of scale Risk pooling Reduce capital investment Focus on core competencies Flexibility
Make or buy decision
Drawbacks of outsourcing
Loss of competitive knowledge Loss of channel control to suppliers Confliting objectives More complex supply chain lead time and quality control
Three strategies to cope with demand fluctuations
Level capacity
Chase demand
Manage demand
Design capacity
Max outpur under ideal conditiions
Effective capacity
Max output under normal conditions
Utilization
rate of output actually achieved
Main reasons to hold inventory
Pipeline inventory - Work being processed as long as the throughput time> 0, there is WIP in the system
Seasonal inventory - under level capacity with uncertain demand
Cycle inventory - batching leads to economies of scale, but also inventory
Decoupling buffers - Seperate activities in process, that do not have the same exact cycle time
Safety inventory - handle uncertainty in demand
Lean
To reduce all types of waste (non-value adding work) through JIT, quality control and inventory reduction
7 types of waste
1 Overproduction 2 Waiting time 3 Transport 4 Over processing 5 Motion 6 Defects/ inspection 7 Inventory
Causes of waste
- Muda - uselesness in processes, machinery and people
- Mura - unevenness in customer demand, lack of consistency, lack of document
- Muri - absurd, unreasonable burden
Lean techniques
Identify customer value
Manage the value stream (process mapping)
Focus on continuous flow
Employ pull system based on demand
Seeking perfection through waste elimination
Seeking perfection through process imprvement
Production flow synchronized with JIT
- One unit at a time
- takt - produce at rate of customer demand
- Kanban pull systems - puts a cap on the amount of WIP. A kanban card is attached to each batch. When an order arrives and the batch is taken to being processed, the card is sent upstream as a production order. No station produces more inventory than has been decided by management.
Quality methods to reduce deffects
- poka yoke - fool-proofing, e.g. there is only one way to put two pieces of wood together
- Defect-stop-alert, Stop whol process as soon as the defect is detected
- Build-in-quality, quality inspection is build in, performed at every station, in stead of only in the end.
Formal habits in lean operations (5Ss)
Sort - Keep only things that are needed in doing the job
Straighten - Keep things in order, position them in such a way that they can be reached easily when they are needed
Shine - Keep things tidy
Standardize - Perpetual neatness
Sustain - Develop a commitment and pride in keeping up to these standards
