Retrenchment – means the discharge of

surplus labor or staff by the employer for any

reason
Redundancy – situation where the position of
employment of an employee is or will
become surplus to the requirements of the
employer’s business

Retirement – the termination of service of an employee on reaching retiring

age.

HR Trends (2018) According to the Society of Human Resource Management (SHRM)

1) Finding the right talent
2) Upskill, Reskill, Upskill
3) Online Learning
4) HR Chatbots
5) Flexible work arrangements
6) Employee Experience
7) Global Leaders
8) Community Focus
9) Artificial Intelligence in HR
10) Continuous Performance Management

MANAGEMENT INFORMATION SYSTEM

Importance of 1) To explore new IT business opportunities and prepare for threats
understanding information 2) Frame these opportunities and threats so others can understand,
technology evaluate, prioritize problems and solutions
3) Managers must lead the effort to pursue IT policies that best meet
organizational needs
4) IT systems (investments) need to customized to the needs of the
company
5) Managers with IT specialists should make choices about: scope, data,
tailoring of databases
6) Productivity requires innovations to business practices and improved
processes
7) Managers are the key to ensuring that IT innovations pay off; holistic
approach which includes: acceptance of change, addressing changes
in business processes and organizational structure, addressing new
employee roles and expectations, and establishing new measurement
and reward system.
8) Gaining sustainable competitive advantage
9) Managers should recognize the value of information
10) Managers require life-long learning and flexibility in determining their
best roles and career opportunities
11) Managers should understand how technology affects their industry and
the world at large.
Information technology Includes all tools that capture, store, process, exchange, and use
information

IT Infrastructure
- An organization’s defined set of IT hardware, software, and
networks

IT support organization
- Staff of people who plans, implements, operates, and supports IT
(sometimes outsourced)

Information system
- IT infrastructure integrated with employees and procedures
- Three (3) types:
1) Function IT
- improve productivity of individual users in
performing stand-alone tasks
2) Network IT
3) Enterprise IT

Function IT IS that improves the productivity of individual users in performing stand-

alone tasks
Example: CAD, word processors, decision support system (analytics), e-
learning systems

Network IT Improve communications and support collaboration

Example: Webcon, electronic directories
Enterprise IT To define interactions among their own employees/ business partners
Examples: TPS, ERP
Role of managers vis-à-vis Three critical responsibilities:
IT 1) Identifying appropriate opportunities to apply IT
2) Smoothing the way for its successful introduction and adoption
(change management)
3) Mitigating its associated risks
Reasons people resist 1) Parochial self-interest (afraid of changes in themselves)
change 2) Misunderstanding
3) Low tolerance to change
4) Different assessments of the situation
Theories on Organizational 1) Change Management Continuum Model (Dr. Conner)
Change Management - Describes the key activities needed to build commitment to change
- Seven stages grouped in three (3) major phases:
Inform (Contact, Awareness, Understanding)
Educate (Positive Perception, Adoption, Institutionalization)
Commit (Internalization)
- People will resist adoption if a stage is not completed
2) Unified Theory of Acceptance and Use of Technology
- Four key factors that directly determine a user’s acceptance and
usage of IT:
Performance expectancy – help job performance
Effort expectancy - ease
Social influence – referent others want to use
Facilitating conditions – supporting infrastructure exists
3) Three Worlds of IT Model
- Successfully implementing three types of IT requires different types
of organizational change
- Andrew McAfee: companies need to change the way they get work
done to enable improved performance of IT
- Four organizational complements:
1) Better-skilled workers
2) Higher levels of teamwork
3) Redesigned processes
4) New decision rights

Manager’s Role in Three Worlds of IT Model:

Ensuring that IT Risks are Manager’s roles:
Mitigated: Manager’s Role 1) Ensuring that physical IT assets are protected against loss or damage
and Types of IT Risks 2) Ensuring that data assets are secure from unwanted intrusion, loss, and
alteration
3) Ensuring that personal data is secured to protect individual’s privacy
rights

IT Risks:
1. Inability to continue operations due to a natural disaster or accident
2. Inability to continue operations due to a deliberate attack on IT assets
3. Compromise of confidential data about organizational plans, products,
and services
4. Compromise of personal, private data about employees and customers
5. Violation of legally mandated procedures for controlling IT assets
6. Violation of established, generally accepted accounting principles
(Internal Control principles)
7. Violation of the organization’s defined procedures and/or accounting
practices
8. Loss of physical IT assets
9. Inappropriate use of IT resources that places firm in a compromising
position
10. Inappropriate use of IT resources that reduces productivity

Strategic Planning Process that helps managers identify desired outcomes and formulate
feasible plans to achieve their objectives by using available resources and
capabilities

With consideration to the dynamic environment

Relationship between 1) There must be alignment between business and IT, working in support
Strategic Planning and IT to the key objectives of the business
 2) IT and business managers must have a shared vision of where the
organization is headed and agree on its key strategies
3) Alignment is needed for efficiency. If not aligned managers might
consider it as an overhead cost that should be minimized.
Approaches to Strategic 1) Issue-based
Planning - Begins by identifying and analyzing key issues that face the
organization, setting strategies to address those issues, and
identifying projects and initiatives that are consistent with the
strategies
2) Organic
- Defines the organization’s vision and values and then identifies
projects and initiatives to achieve the vision while adhering to the
values
3) Goal-based
- Involves identifying the mission and vision of the organization,
identifying objectives and goals that support the mission, setting
strategies to achieve the goals and identifying projects and
initiatives;
- Most frequently used approach
Strategic Planning Process Also, Strategic Management Process – use framework of David

This is more focused on projects?

1) Define mission and vision
2) Conduct internal/external assessment to define objectives
3) Establish goals
4) Set strategies
5) Define measures
6) Deploy objectives, goals, and measures
7) Identify project initiatives
8) Prioritize project initiatives
9) Execute project initiatives
10) Measure and evaluate results
Objectives vs. goal Objective
- statement of a compelling business need that an organization must
meet to achieve its vision and mission
- what must be accomplished

Goal
- specific result that must be achieved to reach an objective
- how to determine whether the objective is being met

Several goals, single objective

◊ key role of management is to recognize and drop goals that are no longer
relevant
Strategy Describes actions an organization will take to achieve its vision/ mission,
objectives, and goals
Gives the company an edge in the struggle with its rivals and better chance
at winning in the long-run competitive game.
Measures Metrics that track progress in executing chosen strategies to attain an
organization’s objectives and goals

Importance of Project Core competency:

Management Can be leverage widely to many products and markets; hard for
competitors to imitate
A key to the company’s success
Project Temporary endeavor;
Creates a unique product, service, or result;

