Operations management Flashcards
Operations Management:
Definition
Operations management is the business function involved in the utilization of resources to manufacture products or provide services
Importance of operations management
Cost reduction
- creates efficiency and waste reduction
Increasing revenue
- profitability improves as products are superior and are returned less
Source of new innovation
- new products and services can be developed due to increased skills and knowledge
Profitability improvement
- reduction of errors and resources are effectively used
Effective customer service and delivery
- products and services proved are quality
Brand image and reputation
- high quality products and services improves brand image
Operations managers
Role:
responsible for managing the operations function
Operations management function:
-operations manager’s activities, decisions and responsibilities
Key tasks:
-operations planning
-operations scheduling
-operations control
Operations management model
Key elements:
-Operations-management strategies and objectives
-Operations-management activities
Operations-management strategies and objectives
Focuses on the needs of customers and continually formulates strategies to maintain and expand customer base
Six main elements of customer needs:
-higher quality
-lower costs
-shorter lead time
-greater adaptability
-lower variability
-high level of service
Higher quality
Do things right the first time
Main focus:
=> Error-free products & services
=> High quality image in the market
Lower costs
- Do things cost effectively
Main focus:
=> efficiency and waste reduction
Shorter lead time
- Do things quickly
Main focus:
=> Timely to meet market demand
=> Reduce equipment/plant downtime
=> Just-in-time raw material delivery
Greater adaptability
- Make changes quickly
Main focus:
=> Flexibility to meet increasing customer demand
=> Respond to new customer tastes
Lower variability
- Do things right every time
Main focus:
=> Maintain consistent levels of product quality
=> Maintain consistent levels of service delivery
High level of service
- Do things better
Main focus:
=> Provide better total products or services packages than competitors
=> Total Quality Management (TQM) approach
Transformation model
Three main components:
-inputs
-transformation process
-outputs
Inputs:
Comprise both the resources to be transformed and the resources needed to make the transformation possible
Resources to be transformed include:
-material
-customers
-information
Resources required to make transformation possible:
-human resources
-equipment and facilities
-technology
Transformation process
Converts inputs into outputs
Outputs
Products or services that conform to specifications
Characteristics of different operations
Volume of output:
- no. of items produced over a given period of time
Variety of output:
- range of different items produced over a goven period of time
Variation of output:
- demand pattern for the output ranges from highly regular, non-routine and unpredictable
Visibility of output:
- operation activities customers can directly observe
Process types for manufacturers
Five main categories are identified:
Project processes
- large individual and unique projects, e.g. construction projects
Jobbing processes
- small-scale, low volume processes, e.g. jewelry making
Batch processes
- manufacturing limited range of products in batches, e.g. fridges
Mass processes
- high volume production with little variety
Continuous systems
- high volume production of same product, little variety without a break
Operations-management activities
-operations design
-operations planning and control
-operations improvement
Operations design
Purpose:
- provide products, services and processes that satisfy customer needs
Key characteristics:
- design of products and services
- design of operations product or service processes to manufacture or provide the services
Operations planning and control
Reconciling the supply of products or services with demand by means of planning and control
Three dimensions:
- volume
- timing
- quality
Reconciliation of volume and timing dimensions
Three different integrated activities are performed:
- loading tasks
- sequencing tasks
- scheduling tasks
Capacity planning and control
The focus on the provision of manufacturing or service capacity of a particular operations process
Capacity:
- maximum level of activity over a period of time that the process can achieve under normal operating circumstances
Quality planning and control:
Quality:
- consistent conformity to customer expectations
- one of the main methods of adding value to products or services
Difference between expected quality and perceived quality is known as the quality gap
Steps in quality planning and control
Step 1: Defining the quality characteristics of the product or service
Step 2: Measuring the quality characteristics of the product or service
Step 3: Setting standards for each quality characteristic of the product or service
Step 4: Controlling quality against set standards
Step 5: Identifying and rectifying the causes of poor quality
Step 6: Continuously improving quality
Operations improvement:
Different types of performance standards
Four types of performance standards:
- historical performance standards
- target performance standards
- competitors’ performance standards
- absolute performance standards
Operations improvement:
Priorities for improvement
- Breakthrough improvement
- Continuous improvement
Operations improvement:
Failure prevention and recovery
Types of failures include:
- design failures
- facility failures
- staff failures
- supplier failures
- customer failures
Operations improvement:
Failure detection and analysis
- Operations managers should have mechanisms in place to detect failures
- There should be procedure to determine the cause of failure
- Operations managers should try to prevent failures once causes of failure has been identified
- There should be recovery procedures and contingency plans to minimize negative effects on customers
Operations improvement:
Definition of total quality management
The continual process of detecting and eliminating errors in manufacturing to improve customer experience by ensuring that every employee in the organization is quality conscious
ISO 9000
International quality management system
Operations improvement:
The implementation of TQM
- include TQM in the business strategy
- involve the support of top managers and employees
- use teams in improvement initiatives
- provide feedback on quality successes
- train employees in quality techniques and methods
