Section 2 Production System Issues

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Basic Management Responsibilities The Organization Money Management Demand Management Design Management Operations Management Slide 1 .

The Operations Function   Core of the Organization Other Functional Areas Marketing (demand) Finance (money) Engineering (design) Human Resources (men) Other? ===> support      Slide 2 .

WalMart) Housing construction Law firms Accounting firms Universities Others Similarities ===> Principles of OM       Slide 3 .The Operations Function   Differs Based upon Industry/Organization High volume retailing (e..g.

The Operations Function  Operation = Transformation Process Process inputs    Management Methods Materials Machines Maintenance Personnel Also: information & energy Transformation (macro/micro views) Outputs (components / finished goods / services)  Slide 4 .

The Operations Function   Measurements Characteristics of outputs Relation of outputs to inputs (productivity) (productivity) Improving Operations Methods Technology Quality Management (not necessarily workers) Capital        Slide 5 .

Transformation Process       Physical: as in manufacturing operations Locational: as in transportation operations Exchange: as in retail operations Physiological: as in health care Psychological: as in entertainment Informational: as in communication Slide 6 .

Production Systems Characteristics a) System discrimination b) Interrelationship among systems c) Stratum formulations d) Specialisation of functions e) Increase of entropy f) Isofinality Slide 7 .

Systems Perspective     Inputs Transformation System Alter Transport Store Inspect Outputs Environment     Slide 8 .

capital. raw materials. and supplies. Slide 9 .Inputs   Inputs include facilities. A less obvious input is knowledge of how to transform the inputs into outputs. labour. equipment.

Four major ways Alter ± physical change Transport .Transformation System   The part of the system that adds value to the inputs.protect Inspect ± better understanding     Slide 10 .relocate Store .

Outputs  Two types of outputs commonly result from a production system Services (physical goods) Products (abstract or nonphysical)   Slide 11 .

Evolution of Operations Management  Craft production  process of handcrafting products or services for individual customers dividing a job into a series of small tasks each performed by a different worker standardization of parts initially as replacement parts. enabled mass production  Division of labour   Interchangeable parts  Slide 12 .

)    Scientific management systematic analysis of work methods Mass production highhigh-volume production of a standardized product for a mass market Lean production adaptation of mass production that prizes quality and flexibility    Slide 13 .Evolution of Operations Management (cont.

The Shingo System: Fail-Safe Design  Shingo¶s argument:  SQC methods do not prevent defects  Defects arise when people make errors  Defects can be prevented by providing workers with feedback on errors PokaPoka-Yoke includes: Checklists Special tooling that prevents workers from making errors    Slide 14 .

Poka Yoke   Kaizen translates into continuous improvement.Kaizen. Goal of poka yoke is to mistake-proof work mistakeactivities in a way that prevents errors from being committed in the first place. Slide 15 .

Examples Spreadsheet templates (with locked formula cells) Jigs Etc.         Slide 16 .FailFail-Safing    AKA Idiot-Proofing IdiotProtects against human variability Also can lead to dumbing-down of workforce dumbingGoal is to Prevent: Leaving out parts/steps Passing errors along Etc.

Service Fail-safing FailPokaPoka-Yokes (A Proactive Approach)  Keeping a mistake from becoming a service defect How can we fail-safe failthe three Ts? Task  Treatment Tangibles Slide 17 .

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