Project Variables
Project Management
Knowledge Areas
Modes for Handling
Conflicts (Blake and
Mouton, 1964)
Business Process and IT
Outsourcing, definition and
types
Reasons for outsourcing
Issues with outsourcing
Attempts to achieve specific business objectives;
Subject to certain constraints,
Consistent with business strategies
Scope
- defines what is or not included in a project
Cost
- capital, expenses, internal-cross charges
Time
- duration, completion
Quality
- degree to which project meets needs of its users
User Expectations
- system requirements, system options, user documentation, user
acceptance test
Scope Management
Time Management – Work Breakdown Structure (WBS)
Cost Management
Quality Management
Human Resources Management – Wilson Learning Social Style Profile
(Analytical, Driver, Amiable, Expressive; Assertiveness and
Responsiveness)
Communications Management
Risk Management
Procurement Management
Project Integration Management – assimilation of all eight other project
management areas
1) Confrontation (face)
2) Compromise (give and take)
3) Smoothing (avoid)
4) Forcing (win-lose)
5) Withdrawal (retreat; least desirable)
Outsourcing – arrangement in which one company contracts with another
organization to provide services that could be provided by company
employees
Offshore outsourcing – located in another country
Business process outsourcing – business functions, provided by Global
service providers
1) To cut and stabilize costs
2) To improve focus
3) To upgrade capabilities and services
1) Quality problems
2) Legal issues
3) Negative impact on customer relationships and satisfaction
4) Data security and integrity issues
5) Special issues: cost advantage, turnover, intellectual property rights,
technology issues
Effective Outsourcing 1) Establish a “smart” outsourcing strategy
Process 2) Evaluate and select appropriate activities and projects for outsourcing
3) Evaluate and select appropriate service providers
4) Evaluate service provider locations
5) Benchmark existing service levels (reasonable baseline for negotiating
target results and costs, definition of SLA, performance evaluation)
6) Develop an outsourcing contract
7) Establish an outsourcing governance process
8) Measuring and evaluation results

Corporate Governance Set of processes, customs, rules, procedures, policies and traditions that
determine how to direct and control management activities
People involved: BOD, CEO, Senior executives, Shareholders

Issues address by Corporate 1) Preparation of FS

Governance 2) Choice of accounting principles and policies
3) Establishment of internal controls
4) Hiring external auditors
5) Nomination and selection of people to the BOD
6) Compensation of the CEO and other senior managers
7) Risk Management
8) Dividend policies

IT Governance Decision-making process that involves investments in IT:

Who makes the decision
Who is held accountable for the results
How the results of decisions are communicated, measured, and monitored

Responsibility of the executive management

Primary Goals of IT 1) Value
Governance - Good value: alignment between business objectives and IT
initiatives
2) Risks
- Accountability and internal controls in the organization

Internal Controls Processes established by the organization’s BOD, managers, and IT

systems to provide reasonable assurance for the effectiveness and
efficiency of operations, reliability of financial reporting, and compliance
with applicable laws and regulations.
Policies or procedures put in place to safeguard an asset, provide reliable
financial information, promote efficient and effective operations, and
ensure policy compliance.

Importance of Internal 1) Help align objectives of the business

Controls 2) Safeguard assets
3) Prevent and detect fraud and error
4) Encourage good management
5) Allow action to be taken against undesirable performance
6) Reduce exposure to risks
7) Ensuring proper financial reporting
Internal Control Criteria/ 1) Completeness
Assertions 2) Accuracy
3) Authorization
4) Validity
5) Existence
6) Error handling
7) Segregation of duties
8) Presentation and disclosure

Types of Internal Control 1) Controls to safeguard assets

2) Controls to ensure financial information is accurate and reliable
3) Controls to ensure compliance with financial and operational
requirements
4) Controls to assist in achieving the business objectives

Five Key Activities for Goals:

Effective IT Governance 1) Value Delivery
2) Risk Management

Methods for achieving the goals:

3) Strategic Alignment
4) Resource Management

Means by which management tracks how well its IT governance

efforts are succeeding:
5) Performance Management

IT Governance: Purpose in 1) IT organization is better aligned and integrated with the business, risks
Management and costs are reduced, and IT helps the company gain a business
advantage
2) Ensures the delivery of real value from IT expenditures and to mitigate
IT-related risks

IT Governance Frameworks 1) IT Infrastructure Library (ITIL)

Best practices and criteria for effective IT services (helpdesk, network
security, and IT operations)
2) Control Objectives for Information and Related Technology (COBIT)
Provides guidelines for more than 30 processes and spans wide range
of IT-related activities
Useful in improving the quality and measurability of IT governance or to
implement a control system for improved regulatory compliance.
PDCA Plan-Do-Check-Act Model
- Tried and proven method that can be applied to a specific targeted
process that has been identified for improvement
- Plan: Identify target area
- Do: Implement
- Check: Measure results of change
- Act: Worth continuing or aborted?
Business continuity plan Defines the people and procedures required to ensure timely and orderly
(BCP) resumption of an organization’s essential, time-sensitive processes with
minimal interruption

Process:
1) Identifying vital records and data
(how stored, backed up)
2) Conducting a business impact analysis
(identify unique requirements, recovery time, business
function)
3) Defining resources and actions required to recover
(document all necessary resources for recovery, identify
steps)
4) Defining emergency procedures
(steps to be taken)
5) Identifying and training business continuity teams
6) Training employees
(recognition of and response to disaster warnings)
7) Practicing and updating the plan
(Plan should be constantly updated to account for changes
in personnel, roles, hardware/software, suppliers/customers)

Disaster recovery plan Subset of business continuity plan, and focuses on keeping components of
the IT infrastructure functioning during a disaster or recovering them
quickly afterward

Importance of Collaboration 1) Collaboration is essential to the success of human endeavor

Tools and Wireless
Networks in Management
2) Brings business closer to customers
3) Real-time access to pertinent corporate data
4) Ability to hold virtual meetings and deliver training
5) Stay connected through instant messaging, web conferencing, and
desktop sharing

Types of Collaboration Tools Bulletin boards/online forums

Blogs
Calendaring
Desktop sharing – remote log-in
Instant messaging
Podcasts
RSS (Really Simple Syndication) feeds
Shared workspaces
Web conferencing – webcast, webinar
Wikis – create/edit web page content
Social media

Wireless Communications Used to keep in touch with employees, customers, and business partners;
access important corporate data and business applications; interact in the
internet and web

