PLANEAMIENTO Y

CONTROL DE
OPERACIONES
INTRODUCCIÓN AL
PLANEAMIENTO Y
CONTROL DE
OPERACIONES
 OUTLINE

 What Is Operations Management?

 Organizing to Produce Goods and Services
 Why Study OM?
 What Operations Managers Do
 OUTLINE - CONTINUED

 The Heritage of Operations Management

 Operations in the Service Sector
 Differences between Goods and Services
 Growth of Services
 Service Pay
 Exciting New Trends in Operations
Management
 OUTLINE - CONTINUED

 The Productivity Challenge

 Productivity Measurement
 Productivity Variables
 Productivity and the Service Sector
 Ethics and Social Responsibility
 WHAT IS OPERATIONS
MANAGEMENT?
PRODUCTION IS THE CREATION OF GOODS AND
SERVICES

Operations management (OM) is the

set of activities that creates value in
the form of goods and services by
transforming inputs into outputs
ORGANIZING TO PRODUCE GOODS
AND SERVICES

 Essential functions:
 Marketing – generates demand
 Production/operations – creates the
product
 Finance/accounting – tracks how well the
organization is doing, pays bills, collects
the money
 ORGANIZATIONAL CHARTS
Commercial Bank

Operations Finance Marketing/Sales

Teller Scheduling Investments Loans
Check Clearing Security Commercial
Collection Real estate Industrial
Transaction Financial
processing Accounting Personal
Facilities Mortgage
design/layout
Maintenance Auditing
Security
 ORGANIZATIONAL CHARTS
Airline

Operations Finance/ Marketing/Sales

Ground support accounting Traffic
equipment Accounting administration
Maintenance Payables Reservations
Ground Operations Receivables Schedules
General Ledger Tariffs (pricing)
Facility (libro mayor) Sales
maintenance Finance
Catering Advertising
Flight Operations Cash control
International
Crew scheduling exchange
Flying
Communications
Dispatching
Management science
 ORGANIZATIONAL CHARTS
Manufacturing

Operations Finance/ Marketing/

Facilities accounting Sales
Construction; maintenance Disbursements/ Sales
Production and inventory control credits promotion
Scheduling; materials control Receivables Advertising
Quality assurance and control Payables Sales
General ledger
Supply chain management Market
Manufacturing Funds Management research
Tooling; fabrication; assembly Money market
Design International
Product development and design exchange
Detailed product specifications Capital requirements
Industrial engineering Stock issue
Efficient use of machines, space, Bond issue
and personnel and recall
Process analysis
Development and installation of
production tools and equipment
 WHY STUDY OM?
 OM is one of three major functions (marketing, finance,
and operations) of any organization

 We want (and need) to know how goods

and services are produced
 We want to understand what operations
managers do
 OM is such a costly part of an organization
 OPTIONS FOR INCREASING
CONTRIBUTION
Finance/
Marketing Accounting OM
Option Option Option

Increase Reduce Reduce

Sales Finance Production
Current Revenue 50% Costs 50% Costs 20%

Sales $100,000 $150,000 $100,000 $100,000

Cost of Goods – 80,000 – 120,000 – 80,000 – 64,000
Gross Margin 20,000 30,000 20,000 36,000
Finance Costs – 6,000 – 6,000 – 3,000 – 6,000
Subtotal 14,000 24,000 17,000 30,000
Taxes at 25% – 3,500 – 6,000 – 4,250 – 7,500
Contribution $ 10,500 $ 18,000 $ 12,750 $ 22,500
 WHAT OPERATIONS
MANAGERS DO
Basic Management Functions
 PLANNING
 ORGANIZING
 STAFFING
 LEADING
 CONTROLLING
 TEN CRITICAL DECISIONS
Ten Decision Areas
 Design of goods and services
 Managing quality
 Process and capacity (PCO Métodos 2)
design
 Location strategy (PCO Métodos 2)
 Layout strategy (PCO Métodos 2)
 Human resources and
job design
 Supply chain
management (PCO)
 Inventory management (PCO)
 Scheduling (PCO)
 Maintenance
 THE CRITICAL DECISIONS
 Design of goods and services
 What good or service should we offer?
 How should we design these products and services?
 Managing quality
 How do we define quality?
 Who is responsible for quality?
 THE CRITICAL DECISIONS
 Process and capacity design
 What process and what capacity will these products require?
 What equipment and technology is necessary for these
processes?
 Location strategy
 Where should we put the facility?
 On what criteria should we base the location decision?
 THE CRITICAL DECISIONS
 Layout strategy
 How should we arrange the facility?
 How large must the facility be to meet our plan?
 Human resources and job design
 How do we provide a reasonable work environment?
 How much can we expect our employees to produce?
 THE CRITICAL DECISIONS
 Supply chain management
 Should we make or buy this component?
 Who are our suppliers and who can integrate into our business
model?
 Inventory, material requirements planning, and JIT
 How much inventory of each item should we have?
 When do we re-order?
 THE CRITICAL DECISIONS
 Intermediate and short–term scheduling
 Are we better off keeping people on the payroll during
slowdowns?
 Which jobs do we perform next?
 Maintenance
 Who is responsible for maintenance?
 When do we do maintenance?
WHERE ARE THE OM JOBS?
WHERE ARE THE OM JOBS?
 Technology/methods
 Facilities/space utilization
 Strategic issues
 Response time
 People/team development
 Customer service
 Quality
 Cost reduction
 Inventory reduction
 Productivity improvement
 THE HERITAGE OF OM

