lm733-production operations management by: osman bin saif lecture 4

LM733-PRODUCTION OPERATIONS MANAGEMENT

By: OSMAN BIN SAIF

LECTURE 4

Summary of last Session

• The Global Environment and Operations Strategy– Growth of World Trade– Reasons to Globalize– Improve the supply chain– Attract and Retain Global Talent– Cultural and Ethical Issues– Developing Mission and Strategies– Strategic for Competitive Advantage– Global Operation Strategy Options

Agenda for this Session

• Case Study– Hard Rock Cafe• Projects Why?• Characteristics and Activities• Work Break down structure• Project Scheduling techniques• Cost time trade offs• Project Control reports

Operation Management at Hard Rock Café

Case Study: Hard Rock Cafe

Operations Managers

•Operations Managers are the one who carry the task of providing the well-being of the world wide society by producing many products.•These products can take any kind of forms.

The first Hard Rock Cafe

• Hard Rock cafe in the old days was a cafe and a bar but nowadays it became a famous restaurant.

Hard Rock Cafe

•Hard rock Cafe established in London in 1971, it’s one of the oldest and successful cafe.•Eric Clapton a regular costumer marked his favorite bar stool by hanging his guitar in the London cafe.

Reputation

• Nowadays Hard Rock Café can be compared with whirlpool, DreamWorks, Disney world and universal studio.

• There are 129 restaurants in more than 40 countries and new restaurant opining each year and they served over 35 millions guest world wide every year.

• Hard rock Café in Orlando Florida served 3500 meal each day with more than 1500 people.

Operations managers duties in hard rock

•Operation managers in hard rock Cafe are considered to serve excellent food, attractiveness in the lay out. On the other hand they must be sure that the staff contribute to the efficient movement of people and materials to insure that proper portion are served.•Hard rock create value in the form of good food and entertainment.

Operations managers duties in hard rock

•Operation managers in Hard rock Cafe from Universal Studio in Orlando there work goes into designing, testing and costing meals then evaluate the quality of the meals, well trained cooks, excellent staff and costumers satisfaction.

Conclusion

• Managers who successfully design and develop goods and services throughout the world understand operation the best.

• Not only operation managers can work in a restaurant they can also work in any place.

• Production is the creation of goods and services.• Operations management is the set of activities

that create value in the form of goods and services by transforming inputs into outputs.

10 Decisions of operations management

1. Design of Goods and Services• Hard Rock first built its business on rock service

memorabilia utilizing the publicity and public recognition of Eric Clapton when he hung his guitar above his favorite bar stool. Since then Hard Rock focused on building their service based empire with a focus on food and retail.

• In order to keep up with a changing market, Hark Rock continuously updates its menu and music selections. It also has branched out to take advantages of other opportunities by expanding into the hotel, casino and concert arenas

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10 Decisions of operations management (Contd.)

2. Managing Quality• Tough quality controls are in place for both

the food’s quality and service provided to the customer.

• Customers are encouraged to fill out surveys after each visit. The surveys are based on a one to seven scale with seven being the best score. Anything given less than a seven score is seen to be as a failure by the staff. This process lets the customer define quality.

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3. Process and Capacity Design• The production process is defined from

raw food receipt to plating to ensure product efficiency as well as a quality meal.

• This minimizes customer wait time and allows Hard Rock to serve more people in a day.

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4. Location strategy• About 75% of Hard Rock’s employees

are people in the United States therefore a multi-domestic strategy works well for its Orlando headquarters.

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5. Layout strategy• The layout of the restaurant contributes to

the efficient movement of people and material.6. Human resources and job design• When Hard Rock hires employees, it seeks

out the best people it can recruit and train. They seek out not only people that are passionate about music but have engaging personalities as well.

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7. Supply-chain management• Required products are analyzed for cost

and quality of ingredients. Only ingredients from qualified suppliers are used.

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8. Inventory, MRP, JIT• Inventory is based on demand. Hard Rock

serves over 3,500 meals a day and music memorabilia makes up 48% of profits.

9. Scheduling• Hard Rock employees are scheduled to 15

minute intervals. To allows flexibility in scheduling to meet peak seasonal and dialing demand changes and increases the productivity of its scheduled staff.

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Project Management

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Why a separate topic ?

¨ If you look back to the product-process matrix, there is a focus on volume - as volume increases, we become more standardized and efficient - as volume decreases, we have more customization

¨ Project-based work is becoming increasingly prevalent for market-driven reasons - Growing project complexity - Collapsing product/service life cycles

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Examples of Projects

¨ Building construction

¨ Software development

¨ Staging a play

• Project management is a methodical approach to planning and guiding projectprocesses from start to finish. According to theProject Management Institute, the processes are guided through five stages: initiation, planning, executing, controlling, and closing.