Desired to have secure communications

Extremely high-speed communications

Types of Wireless
Communications
Importance of E-business in
management
Business models
E-commerce process
E-business critical success
factors
Issues Associated with E-
business
Crowdsourcing
Robust applications
“always, anywhere” availability
Cell phone services
Cell phone technology generations (1G, 2G, 3G, 4G, 5G)
Wi-Fi solution for local area networks (wireless fidelity)
WiMax (Worldwide Interoperability for microwave access); like Wi-fi only
over greater distances and at faster transmission speeds
E-business – the transformation of key business processes through the
use of internet technologies
1) Essential to the survival of some business organizations
2) Managers should understand how internet differs from the traditional
venues for business activity so they must employ business models
appropriate to the internet
B2B – exchange of goods between businesses via industry consortia-
sponsored markets
B2C – business organizations and individuals
C2C – among individuals, typically facilitated by a third party (ex. eBay)
E-Government – Use of IT by government agencies to transform relations
between G2C, G2B, G2G.
User placing an order
Request to Payment Gateway
Payment gateway request for confirmation to bank
Funds transferred from bank to merchant
Bank response
Payment gateway response
Response from merchant’s web server
1) Identifying appropriate e-business opportunities
2) Acquiring necessary organizational capabilities
3) Directing potential customers to your site
Strategies: search engine optimization, paid listing, banner ads
4) Providing a good customer online experience
5) Providing an incentive for customers to purchase and return in the
future
6) Providing a timely, efficient order fulfillment
7) Offering a variety of easy and secure payment methods
8) Handling returns smoothly and efficiently
9) Providing effective customer services
1) Data privacy
2) Cultural and linguistic obstacles
3) Difficulty integrating web and non-web sales and inventory data
4) High costs associated with the development and operation of an
effective website
When business provide enabling technologies that allow people to create,
modify, and oversee the development of a product or service
Not limited to internet (ex. American Idol)
Enterprise Resource A set of core software modules that enable organizations to share data
Planning across the entire enterprise through the use of a common database;
enables people in various organizational units to access and update the
same information based on permission levels assigned within the system.
Aims to enable easy access to business data and to create efficient,
streamlined work processes.

Often designed to not have the entire package implemented, companies

can pick and choose which modules to install based on needs

Customer Relationship Enterprise system that supports the processes performed by all entities
Management (CRM) System involved in creating or increasing the demand for an organization’s
products and services; enable employees who interact directly with
customers to provide better, more personal service, thus, increasing
customer satisfaction and loyalty; must effectively capture and present
customer information so that employees can successfully use the data.

End-users: People responsible for product development, sales, marketing,

and customer service

Supply Chain Management Involved in planning, executing, monitoring, and controlling of the flow of
materials, information, and cash as they move from supplier to
manufacturer to wholesaler to retailer, to supplier

Goal: lower costs of inventory levels while still meeting customer

requirements for timely delivery of high quality products

Major processes: demand planning, sourcing, manufacturing, logistics,

customer service

Benefits of Implementing 1) Establish standardized business processes

ERP 2) Lower cost of doing business (improved coordination and sharing,
reduced inventory costs, faster collection of receivables)
3) Improve overall customer experience (eliminate out-of-stock situations)
4) Facilitate consolidation of financial data (rapid consolidation, dealing
with differences)
5) Support global expansion
6) Provide fully compliant systems (compliance with many laws)

ERM Issues 1) Post start-up problems

2) High costs
3) Lengthy implementation
4) Difficulty in measuring a return of an ERP investment
5) Organizational resistance

ERP System Implementation Initiation

Process Requirements analysis
ERP software selection
Design
Implementation
Maintenance and continuous improvement
Best Practices to Ensure 1) Ensure senior management commitment and involvement
Successful ERP 2) Choose the right business partners
Implementation 3) Assess the level of customization needed
4) Avoid increase in project scope
5) Plan for effective knowledge transfer
6) Test thoroughly
7) Plan for a high level of initial support

ERP Vendors SAP, Oracle/PeopleSoft, SSA Global, Microsoft (Great Plains)

ERP Trends ERP Solutions targeted for SMEs
ERP as a service
Open source ERP software
Business Intelligence Wide range of applications, practices, and technologies for the extraction,
translation, integration, analysis and presentation of data to support
improved decision making;
Data used is pulled from multiple databases and may be internally or
externally generated;
Employed to make predictions about future conditions and then make
adjustments to better meet forecasted needs

Examples: Spreadsheets, Reporting and Querying Tools, Online Analytical

Processing (OLAP), Drill-down analysis, Data mining
(data repository creation, pattern recognition, deployment),
reality mining (study of human interaction based on data
gathered from mobile phones)
Data Warehouse / Data Data warehouse – stores large amount of historical data in a form that
Marts readily supports analysis and management decision making
Data mart – smaller version

Business Performance Enables the continuous and real-time analysis of operational data to
Management measure actual performance and forecast future performance;
Creates improved feedback loops for the critical processes of the
organization so that problems can be identified and eliminated before they
become serious
Tools: Balanced scorecard / Dashboard
Balanced Scorecard Track performance over time, communicate and drive organizational
strategy, identify strategic initiatives and conduct periodic performance
reviews to assess if goals are being met

Four perspectives: Financial, Customer, Business Process, Learning and

Growth
KPI: metrics consisting of direction, measure, target, and time frame

Dashboards Present a set of KPIs about the state of a process at a specific point in time
Displaying results: maps, gauges, bar charts, trend lines, scatter diagrams,
etc.
Designed in such a manner that users can click on a section of the chart
displaying data in one format and drill down into the data to gain insight
into more specific areas.
Employing the BPM Process Using Business Intelligence:
Plan: Use to gather data
Do: Analyze the data to identify the root causes behind the execution;
develop a model to simulate the impact of the alternatives
Check: Use to gather additional data
Act: Gather basic data about the operations
Business Model A design for the successful operation of a business, identifying revenue
sources, customer base, products, and details of financing.
Components of a Business Key partnerships
Model Key activities
Key resources
Value propositions
Customer relationships
Channels
Customer segments
Cost structures
Revenue streams

Knowledge Management Practice concerned with increasing awareness, fostering learning,

speeding collaboration and innovation and exchanging insights
Creating value from an organization’s intellectual assets through codifying
what employees, suppliers, business partners and customers know and
then sharing that information with employees and even with other
companies to devise best practices.

Goal: improve the creation, retention, sharing and reuse of knowledge.

Importance of Knowledge 1) The right people leave
Management 2) The people can ruin a supply chain
3) The biggest risk is internal

Having the wrong/incompetent people can certainly ruin the supply chain;
having the right people can also be disastrous if there is no contingency
plan on how to replace them.

