Course Outline

▪ Introduction to Operations/ Production & Operations/

Production Management

▪ Process Strategy

▪ Process Analysis & Improvement

MID END SESSIONAL

▪ Anticipate Customer Demand
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o Forecasting
o Inventory Management

▪ Respond to Customer Demand

o Waiting Line Management / Queuing Theory
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Recommended Books

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Operations: Definition
Process / Operations refers to the production of goods and services, the set of value-added and non-
value
added activities that transform inputs into outputs.
Process “network of activities performed by
Inputs resources” Resources Labor & Capital Outputs

Flow units Goods

(raw material, Services
Resources: Labor &
customers)
Capital
Value Added Activity
▪ Transforms or shapes material or information or people
▪ And it’s done right the first time
▪ And the customer wants it

Non-Value Added Activity – Necessary Waste

▪ No value is created, but cannot be eliminated based on current technology, policy, or
thinking
▪ Examples: project coordination, company mandate, law

Non-Value Added Activity - Pure Waste

▪ Consumes resources, but creates no value in the eyes of the customer
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▪ Examples: idle, rework, excess checkoffs
Four Performance Dimensions
PRODUCTION
Factors
SYSTEM

Cost /
Quantity Quality Tim
Price
o Historical defect rate? Time:
e
Design Capacity Vs Cost to produce
Actual Capacity o Which step(s) contributes oManufacturing Lead Time?
one
to defect rate? o Cycle time?
unit?
o Where do errors occur? oExcessive set-up time? o
o Can we reduce it?
Excessive waiting time? o
Takt time?
Flow:
o Balanced?
o bottleneck?
o are all steps necessary?

Cost
Dealing with Trade-
Offs
Flexibility Delivery

Quality 5
Process Performance Vs System Inhibitors
Three Measures of Process Process “network of activities performed by
Input Outputs
1. Flow time
Performance resources” Resources Labor & Capital
s
2. Flow rate / Throughput Flow units Goods
Services
3. Inventory (WIP) (raw material, Resources: Labor &
customers) Capital

Inventory (I) = Flow Rate (R) * Flow Time BBA Program Large PC Manufacturer
(T)
Flow unit BBA Students Computer
Flow rate 50 Students per year 5,000 units per day
Flow time 4 years 10 days
Inventory 200 Students 50,000 Computers

Three Process/System Inhibitors

1. Waste: The consumption of inputs and resources that do not add value to the customer.
2. Variability: Predictable or unpredictable changes in the demand or the supply process.
3. Inflexibility: The inability of an operation to quickly and cheaply change in response to new
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information.
Operations Management: Definitions
▪ Operations management focuses on how organizations produce goods and services efficiently and effectively. It concerns
the improvement of business operations and the transformation process through which goods and services are
created (Schermerhorn, 2011).
▪ The systematic design, direction, and control of processes that transform inputs into services and products for internal, as well
as external, customers (Krajewski, L., Ritzman, L., & Malhotra, M., 2016).

General Model for Operations

Management

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Operations Function
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▪ Operations

▪ Marketing

▪ Finance and
Accounting

▪ Human Resources

▪ Outside Suppliers
Key Decisions of Operations Managers
▪ What
o What resources are needed, and in what amounts?

▪ When
o When will each resource be needed?
o When should the work be scheduled?
o When should materials and other supplies be
ordered?
▪ Where
o Where will the work be done?

▪ Who
o Who will do the work?

▪ How
o How will the product or service be designed?
o How will the work be done?
o How will resources be allocated? 9
Evolution of Operations Management
▪ Craft Production
• process of handcrafting products or services for individual customers

▪ Division of Labor
• dividing a job into a series of small tasks each performed by a different
worker

▪ Interchangeable Parts
• standardization of parts initially as replacement parts; enabled mass
production

▪ Scientific Management
• systematic analysis of work methods

▪ Mass Production
• high-volume production of a standardized product for a mass market

▪ Lean Production 10
• adaptation of mass production that prizes quality and flexibility
Professional Organizations

APICS: http://www.apics.org
/

INFORMS: https://www.informs.org
/

POMS: https://www.poms.org
/

Institute of Industrial and Systems Engineers: https://www.iise.org

/

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Q&A

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