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Characteristics of Projects

• Single unit• Relatively low frequency• Defined starting points and ending points• Defined outcomes / goals• Complex interrelated tasks, often

transcending functional boundaries• Require special management tools

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Project Management Activities

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Planning Objectives Resources Work break-

down structure Organization

Scheduling Project

activities Start & end

times Network

Controlling Monitor, compare,

revise, action

© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Project Planning, Scheduling & Controlling

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WBS – Work Breakdown Structure

Project Major tasks in the project

Subtasks in the major tasks Activities (or work packages) to be completed

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A statement of all work that has to be completed. A list of all activities or tasks that constitute the project.

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¨ Identifying precedence relationships ¨ Sequencing activities¨ Determining activity times & costs¨ Estimating material & worker

requirements¨ Determining critical activities

© 1995 Corel Corp.

J F MAMJ J

MonthActivity

Design

Build

Test

Project Scheduling

Project Management Techniques

• Gantt chart• Critical Path Method (CPM)• Program Evaluation & Review

Technique (PERT)

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© 1984-1994 T/Maker Co.

Gantt Chart

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J F M A M J J

Time PeriodActivity

Design

Build

Test

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¨ Relationship between activities ¨ Project duration¨ Critical path¨ Slack for non – critical activities¨ Crashing (cost / time trade-offs) ¨ Resource usage

PERT / CPMNetwork planning methods that generate:

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St. Paul’s Hospital

ImmediateActivity Description Predecessor(s)

A Select administrative and medical staff.B Select site and do site survey.C Select equipment.D Prepare final construction plans and layout.E Bring utilities to the site.F Interview applicants and fill positions in nursing,

support staff, maintenance, and security.G Purchase and take delivery of equipment.H Construct the hospital.I Develop an information system.J Install the equipment.K Train nurses and support staff.

——ABB

ACDAE,G,HF,I,J

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——ABB

ACDAE,G,HF,I,J

AON Network

FinishStart

A

B

C

D

E

F

G

H

I

J

K

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——ABB

ACDAE,G,HF,I,J

Completion Time

FinishStart

K9

I15

F10

C10

D10

E24

G35

H40

J4

A12

B9

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——ABB

ACDAE,G,HF,I,J

Completion Time

FinishStart

K9

I15

F10

C10

D10

E24

G35

H40

J4

A12

B9

Path Expected Time (wks)

A-I-K 36A-F-K 31A-C-G-J-K 70B-D-H-J-K 72B-E-J-K 46

CriticalPath

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Critical Path ¨ The longest path in the network ¨ Defines the shortest time project can be completed¨ Critical path activity delay project delay

Completion Time for Noncritical Activities

• Variability of times for activities on non-critical paths must be considered when determining the probability of finishing in a specified time.

• Variation in non-critical activity may cause change in critical path.

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Cost / Time Trade-offs

Most activities can be done faster if you pay more money

¨ Work overtime / hire more people / rent extra equipment / incentive contracts

¨ PERT / CPM have the ability to crash a schedule – to shorten activity time in a network to reduce project completion time.

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Cost / Time Relationship

8000 —

7000 —

6000 —

5000 —

4000 —

3000 —

0 —

Dir

ect

cost

(d

oll

ars)

Crash cost

Normal cost

| | | | | |5 6 7 8 9 10 11

Crash time

Normal time

Activity B

Project Control Reports• Performance vs. schedule• Expected time to project completion• Cost vs. budget• Detailed cost breakdowns for each task

and organization• Expected total project cost• Resource reports• Corrective action / contingency reports

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Summary• Project management requires special tools

PERT / CPM – Network planning methods that generate relationship between activities, project duration, critical path, slack for non-critical activities, crashing (cost / time trade-offs), and resource usage

• Project-based work is becoming increasingly prevalent for market-driven reasons - Growing project complexity - Collapsing product/service life cycles

• People with these skills are in demand• We have only scratched the surface of the topic– if

you are interested, take the Project Management course.

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Summary for this Session

• Case study Hard Rock Cafe• Projects Why?• Characteristics and Activities• Work Break down structure• Project Scheduling techniques• Cost time trade offs• Project Control reports

THANK YOU

lm733-production operations management by: osman bin saif lecture 4

Documents

hard rock cafehard rock

hard rock operation

serviceshard rock

hard rock cafcase study

rock service memorabilia

operations managers

london cafe

successful cafe