Types of Knowledge 1) Tacit (less concrete, more difficult to document, measure)

2) Explicit (can be captured and written down in documents or databased)
Knowledge Conversion
Process

Benefits of Implementing 1) Foster innovation by encouraging free flow of ideas

Knowledge Management 2) Leverage the expertise of people across the organization
3) Capture the expertise of key individuals as they retire

Best practices for selling Connect the KM effort to organizational goals and objectives
and implementing a KM Identify valuable tacit knowledge
project Start with a small pilot involving enthusiasts
Get employees to buy in
Technologies that Support Communities of practice – group with common set of goals and interests,
KM sharing/learning to meet goals

Social network analysis – technique to document and measure flows of

information between individuals, workgroups, etc.

Web 2.0 technologies – changes in technology and web site

Business rule management systems – define, execute, monitor, maintain

the decision logic that is used by operational systems to run the
organization

Enterprise search software – to find info

Enterprise Architecture Set of models that describe the technical implementation of an
organization’s business strategy.

“form ever follows function”

The organization’s business processes must be able to provide the desired

functionality.

Importance of EA • Provides the overall foundation for achieving an organization’s strategic

vision
• Can enable organizations to facilitate the delivery of new products and
services
• Provide meaningful value propositions from their strategic initiatives
• All at the lowest possible total cost of ownership

EA enables increase in employees’ effectiveness by enabling high-order

thinking (innovate, incremental improvement).

It develops new value propositions of interest to customers (new tangible

benefits for customers).

Software Architecture Styles Centralized – uses mainframe computer supporting variety of local devices
Distributed (Client/Server) – more scalable
Service-Oriented –

Ethics Set of beliefs about right and wrong behavior; ethical behavior conforms to
generally accepted social norms—many of which are almost universally
accepted

How to Improve Ethics Appointing a Corporate Ethics Officer

Ethical Standards Set by Board of Directors
Establishing a Corporate Code of Ethics
Requiring Employees to Take Ethics Training
Including Ethical Criteria in Employee Appraisals

Issues on Ethics in IT Privacy: Companies use this information to target marketing efforts to
consumers who are most likely to buy their products and services.
 Right to privacy
Treating customer data responsibly
Workplace monitoring

Cybercrime and Computer security:

Cybercrime refers to criminal activity in which a computer or a computer
network is used as a tool to commit a crime or is the target of criminal
activity.

Electronic fraud is a broad class of cybercrime that involves the use of

computer hardware, software, or networks to misrepresent facts for the
purpose of causing someone to do or refrain from doing something that
causes loss.

Viruses
Worms
Distributed Denial-of-Service-Attack (DDOS)

Defensive Measures Risk Assessment

Establishing a Security Policy
Educating Employees, Contractors, and Part-Time Workers
Installing a Corporate Firewall
Intrusion Prevention Systems
Installing Antivirus Software on Personal Computers
Implementing Safeguards Against Attacks by Malicious Insiders
Addressing the Most Critical Internet Security Threats
Conducting Periodic IT Security Audits
Detection Even when preventive measures are implemented, no organization is
completely secure from a determined attack. Organizations often employ
an intrusion detection system to minimize the impact of intruders.

An intrusion detection system is software and/or hardware that monitors

system and network resources and activities, and notifies network security
 personnel when it identifies possible intrusions from outside the
organization or misuse from within the organization.

Response Plan

MARKETING MANAGEMENT
Marketing A process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return

Marketing Process Create value for customers and build customer relationships
1) Understand the marketplace and customer needs and wants
2) Design a customer value-driven marketing strategy
3) Construct an integrated marketing program that delivers superior value
4) Build profitable relationships and create customer delight

Capture value from customers in return

5) Capture value from customers to create profits and customer equity

Customer needs, wants, and Needs: states of deprivation

demands Wants: Form that needs take
Demands: Wants backed by buying power
Customer value satisfaction Marketers should set the right level of expectations in order to increase
value and satisfaction offered to customers
Marketing management The art and science of choosing target markets and building profitable
relationships with them.

Answers the following:

What customers will we serve?
Market segmentation – refers to dividing the markets into segments
of customers who have distinct needs,
characteristics, or behavior
and who might require separate
products or marketing mixes
Target marketing – process of evaluation each market segment’s
attractiveness and selecting one or more
segments to enter
 Handling objections
Closing
Follow-up

Types of Sales promotion Consumer promotions

Samples, coupons, cash refunds, price packs, premiums,
advertising specialties, patronage rewards, point of purchase displays,
contests,
Trade promotions
Discounts, allowances, free goods, specialty advertising
Sales Force promotions
Conventions and trade shows, sales contests

Factors in the growth of Product managers under pressure to increase current sales
sales promotions More competition
Competing brands offer less differentiation
Advertising efficiency has declined due to rising costs, clutter, legal
constraints
Consumers are more deal-oriented
Large retailers are demanding more deals from suppliers

Developing a sales Size of the incentive

promotion program Conditions for participation
Promote and distribute the program
Length of the program
Evaluation of the program

OPERATIONS MANAGEMENT
Operations management A business function responsible for planning, coordinating, and controlling
the resources needed to produce products and services for a company.

A management function, organization’s core function.

Transforms inputs to outputs

The management of systems of processes that create goods and/or

provide services. Includes:
- Forecasting
- Capacity planning
- Scheduling
- Inventory management
- Assuring quality
- Motivating employees, etc.

Types of operations:
- Goods producing
- Storage/ transportation
- Exchange
- Entertainment
- Communication
 Interfaces:
- Industrial engineering
- Maintenance
- MIS
- Public Relations
- Personnel
- Accounting
- Purchasing
- Distribution

Responsibilities:
Planning:
- Capacity
- Location
- Products/services
- Make or buy
- Layout
- Projects
- Scheduling

Organizing
- Degree of centralization
- Subcontracting

Staffing
- Hiring/laying off
- Use of overtime

Directing
- Incentive Plans
- Issuance of work orders
- Job assignments

Controlling
- Inventory
- Quality

Operations management Inputs (Land, Labor, Capital) à Transformation/Conversion processà

process Outputs(Goods, services)

Control and Feedback

Value Added
Operations Management’s To add value:
Transformation 1) Increase product value at each stage
Role/Importance 2) Value added is the net increase between output product value and
input material value
Provide an efficient transformation
1) Performing activities well for the least possible cost

Application:
n Marketing is not fully able to meet customer needs if they do not
understand what operations can produce
n Finance cannot judge the need for capital investments if they do not
understand operations concepts and needs
n Information systems enables the information flow throughout the
organization
n Human resources must understand job requirements and worker
skills
n Accounting needs to consider inventory management, capacity
information, and labor standards

Key differences between

manufacturing and service
Historical Development of Late Industrial revolution
OM 1700s
Early Scientific management
1900s
1930s- Human relations movement
60s
1940s- Management science
60s
1960s Computer age
1970s Environmental issues
1980s JIT and TQM
1990s Reengineering
1980s Global competition
1990s Flexibility
1990s Time-based competition
1990s Supply chain management
2000s Electronic commerce
2000s Outsourcing and flattening of world

Today’s OM Environment:
- Customers demand better quality, greater speed, lower costs
- Companies implementing lean system concepts (a total systems
approach to efficient operations)
- Recognized need to better manage information using ERP and
CRM systems
- Increased cross-functional decision making
Systems Approach Synergy: The whole is greater than the sum of its parts.

