managing operation & improving quality - dadang iskandar · 12/11/2015 · customer focus and...

Managing operation & improving quality

The Nature of Operations Management (OM)

The development and administration of the activities involved in transforming resources into goods and services

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

Key Operations Management Terms

Manufacturing

The activities and processes used in making tangible products; also called production

Operations

The activities and processes used in making both tangible and intangible products


The Transformation Process


Inputs, Outputs, and Transformation Processes in the Manufacture of Oak

Furniture


Operations Management in Service Businesses

Service providers use human and mechanical processes to provide products that are intangible

The transformation process requires inputs such as employees, equipment and supplies

Outputs provide a benefit from a performance, event or type of involvement with the service provider

Approximately 80% of the U.S. economy is based on the service industry


Different Types of Transformation Processes

Nature and consumption of output

Uniformity of inputs

Uniformity of outputs

Labor required

Measurement of productivity


The Steps in Planning and Designing Operations Systems (1/2)

1. Planning the product

2. Designing the operations process

a. Standardization

b. Modular design

c. Customization

3. Planning capacity Did You Know?

Hershey’s has the production capacity to make 33

million Hershey’s kisses per day or more than 12

billion per year.


The Steps in Planning and Designing Operations Systems (2/2)

4. Planning Facilities

Facility Location

Facility layout

Fixed-Position Layout (Project Organization)

Process Layout (intermittent organizations)

Product Layout (continuous manufacturing organization)


Facility Layouts

Fixed-Position Layout--Project organization All resources needed for a product are brought to

a central location

Process Layout--Intermittent organization Layout is organized into departments that group

related processes

Product Layout--Continuous manufacturing organization Production is broken down into relatively simple

tasks assigned to workers positioned along a line


Technology

CAD (computer-assisted design)

CAM (computer-assisted manufacturing)

FMS (Flexible Manufacturing System)

CIM (computer-integrated manufacturing)

Source: Robotic Industries Association Website, “Robotics Industry Posts Second Best Year Ever,” from

http://robotics.org/public/articlesdetails.cfm?id=336 (accessed July 18, 2001).

Did You Know?

Robotic Industries Association estimates

100,000 robots work in US factories, making

the US the world’s 2nd largest user of robots.

Managing the Supply Chain

Purchasing Management

Inventory Control Management

Routing and Scheduling

Distribution Management


Purchasing

Procurement

Buying the right items

Obtaining desired quality

Buying the right quantity

Paying the lowest price

Obtaining inventory at the right time


Managing Inventory

Three basic types of inventory:

Finished-goods inventory

Work-in-process inventory

Raw materials inventory


Inventory Control Process

Determines how many supplies and goods are needed, and keeps track of:

Quantities on hand

Where each item is

Who is responsible for it


Did You Know?

Scholastic, Inc., publisher of Harry Potter books

used JIT to deliver 100,000 copies of one book to

stores across the US just minutes before midnight on

July 8, the book’s official release date.

Inventory Management Approaches

Economic order quantity model (EOQ) Identifies the optimum number of items to order

Just in time inventory management (JIT) Uses smaller quantities of materials that arrive

“just in time”

Material-requirements planning (MRP) Schedules the precise quantity of materials

needed to make the product

Routing and Scheduling Routing

The sequence of operations through which a product must pass

Scheduling The assignment of required tasks to departments

or specific machines, workers, or teams GANT Chart

Production schedule diagramming the steps in a project and specifying the time required for each

PERT Chart (Program Evaluation and Review Technique) Production schedule specifying the sequence and critical

path for performing the steps in a project


Gantt Chart

Hypothetical PERT Diagram for Making a McDonald’s Big Mac


Managing Quality

Quality Control

The process an organization uses to maintain its established quality standards

Malcolm Baldrige National Quality Award (MBNQA)

Total Quality Management (TQM)

Statistical Process Control

ISO 9000 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

Types and Percentages of Air Travel Complaints in 2003

Source: Office of Aviation

Enforcement and Proceedings,

Air Travel Consumer Report,

February 2004, p. 39, available at

http://airconsumer.ost.dot.

gov/reports/2004/0402atcr.pdf.

Malcolm Baldrige Quality Award

The Baldrige criteria are: 1. Leadership

2. Information and analysis

3. Strategic planning

4. Human resource development and management

5. Process management

6. Business results

7. Customer focus and satisfaction

Total Quality Management (TQM)

To regain a competitive edge, a number of firms have adopted a total quality management approach

Uniform commitment to quality in all areas of the organization will promote a culture that meets customers’ perceptions of quality


Statistical Process Control

A system in which management collects and analyzes information about the production process to pinpoint quality problems in the production system


Establishing Standards—ISO 9000

Designed to ensure consistent product quality under many conditions

Provides a framework for documenting how a certified business keeps records, trains employees, tests products, and fixes defects

1. Inspection

2. Sampling


Inspection

Purchased items and finished items

To determine what the quality level is

Work-in-process

To find defects before the product is completed so that necessary corrections can be made


Did You Know?

Quality Pays! The annual median income

for a quality assurance/control manager is

$65,536.

Sampling

Whether to inspect 100 percent of the output or only part of it is related to

The cost of the inspection process

The destructiveness of the inspection process

The potential cost of product flaws in terms of human lives and safety


Key Performance Indicators

Q Quality

C Cost

D Delivery

S Service

S Speed

C Community

According to each perspective of the Balanced Scorecard, a number of KPIs can be used such as:

1. Financial

a. Cash Flow b. ROI c. Financial Result d. Returned on Capital employed e. Return on Equity

2. Customer a. Delivery Performance to Customer - by Date b. Quality Performance to Customer - by Quality c. Customer Satisfaction Rate d. Customer retention


http://en.wikipedia.org/wiki/Key_performance_indicators

3. Internal Business Processes a. Number of Activities

b. Opportunity Success Rate

c. Accident Ratios

d. Overall Equipment Effectiveness

4. Learning & Growth a. Investment Rate

b. Illness Rate

c. Internal Promotions %

d. Employee Turnover

e. Gender Ratios


managing operation & improving quality - dadang iskandar · 12/11/2015 · customer focus and...

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