 Division of labor (Adam Smith 1776; Charles

Babbage 1852)
 Standardized parts (Whitney 1800)
 Scientific Management (Taylor 1881)
 Coordinated assembly line (Ford/ Sorenson
1913)
 Gantt charts (Gantt 1916)
 Motion study (Frank and Lillian Gilbreth 1922)
 Quality control (Shewhart 1924; Deming
1950)
 THE HERITAGE OF OM

 Computer (Atanasoff 1938)

 CPM/PERT (DuPont 1957)
 Material requirements planning (Orlicky 1960)
 Computer aided design (CAD 1970)
 Flexible manufacturing system (FMS 1975)
 Baldrige Quality Awards (1980)
 Computer integrated manufacturing (1990)
 Globalization (1992)
 Internet (1995)
CONTRIBUTIONS FROM

 Human factors
 Industrial engineering
 Management science
 Biological science
 Physical sciences
 Information technology
 NEW CHALLENGES IN OM
From To
 Local or national focus  Global focus
 Batch shipments  Just-in-time
 Low bid purchasing
 Supply chain
partnering
 Lengthy product
development  Rapid product
development,
 Standard products alliances
 Mass customization
 Job specialization
 Empowered
employees, teams
 CHARACTERISTICS OF GOODS
 Tangible product
 Consistent product
definition
 Production usually
separate from
consumption
 Can be inventoried
 Low customer
interaction
CHARACTERISTICS OF SERVICE
 Intangible product
 Produced and consumed at
same time
 Often unique
 High customer interaction
 Inconsistent product
definition
 Often knowledge-based
 GOODS VERSUS SERVICES
Attributes of Goods
(Tangible Product)
Can be resold
Can be inventoried
Some aspects of quality
measurable
Selling is distinct from
production
Product is transportable
Site of facility important for cost
Often easy to automate
Revenue generated primarily
from tangible product
Attributes of Services
(Intangible Product)
Reselling unusual
Difficult to inventory
Quality difficult to measure
Selling is part of service
Provider, not product, is
often transportable
Site of facility important for
customer contact
Often difficult to automate
Revenue generated primarily
from the intangible service
 GOODS AND SERVICES
Automobile
Computer
Installed carpeting
Fast-food meal
Restaurant meal/auto repair
Hospital care
Advertising agency/
investment management
Consulting service/
teaching
Counseling
100% 75 50 25 0 25 50 75 100%
| | | | | | | | |

Percent of Product that is a Good Percent of Product that is a Service

MANUFACTURING AND SERVICE
EMPLOYMENT

120 –

100 –
Employment (millions)

Service
80 –

60 –

40 –
Manufacturing
20 –

| | | | | | |
0 – 1950 1970 1990 2010 (est)
1960 1980 2000
 NEW TRENDS IN OM
Past Causes Future
Local or Reliable worldwide Global focus,
national communication and moving
focus transportation networks production
offshore
Batch (large) Short product life cycles Just-in-time
shipments and cost of capital put performance
pressure on reducing
inventory
Low-bid Supply chain competition Supply chain
purchasing requires that suppliers be partners,
engaged in a focus on the collaboration,
end customer alliances,
outsourcing
 NEW TRENDS IN OM
Past Causes Future
Lengthy Shorter life cycles, Rapid product
product Internet, rapid international development,
development communication, computer- alliances,
aided design, and collaborative
international collaboration designs
Standardized Affluence and worldwide Mass
products markets; increasingly customization
flexible production with added
processes emphasis on
quality
Job Changing socioculture Empowered
specialization milieu; increasingly a employees,
knowledge and information teams, and lean
society production
 NEW TRENDS IN OM
Past Causes Future
Low-cost Environmental issues, ISO Environmentally
focus 14000, increasing disposal sensitive
costs production, green
manufacturing,
recycled
materials,
remanufacturing
Ethics not Businesses operate more High ethical
at forefront openly; public and global standards and
review of ethics; opposition social
to child labor, bribery, responsibility
pollution expected
 NEW TRENDS IN OM
 Global focus
 Just-in-time performance
 Supply chain partnering
 Rapid product development
 Mass customization
 Empowered employees
 Environmentally sensitive production
 Ethics
 PRODUCTIVITY CHALLENGE

Productivity is the ratio of outputs (goods and

services) divided by the inputs (resources such as
labor and capital)

The objective is to improve productivity!