Quantitative Approaches Linear programming

Queuing techniques
Inventory models
Project models
Statistical models

Pareto phenomenon - 80% of the outputs comes from 20% of the inputs
- Vital few things are important for reaching an objective or solving a
problem

Trends The internet

E-commerce

Supply chain management

Suppliers’ suppliersàDirect
suppliersàProduceràDistributoràFinal
consumer

Continuing trends:
Quality and process improvement
Technology
 Globalization
Operations strategy
Environmental issues

Competitiveness How effectively an organization meets the needs of customers relative to

others that offer similar goods or services

Elements:
Price, Flexibility, Time, Differentiation, Quality Service
Strategy A plan for existence for an organization; comes from the company’s
mission (reason for existence, stated in a mission statement), guide for
developing tactics (the actions taken to accomplish strategies)

MissionàStrategyàTactics

New Strategies:
Quality-based
Time-based

Distinctive Competencies Special attributes or abilities that give an organization a competitive edge

Examples:
Environmental scanning Considering of events and trends that present threats or opportunities for a
company

PESTLE

Key Internal Factors:

Human resources
Facilities and equipment
Financial resources
Customers
Products and services
Technology
Suppliers

Productivity Outputs/Inputs

Measuring methods:
Partial (single input):
- Labor productivity
- Machine productivity
- Capital productivity
- Energy productivity

Multi-factor (Multiple inputs):

Total (total inputs)

Factors influencing productivity:

- Capital
1) New workers
2) Cuts in health benefits
 3) Safety
4) Layoffs
5) Labor turnover
6) Design of workspace
7) Incentive plans that reward productivity
- Quality
1) Standardization
2) Scrap rates
- Management
1) Searching for lost or misplaced items
- Technology
1) Use of internet
2) Computer viruses
3) Shortage of IT workers

Improving productivity 1) Develop productivity measures

2) Determine critical (bottleneck) operations
3) Develop methods for productivity improvements
4) Establish reasonable goals
5) Get management support
6) Measure and publicize improvements
7) Don’t confuse productivity with efficiency

Forecasting Statement about the future; help managers plan the system and its use
Assumes causal system (past determines the future)

1) Forecasts are rarely perfect (has an element of randomness)

2) More accurate for groups than individual items
3) More accurate in shorter term than longer term horizons; Accuracy
decreases as time horizon increases.

Application:
Accounting – cost/profit estimates
Finance – cash flow and funding, forecast stock prices, financial
performance
Human Resources – Hiring/recruiting/training
Marketing – Pricing, promotion, strategy, predict demand and future sales
MIS - IT/IS systems, services, ability to share databases and information
Operations – schedules, MRP, workloads
Product/service design – new products and services

Types:
Qualitative:
Judgmental – subjective inputs (executive opinions, outside opinions,
opinions of managers and staff)
Delphi method
Quantitative:
Time series – historical data (trend, seasonality, irregular variations, random
variations)
Naïve forecast

Factors to consider when
selecting a model
Elements of a good forecast
Steps in forecasting
Product or service design
activities
Reason for product or
service design
Trends in product and
service design
Quality function deployment
Reverse Engineering
Research and development
(R&D)
Associative models – uses explanatory variables to predict the future
Predictor variables, regression, least squares line
1) Amount of data available
2) Degree of accuracy required
3) Length of forecast horizon
4) Patterns present in the data
Timely, reliable, accurate, meaningful, written, easy to use
1) Determine the purpose of the forecast
2) Establish a time horizon
3) Select a forecasting technique
4) Gather and analyze data
5) Prepare the forecast
6) Monitor the forecast
1) Translate customer wants and needs into product and service
requirements
2) Refine existing products and services
3) Develop new products and services
4) Formulate quality goals
5) Formulate cost targets
6) Construct and test prototypes
7) Document specifications
1) To be competitive
2) Increase business growth and profits
3) To avoid downsizing with development of new products
4) To improve product quality
5) Achieve cost reductions in labor or materials
Overall objective: To be capable of producing or delivering a given product
or service
Customer satisfaction
Reducing time to introduce new product or service
Reducing time to produce product
The organization’s capabilities to produce or deliver the item
Environmental concerns
Designing products and service that are user-friendly
Designing products that use less material
An approach that integrates the “voice of the customer” into the product
and service development process.
“House of quality”: used to define relationship between customer desires
and firm/product capabilities
The dismantling and inspecting of a competitor’s product to discover
product improvements.
Organized efforts to increase scientific knowledge or product innovation
and may involve basic research (knowledge advancement without near-
term expectations of commercial applications), applied research (achieves
 commercial applications), and development (converts results of applied
research into commercial applications).

Issues on Product/Service 1) Legal - FDA, OSHA, IRS; product liability (manufacturer is liable for
Design any injuries/damages caused by a faulty product), uniform
commercial code (products carry an implication of merchantability
and fitness)
2) Ethical (releasing products with defects)
3) Environmental (waste disposal)
Advantages and Advantages
disadvantages of 1) Fewer parts to deal with in inventory and manufacturing
standardization 2) Reduced training costs and time
3) More routine purchasing, handling, and inspection procedures
4) Orders fillable from inventory
5) Opportunities for long production runs and automation
6) Need for fewer parts justifies increased expenditures on perfecting
designs and improving quality control procedures

Disadvantages
1) Designs may be frozen with too many imperfections remaining
2) High cost of design changes increases resistance to improvements
3) Decreased variety results in less consumer appeal
Mass customization A strategy of producing standardized goods and services, but
incorporating some degree of customization
Delayed differentiation - a postponement tactic – producing but not quite
completing a product or service until customer preferences or
specifications are known.

