about the lecturer udr. qing lu (henry) ugrew up in shanghai, china ulived in singapore from 1994 to...
TRANSCRIPT
About the Lecturer Dr. Qing Lu (Henry)
Grew up in Shanghai, China Lived in Singapore from 1994 to 2014 Came to IEU last September
• Contact informationo Office: C-808, Tel: 448-8295o e-mail: [email protected] Course materials will be posted online every week
• Warning ahead• No plagiarism (from other students or Internet)• Keep classroom order
• Two-way communication vital, let me know• whether you understand or not• anything concerned
CHAPTER 1 Strategy & Competition
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Manufacturing processes are combined to form a manufacturing system
Manufacturing system takes inputs and produces products for the customer
Production system includes people, money, equipment, materials and supplies, markets, management and the manufacturing system
Football ~ manufacturing
Anology of football to manufacturing and production system terminology
Footbal Manufacturing
Football players Manufacturing processes or machine tools
Operations(run, pass, block, catch, etc.)
Operations(drilling, boring, turning, etc.)
Offensive and defensive plays Manufacturing systems(job shop, flow shop, project shop, cont. processes, cellular)
Designing the plays or formations Design or layout of manufacturing system
Athletic department (coach, recruit, maintain field, sell tickets, print programs, training)
Production system (design, personnel, accounting, sales, marketing, quality control, maintenance)
Product type vs. Manufacturing SystemLow-volume custom-differentiated products
High-volume differentiated products
Project shop
Job shop
Flow shop
Dedicated flow shop
Continuous process
AerospaceShipbuilding*
Industrial machinery*Apparel*
Machine tools*
Drugs*Motorcycles*
Speciality chemicalsElectrical & electronic*
AUtomobile*Tire&rubber
Steel producsMajor chemicals
PaperContainers
Oil SteelForest
Products
Type of industry by product
Typ
e of
man
ufa
ctur
ing
syst
em
Topic Areas in Operations Analysis Forecasting Aggregate Planning Inventory Control: Deterministic Environments Inventory Control: Stochastic Environments Supply Chain Management Production Control Systems: MRP and JIT Operations Scheduling Project Scheduling Facilities Planning Quality and Assurance Maintenance and Reliability
1-10
Time Horizons for Strategic Decisions1. Long Term Decisions
Locating and Sizing New Facilities Finding New Markets for Products Mission Statement: meeting quality objectives
2. Intermediate Term Decisions Forecasting Product Demand Determining Manpower Needs Setting Channels of Distribution Equipment Purchases and Maintenance
3. Short Term Decisions Purchasing Shift Scheduling Inventory Control
1-12
The Elements of Strategy
Time Horizon Short Term Intermediate Long Term
Evaluation Cost Quality Profitability Customer satisfaction
Focus Process Technology Market Issues Volume Quality Tasks
Consistency Professionalism Proliferation Changes in the task Explicit goals
1-13
History of POM Major Thrust of the Industrial Revolution 1850-
1890. Factories tended to be small. Boss had total control.
Little regard for workers safety or workers rights.
Production Manager Position. 1890-1920. Frederick Taylor champions the idea of “scientific
management”.
As complexity grows specializations take hold. Inventory Control Manager Purchasing Manager Scheduling Supervisor Quality Control Manager etc.
Start to move from specialization to integration
1-15
Global Competition
Global competition is heating up to an unprecedented degree. It appears that several factors favor the success of some industries in some countries: For example:
Germany: printing presses, luxury cars, chemicals Switzerland: pharmaceuticals, chocolate Sweden: heavy trucks, mining equipment United States: personal computers, software,
entertainment Japan: automobiles, consumer electronics
1-16
How Do Firms Differentiate Themselves from Competitors? Low Cost Leaders: Some examples include
WalMart and Costco in Retailing Korean automakers (Hyundai, Kia, etc.) Personal computers, Chinese high-tech firms
High Quality (and price) Leaders. Ex: Mercedes Benz automobiles Rolex Watches (some firms do both: Chevrolet and Cadillac)
1-17
Along What Other Dimensions Do Firms Compete?
Delivery Speed, Delivery Reliability Federal Express, United Parcel Service
Flexibility Solectron: provides manufacturing services to
many different companies.
Service Nordstrom bases its reputation on providing a
high quality of service to customers
1-18
Break-even Curves for the Make or Buy Problem
Cost to Buy = c1x
Cost to make=K+c2x
K
Break-even quantity
1-20
Capacity Strategy
Fundamental issues: Amount. When adding capacity, what is the optimal
amount to add? Too little means that more capacity will have to be added
shortly afterwards.
Too much means that capital will be wasted.
Timing. What is the optimal time between adding new capacity?
Type. Level of flexibility, automation, layout, process, level of customization, outsourcing, etc.
1-21
Three Approaches to Capacity Strategy
Policy A: Try not to run short. Here capacity must lead demand, so on average there will be excess capacity.
Policy B: Build to forecast. Capacity additions should be timed so that the firm has excess capacity half the time and is short half the time.
Policy C: Maximize capacity utilization. Capacity additions lag demand, so that average demand is never met.
1-22
Determinants of Capacity Strategy
Highly competitive industries (commodities, large number of suppliers, limited functional difference in products, time sensitive customers) – here shortages are very costly. Use Type A Policy.
Monopolistic environment where manufacturer has power over the industry: Use Type C Policy. (Intel, Lockheed/Martin).
Products that obsolete quickly, such as computer products. Want type C policy, but in competitive industry, such as computers, you will be gone if you cannot meet customer demand. Need best of both worlds: Dell Computer.
1-24
Textbook
2
Nahmias, S. 2007. Production and Operations Analysis. McGraw-Hill/Irwin, 6th (Sixth) Edition
Course Objectives and Overview
• Equip the students on basic modelling skills solving simple quantitative problems
• Four sections in this course Forecasting (ch2) Aggregate planning (Ch3) Inventory management (Ch4 &5) Scheduling and facility layout (Ch8 &
10)
Course Evaluation• 10% attendance
– Attend lectures as many as you can• 10% homework
– Submit homework on time and understand them• 20% in-class quizzes
– Understand lessons and review homework before the quiz• 30% mid-exam at the middle of the course
– Get familiar with the context during the lesson. Ask questions if you don’t understand.
– It is too late for a student to contact lecturer after the exam!
• 30% final exam at the end of the course– The last chance for you to catch upo catch up