Important Note!
Production is a measure of output only
and not a measure of efficiency
 THE ECONOMIC SYSTEM

Inputs Processes Outputs

Labor, The U.S. economic system Goods and

capital, transforms inputs to outputs at services
management about an annual 2.5% increase in
productivity per year. The
productivity increase is the result
of a mix of capital (38% of 2.5%),
labor (10% of 2.5%), and
management (52% of 2.5%).

Feedback loop
 IMPROVING PRODUCTIVITY AT
STARBUCKS
A team of 10 analysts
continually look for ways to
shave time. Some
improvements:
Stop requiring signatures Saved 8 seconds
on credit card purchases per transaction
under $25
Change the size of the ice Saved 14 seconds
scoop per drink
New espresso machines Saved 12 seconds
per shot
 IMPROVING PRODUCTIVITY AT
STARBUCKS
A team of 10 analysts
continually look for ways to
shave time. Some
improvements:
Operations improvements have helped Starbucks
increase yearly revenue per outlet by $200,000 to
Stop requiring signatures
$940,000 in six years. Saved 8 seconds
on credit card purchases per transaction
Productivity has improved by 27%, or about 4.5% per
under $25 year.

Change the size of the ice Saved 14 seconds

scoop per drink
New espresso machines Saved 12 seconds
per shot
 PRODUCTIVITY

Units produced
Productivity =
Input used

 Measure of process improvement

 Represents output relative to input
 Only through productivity increases can
our standard of living improve
 PRODUCTIVITY CALCULATIONS

Labor Productivity
Units produced
Productivity =
Labor-hours used

1,000
= = 4 units/labor-hour
250

One resource input  single-factor productivity

 MULTI-FACTOR PRODUCTIVITY
Output
Productivity =
Labor + Material + Energy +
Capital + Miscellaneous
 Also known as total factor productivity
 Output and inputs are often expressed in
dollars

Multiple resource inputs  multi-factor productivity

 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day

Old labor 8 titles/day

productivity = 32 labor-hrs
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day

Old labor 8 titles/day

productivity = 32 labor-hrs = .25 titles/labor-hr
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old labor 8 titles/day

productivity = 32 labor-hrs = .25 titles/labor-hr

New labor 14 titles/day

productivity = 32 labor-hrs
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old labor 8 titles/day

productivity = 32 labor-hrs = .25 titles/labor-hr

New labor 14 titles/day

productivity = 32 labor-hrs = .4375 titles/labor-hr
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old multifactor 8 titles/day

productivity = $640 + 400
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old multifactor 8 titles/day

productivity = $640 + 400 = .0077 titles/dollar
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old multifactor 8 titles/day

productivity = $640 + 400 = .0077 titles/dollar

New multifactor 14 titles/day

productivity = $640 + 800
 COLLINS TITLE PRODUCTIVITY
Old System:

Staff of 4 works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day
New System:

14 titles/day Overhead = $800/day

Old multifactor 8 titles/day

productivity = $640 + 400 = .0077 titles/dollar

New multifactor 14 titles/day

productivity = $640 + 800 = .0097 titles/dollar
 MEASUREMENT PROBLEMS

 Quality may change while the quantity

of inputs and outputs remains
constant
 External elements may cause an
increase or decrease in productivity
 Precise units of measure may be
lacking
 PRODUCTIVITY VARIABLES

 Labor - contributes
about 10% of the annual
increase
 Capital - contributes
about 38% of the annual
increase
 Management -
contributes about 52%
of the annual increase
KEY VARIABLES FOR IMPROVED
LABOR PRODUCTIVITY

 Basic education appropriate for the labor

force
 Diet of the labor force
 Social overhead that makes labor
available
 Maintaining and enhancing skills in the
midst of rapidly changing technology and
knowledge
 SERVICE PRODUCTIVITY

 Typically labor intensive

 Frequently focused on unique individual
attributes or desires
 Often an intellectual task performed by
professionals
 Often difficult to mechanize
 Often difficult to evaluate for quality
 ETHICS AND SOCIAL
RESPONSIBILITY

Challenges facing
operations managers:

 Developing and producing safe, quality

products
 Maintaining a clean environment
 Providing a safe workplace
 Honoring community commitments