Modular design – a form of standardization in which component parts are

subdivided into modules that are easily replaced or interchanged. Allows
for:
a) Easier diagnosis and remedy of failures
b) Easier repair and replacement
c) Simplification of manufacturing and assembly
Reliability The ability of a product, part, or system to perform its intended function
under a prescribed set of conditions.
Opposite: failure
Normal operating conditions: set of conditions under which an items’
reliability is specified.
How to improve reliability Component design, production/assembly techniques, testing,
redundancy/backup, preventive maintenance procedures, user education,
system design
Differences between
product and service design Product Service
tangible Intangible
Created and held to be sold at a Created and delivered at the same
later time time
Inventoriable Not inventoriable

Service Variability and
Customer Influence Service
Design
Capacity Planning
How to develop capacity
alternatives
Important considerations in
planning service capacity
Decision Theory
Decision Theory Elements
Decision Theory Process
Causes of Poor Decisions
Highly visible to customers
More saturated Low barrier to entry since highly
differentiated
Location not that important as Location important
goods may be shipped
Service Variability Degree of Contact Type of Purchase
with Customer
None None Internet Purchase
Low Low Telephone Purchase
Moderate Moderate Dept. Store Purchase
High High Customized Clothing
The upper limit or ceiling on the load that an operating unit can handle
(what, how, when)
Importance:
1) Impacts ability to meet future demands
2) Affects operating costs
3) Major determinant of initial costs
4) Involves long-term commitment
5) Affects competitiveness
6) Affects ease of management
1) Design flexibility into systems
2) “Big picture” approach to capacity changes
3) Prepare to deal with capacity “chunks”
4) Attempt to smooth out capacity requirements
5) Identify the optimal operating level
1) Location should be near customers
2) Capacity must be match with the timing of demand
3) Identify peak demand periods (volatility of demand)
Represent a general approach to decision making which is suitable for a
wide range of operations management decisions, including: capacity
planning, product and service design, location planning, and equipment
selection.
A set of possible future conditions exists that will have a bearing on the
results of the decision
A list of alternatives for the manager to choose from
A known payoff for each alternative under each possible future condition
Identify possible future conditions (states of nature)
Develop a list of alternatives, one is to “ do nothing”
Determine the payoff associated with each alternative for every future
condition
If possible, determine the likelihood of each possible future condition
Evaluate alternatives according to some decision criterion and select the
best alternative
1) Bounded Rationality
 - The limitations on decision making caused by costs,
human abilities, time, technology, and availability of
information
2) Suboptimization
- The result of different departments each attempting
to reach a solution that is optimum for that
department

Objectives, decision making Maximin

under uncertainty Maximax
Laplace – alternative with the best average payoff of any alternatives
Minimax Regret – alternative with the least worst regrets

Expected value of perfect Difference between expected payoff under certainty and under risk
information
Considerations in a Make or 1) Available capacity
Buy decision 2) Expertise
3) Quality consideration
4) Nature of demand
5) Cost
Process Selection Factors:
Variety (how much)
Flexibility (what degree)
Volume (expected output)

Types:
Job shops
Batch processing
Repetitive/assembly
Continuous processing
Projects
Service Process Design 1) Establish boundaries (scope and limitations)
2) Identify steps involved
3) Prepare a flowchart
4) Identify potential failure points (WCGWs)
5) Establish a time frame
6) Analyze profitability

Automation Machinery that has sensing and control devices that enables it to operate
Layout The configuration of departments, work centers, and equipment, with
particular emphasis on movement of work (customers or materials) through
the system
Basic types: product layouts, process layouts, fixed-position, combined
layouts

Importance of decisions:
1) It requires substantial investments of money and effort
2) Involves long-term commitments
3) Has significant impact on cost and efficiency of short-term
operations
Line Balancing The process of assigning tasks to workstations in such a way that the
workstations have approximately equal time requirements

Linear Programming Techniques consist of a sequence of steps that will lead to an optimal
solution to problems, in cases where an optimum exists.

Simplex A linear programming algorithm that can solve problems having more than
two decision variables
Job Design Specifying the content and methods of job

Advantages:
For management
Simplifies training
High productivity – having standard tools and guidelines ensure that work
performed by employee is at par with expectations/targets, thus job is
properly and/or timely done
Low wage costs – the faster the job is done, the lower the labor cost is.

For labor
Low education and skill requirements
Minimum responsibilities
Little mental effort needed

Disadvantages:
For management:
Difficult to motivate quality
Worker dissatisfaction, possibly resulting in absenteeism, high turnover,
disruptive tactics, poor attention to quality

For labor:
Monotonous work
Limited opportunities for advancement
Little control over work
Little opportunity for self-fulfillment

Behavioral Approaches to Job enlargement (horizontal loading)

Job Design Job rotation
Job enrichment (vertical loading)
Motion study The systematic study of the human motions used to perform an operation

Purpose of Developing Work 1) Eliminate unnecessary motions

Methods 2) Combine activities
3) Reduce fatigue
4) Improve the arrangement of the workplace
5) Improve the design of tools and equipment

Learning curves Time required to perform a task decreases with increasing repetitions.
Application:
1) Manpower planning and scheduling
2) Negotiated purchasing
 3) Pricing new products
4) Budgeting, purchasing, and inventory planning
5) Capacity planning

Location Decisions Nature:

Importance
Long term commitment/costs regarding:
1) Marketing strategy
2) Cost of doing business
3) Growth
4) Depletion of resources

Objectives
1) Profit potential

Options
1) Expand existing facilities
2) Add new facilities
3) Move

Factors to consider:
1) Regional factors (location of RM, markets, labor, climate and taxes,
foreign locations)
2) Community (quality of life, services, attitudes, taxes, environmental
regulations, developer support)
3) Multiple plant strategies (Product plant strategy, market area plant
strategy, process plant strategy)
4) Site-related factors (land, transportation, environmental, legal)

Trends in Locations Foreign producers locating in US to take advantage of the “Made in USA”
label and fight effects of currency fluctuations
JIT manufacturing
Microfactories
Information highway

Location considerations
Manufacturing/Distribution
Cost focus
Transportation modes/costs
Energy availability/costs
Labor cost/ availability/ skills
Building/ leasing costs
Service/Retail
Revenue focus
Demographics; age, income, etc.
Population/ drawing area
Competition
Traffic volume/patterns
Customer access/ parking

Other considerations:
Foreign government
- policies on foreign ownership of production facilities (local content,
import restrictions, currency restrictions, environmental regulations,
local product standards
- stability issues
 Cultural differences
- living circumstances for foreign workers/dependents
- religious holidays/ traditions

Customer preferences
- possible buy locally sentiment

Labor
- Level of training and education of workers
- Work practices
- Possible regulations limiting number of foreign employees
- Language differences

Resources
- Availability and quality of raw materials, energy, transportation

Evaluating Locations CVP analysis

Transportation Model
Factor rating
Center of Gravity method

Quality The ability of a product of service to consistently meet or exceed customer

expectations.
Dimensions of Quality 1) Performance – main characteristics
2) Aesthetics – appearance, 5 senses
3) Special features – extra characteristics
4) Conformance – how well product/service conforms to customer’s
expectations
5) Safety – risk of injury
6) Reliability – consistency of performance
7) Durability – useful life of product/service
8) Perceived Quality – reputation; indirect evaluation of quality
9) Service after sale – handling customer complaints/ checking customer
satisfaction
Determinants of Quality Design
Ease of use
Conformance to design
Service
Consequences of Poor 1) Loss of business
Quality 2) Liability
3) Productivity
4) Costs
- Failure costs (from defective parts/products/faulty services)
- Internal failure costs (to fix problems that are detected before delivery)
- External failure costs (to fix problems after delivery)
- Appraisal costs (inspection costs)

Responsible for Quality
Ethics and Quality
Key contributors to Quality
Management
Deming’s 14 points
Quality Certification
Phases of Quality Assurance least progressive
- Prevention costs (all TQ training, TQ planning, customer assessment,
process control, and quality improvement costs to prevent defects
from occurring)
Top management
Design Procurement
Product/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
Having knowledge of substandard work and failing to correct and report it
in a timely manner is unethical.
Substandard work: defective products, substandard service, poor designs,
shoddy workmanship, substandard parts and materials
Deming 14 points; special and common causes for variation
Juran Quality is fitness for use; quality trilogy
Crosby Quality is free; zero defects
Ishikawa Cause-and-effect diagrams; quality circles
1) Constancy of purpose
2) Adopt a new philosophy
3) Cease dependence on inspection to achieve quality
4) Minimize total cost (one supplier for any item)
5) Improve constantly and forever the system of production and
service
6) Institute training on the job
7) Institute leadership
8) Drive out fear
9) Break down barriers
10) Eliminate slogans, exhortations, and targets
11) Remove barriers that rob the hourly worker of his right to pride of
workmanship
12) Remove barriers that rob people in management and in engineering
of their right to pride of workmanship (abolishment of the annual or
merit rating, and of management by objective)
13) Institute a vigorous program of education and self-improvement
14) Transformation is everybody’s job.
ISO 9000
- Set of international standards on quality management and quality
assurance, critical to international business
- Series of standards, briefly, require firms to document their quality-
control systems at every step (incoming RM, product design, in-
process monitoring and so forth) to identify areas that are causing
quality problems and correct them
- Require companies to document everything that they do that
affects quality of goods and services
 Inputs - Acceptance sampling – Inspection before/after production
Transformation - Process control – corrective action during production
Outputs - Continuous improvement – Quality built into the process
most progressive

Control process Define, measure, compare to a standard, evaluate, take corrective action,
evaluate corrective action

Total Quality Management A philosophy that involves everyone in an organization in a continual effort
Approach to improve quality and achieve customer satisfaction

Continuous improvement
Involvement of everyone
Customer satisfaction

1) Find out what the customer wants

2) Design a product or service that meets or exceeds customer wants
3) Design processes that facilitates doing the job right the first time
4) Keep track of results
5) Extend these concepts to suppliers

Elements of TQM 1) Continual improvement

2) Competitive benchmarking
3) Employee empowerment
4) Team approach
5) Decisions based on facts
6) Knowledge of tools
7) Supplier quality
8) champion

Continuous Improvement Philosophy that seeks to make never-ending improvements to the process
of converting inputs into outputs
Kaizen = continuous improvement

Quality at the source Philosophy of making each worker responsible for the quality of his or her
work

Obstacles to implementing Lack of the following:

TQM 1) company-wide definition of quality
2) strategic plan for change
3) customer focus
4) real employee empowerment
5) strong motivation
6) time to devote to quality initiatives
7) leadership

Poor inter-organizational communication

View of quality as a “quick fix”
Emphasis on short-term financial results
Internal political and “turf” wars
Basic steps in Problem 1) Define the problem and establish an improvement goal
Solving 2) Collect data
3) Analyze the problem
4) Generate potential solutions
5) Choose a solution
6) Implement the solution
7) Monitor the solution to see if it accomplishes the goal

Process improvement A systematic approach to improving a process

Process mapping
Analyze the process
Redesign the process

Basic Quality Tools Flowcharts

Check sheets
Histograms
Pareto charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts

Poka-Yoke – (idiot proof) seeking to avoid inadvertent errors

Failure Mode Effect Analysis (FMEA) – quantifies the possibilities of failure,
the effect of failure and weighs up the likelihood
Methods for generating Brainstorming
ideas Quality circles - feedback groups that voice problems and suggest
solutions
Interviewing
Benchmarking
1) Identify a critical process that needs improving
2) Identify an organization that excels in this process
3) Contact the organization
4) Analyze the data
5) Improve the critical process
5W2H
Supply Chain Management Active management of supply chain activities and relationships to
maximize customer value and achieve a sustainable competitive
advantage;
The strategic coordination of business functions within a business
organization and throughout its supply chain for the purpose of integrating
supply and demand management

Supply Chain: the sequence of organizations – their facilities, functions,

and activities – that are involved in producing and delivering a product or
service;
Also, value chains.

Facilities used: warehouses, factories, processing centers, distribution

center, retail outlets, offices
 Functions and activities: Forecasting, purchasing, inventory management,
Information management, Quality assurance, Scheduling, production and
delivery, customer service

Importance:
1) To improve operations
2) Increasing levels of outsourcing
3) Increasing transportation costs
4) Competitive pressures
5) Increasing globalization
6) Increasing importance of e-commerce
7) Complexity of supply chains
8) To manage inventories

Benefits of SCM:
Improve inventory turnover rates
Cut costs
Double profits and increased sales
Increased market share
Become a profitable industry leader
Elements of SCM ELEMENT TYPICAL ISSUES
Customers Determining what customers want
Forecastin Predicting quantity and timing of demand
g
Design Incorporating customer wants, manufacturing and time
Processing Controlling quality, scheduling work
Inventory Meeting demand while managing inventory costs
Purchasing Evaluating suppliers and supporting operations
Suppliers Monitoring supplier quality, delivery, and relations
Location Determining location of facilities
Logistics Deciding how to best move and store materials

Operations and Supply 1) Process selection, design, and improvement

Chain Activities 2) Forecasting for decision making
3) Capacity planning for capital investment and resource levels
4) Inventory management for amount and location
5) Planning and control for work scheduling and meeting demand
6) Purchasing, managing supplier relationship
7) Logistics or acquisition and distribution
Supply Chain Issues Strategic Issues:
Design of the supply chain, partnering

Tactical issues:
Policies on inventory, purchasing, production, transportation, and quality

Operating Issues:
Quality control
Production planning and control
 Challenges:
Barriers to integration of organizations
Getting top management on board
Dealing with trade-offs
Small businesses
Variability and uncertainty
Long lead times

Supply Chain Performance Quality, cost, flexibility, velocity, customer service

Drivers
Logistics Refers to the movement of materials and information within a facility and to
incoming and outgoing shipments of goods and materials

Concerned with movement within the facility, incoming and outgoing

shipments, barcoding, EDI, distribution, JIT deliveries
Creating an effective supply 1) Develop strategic objectives and tactics
chain 2) Integrate and coordinate activities in the internal supply chain
3) Coordinate suppliers with customers
4) Coordinate planning and execution
5) Form strategic partnerships
Supply Chain Benefits and
Drawbacks

Inventory Management Objective: To strike a balance between inventory investment and customer
service
Inventory Inventory classifications:
Process stage: RM, WIP, FG

Number and Value: A, B, C

Demand Type: Independent and Dependent

Other: Maintenance, and Repair Operating

Functions:
 1) To decouple various parts of the production process by covering
delays
2) To protect the company against fluctuations in demand
3) To provide a selection for customers
4) To take advantage of quantity discounts
5) To hedge against inflation
6) To permit operations

Problems caused by inventory:

1) Inventory ties up working capital
2) Inventory takes up space
3) Inventory is prone to damage, pilferage, and obsolescence
4) Inventory hides problems
Effective Inventory A system to keep track of inventory
Management A reliable forecast of demand
Knowledge of lead times
Reasonable estimates of holding costs, ordering costs, shortage costs
A classification system
Inventory counting systems Periodic System (periodic counts)
Perpetual Inventory System (tracks in and out)
Two-Bin System (reorder when the first bin is empty
Universal Bar Code (code has info of product)
EOQ Models Only one product is involved
Annual demand requirements known
Demand is even throughout the year
Lead time does not vary
Each order is received in a single delivery
There are no quantity discounts

Economic Production Production done in batches or lots

Quantity Capacity to produce a part exceeds the part’s usage or demand rate
Assumptions of EPQ are similar to EOQ except orders are received
incrementally during production

Assumptions:
Only one item is involved
Annual demand is known
Usage and production rates are constant
Usage occurs continually
Lead time does not vary
No quantity discounts

When to Reorder with EOQ Reorder point – when the quantity on hand of an item drops to this amount,
Ordering the item is reordered

Safety stock – stock that is held in excess of expected demand due to

variable demand rate and/or lead time

Service level – probability that demand will not exceed supply during the
lead time (probability of no stock outs, confidence level)
Inventory Management Too much inventory:
Implications to Operations - Tends to hide problems
strategy - Easier to live with problems than to eliminate them
- Costly to maintain

Wise Strategy:
- Reduce lot sizes
- Reduce safety stock

JIT/Just-in-time Repetitive production system in which processing and movement of

materials and goods occur just as they are needed, usually in small
batches
- Characteristic of lean production systems, operates with very little
“fat”

Goals:
1) Eliminates disruptions
2) Make system flexible by reduced setup and lead times
3) Eliminate waste, especially excess inventory

Benefits:
- Reduced inventory levels
- High quality
- Flexibility
- Reduced lead times
- Reduced need for indirect labor

Elements:
- Smooth flow of work (the ultimate goal)
- Elimination of waste
- Continuous improvement
- Eliminate non-value adding activities

Sources of waste 1) Overproduction

2) Waiting time
3) Unnecessary transportation
4) Processing waste
5) Inefficient work methods
6) Product defects
Big versus Little JIT Big JIT (broad focus):
Vendor relations
Human relations
Technology management
Materials and inventory management

Little JIT (narrow focus):

Scheduling materials
Scheduling services of production

JIT Building Blocks - Product design (standard parts, modular design, highly capable
production systems)

Benefits of Small Lot Sizes
Pull/Push system
JIT II
Elements of JIT
Project Management
Responsibilities of Project
Managers
Ethical Issues
- Process design (small lot sizes, setup time reduction, manufacturing
cells, limited work in process, quality improvement, production
flexibility, little inventory storage)
- Personnel/organizational elements
- Manufacturing planning and control
1) Reduces inventory
2) Less work
3) Less storage space
4) Problems are more apparent
5) Increases product flexibility
6) Easier to balance operations
Pull system: a workstation pulls output from the preceding station as
needed (ex. Kanban – (signal) card or other device that communicates
demand for work or materials from the preceding station; paperless
production system)
Push system: output is pushed to the next station as it is completed
Practice of allowing vendors to manage some aspects of buying their
products or services
Poka-yoke – fail safe tools and methods
Preventive maintenance
Good housekeeping
Set-up time reduction
Cross-trained employees
A pull system
Unique, one-time operations designed to accomplish a specified set of
objectives in a limited time frame.
Key decisions:
1) Deciding which projects to implement
2) Selecting a project manager, a project team
3) Planning and designing the project
4) Managing and controlling project resources
5) Deciding if and when a project should be terminated
Work
Human resources
Communications
Quality
Time
Costs
Temptation to understate costs
Withhold information
Mislead status reports
Falsifying records
Compromising workers’ safety
Approving substandard work
 Project Life Cycle Concept
Management of Feasibility
Planning
Execution
Termination
Risk Occurrence of events that have undesirable consequences
Risks in PM:
1) Delays
2) Increased costs
3) Inability to meet specifications
4) Project termination

Risk Management Process 1) Identify potential risks

2) Analyze and assess risks
3) Work to minimize occurrence of risk
4) Establish contingency plans
PERT and CPM Program Evaluation and Review Technique
Critical Path Method

Graphically displays project activities

Estimates how long the project will take
Indicates most critical activities
Show where delays will not affect project

MANAGERIAL ACCOUNTING

Managerial Accounting Concerned with providing information to managers — the people inside the
organization who direct and control its operations.

In contrast to Financial Accounting (concerned with providing information

to stockholders, creditors, and others who are outside the organization):

Financial Accounting Managerial Accounting

Users External persons Managers who plan and
control
Time Focus Historical Future
Verifiability versus Verifiability Relevance for planning
relevance and controlling
Precision versus Precision Timeliness
timeliness
Subject Focuses on whole Focuses on segments
organization of an organization
GAAP Must follow GAAP Need not follow GAAP
Requirement Mandatory for Not mandatory
external reports

Importance to: