operations management b2b

7/30/2019 Operations Management b2b

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OPERATIONSMANAGEMENT

BACK 2 BASICS


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What is Operation Management ?

Operations Management is the function ofmanaging the operating core of an

organization; the activities associated withcreation, production, distribution anddelivery of the organization's goods and

services.


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ost

OPERATIONs PERFORMANCEOBJECTIVE

INVENTORY MANAGEMENT

Just in time abc analysis eoq, epq vendor managed inventory

LOGISTICS MANAGEMENT 3pl/4pl logistics

SUPPLY CHAIN MANAGEMENT PROJECT MANAGEMENT

scheduling

loading assignment

TOTAL QUALITY MANAGEMENT six sigma zero defect customer orientation

STATISTICAL QUALITY CONTROL STATISTICAL PROCESS CONTROL COLLABORATION

FORECASTING AGGREGATE PLANNING FACILITY LAYOUT LEAN MANUFACTURING TOTAL PRODUCTIVE MAINTENANCE POKA YOKEExcelling at one or more objectives can

Enable an organization to pursue abusiness Strategy on a corresponding

competitive factor


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MARKETING VS. OPERATIONS

Marketing is identification and creation of customer demand

- Mismatch in Demand & Supply

- Production Inefficiencies

- Unsatisfied Customers

- Better Operational Performance- Competitive Advantage- Efficient Supply Chain

Conflictsynch


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TOTAL QUALITY MANAGEMENTAN INTEGRATED EFFORT DESIGNED TO IMPROVE QUALITY

PERFORMANCE AT EVERY LEVEL OF ORGANIZATION

HOW WE DEFINE QUALITY ???

Conformance to specification

Fitness for use

Value for price paid

Support services

Psychological criteria

Manufacturing- Conformance to specification, performance, reliability,serviceability, durability, features.Service Consistency, Responsiveness, friendliness, timeliness,promptness, atmosphere


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COST OF QUALITY

- PREVENTION COST- Cost of preparing and implementing a quality plan

- APPRAISAL COST- Cost of testing, evaluating and inspecting quality

- INTERNAL FAILURE COST- Cost of rework, scrap and material losses

- EXTERNAL FAILURE COST- Costs of failure at customer site like returns,repairs, and recalls.

Time line showing differences between old and new concepts of Quality


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Quality gurus

WALTER A SHEWART - Contributed to understanding of process variability

- Developed concept of statistical control charts

W. EDWARDS DEMING- Stressed managements responsibility for quality.

- Developed 14 points to guide companies in quality improvement

Joseph M. Juran - Define quality as Fitness for use

- Developed concept of quality

Philip B. Crosby - Coined phrase quality is free

- Introduced concept of Zero Defects

kaoru Ishikawa - Developed cause-and-effect diagrams.

- Identified concept of internal consumers

Genichi Taguchi - Focused on product design quality

- Developed Taguchi Loss Function

QUALITY GURUs

Walter A.

W. Edwards

Joseph M.

Armand v.


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Quality gurus

WALTER A SHEWART - Contributed to understanding of process variability- Developed concept of statistical control charts

W. EDWARDS DEMING- Stressed managements responsibility for quality.

- Developed 14 points to guide companies in quality improvement

Joseph M. Juran - Define quality as Fitness for use

- Developed concept of quality

Philip B. Crosby - Coined phrase quality is free

- Introduced concept of Zero Defects

kaoru Ishikawa - Developed cause-and-effect diagrams.

- Identified concept of internal consumers

Genichi Taguchi - Focused on product design quality

- Developed Taguchi Loss Function

QUALITY GURUs

Philip B.

Kaoru

Genichi


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Demings 14 Points

- Create constancy of purpose for improvement of product and service

-Adopt a new philosophy- Change into learning organization

- Cease dependence on mass inspection

-

End awarding business on price- Aim at minimum total cost and move to singlesuppliers

- Improve the system of production and service constantly

-Institute training

- Institute leadership- Result in better job and learning by objective methods

- Drive out fear- To assure better Quality and Productivity


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Demings 14 Points

- Break down barriers between departments

- Eliminate slogans, exhortations, and numerical targets for the workforce

- Eliminate numerical quotas or work standards- Quota consider onlynumbers, not quality or methods

- Remove barriers that prevent workers from taking pride in theirworkmanship

-Institute a vigorous program of education

- Take action to accomplish the transformation- Requires Top Managementteam with Plan of Action


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TQM-Principles

- Produce quality work the first time

- Focus on the customer- Product Design

- Empowerment of Employees

- Improve continuously- P-D-S-A Cycle & Benchmarking

- Encourage mutual respect and teamwork

- Process Management- Quality Built in Process

- Managing Suppliers Quality

Basic idea of TQM:

-Customer Determines Quality

- Commitment toward Sustained Continuous Improvement

- Prevention not Detection

- Effective Quality Metrics

- Leadership and support from Top Management


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Quality control tools

Cause-and-Effect Diagram

Flowchart

Checklist

Control Charts

Scatter Diagram

Pareto Chart

Histogram


13/23QUALITY TOOLS


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Statistical Quality Control

tools to evaluate Organizational quality3 categories:-

- Descriptive Statistics

- Statistical Process Control- Acceptance Sampling

CAUSES OF VARIATION

- Random Causes

- Assignable Causes


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Types of control charts:-

- Control charts for Variables

X Chart- Central Tendency of process

R Chart- Dispersion or Variation in the Process

- Control charts for Attributes

P- Chart- For proportion of Defects

NP- Chart- For Number of defects

C- Chart- For Percentage Defectives

Process Capability- CpSpecification Width/ Process width

= (USL- LSL)/6Cp = 1 Cp < 1Cp > 1

Process Variability Just Process Variability Process Variability

Meets Specification More than the Tighter than Specification

Specification

Statistical Process Control


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Six sigma

-

Coined by Motorola Inc. in 1980s- 3.4 defects per million

- marketing ensures that product characteristics are exactly what customers want.

- Operations ensures that exact product characteristics can be achieved throughproduct design, the manufacturing process, and the materials used.

- Five step process:- DMAIC

DEFINE: identify the problem and use numerical definition

MEASURE: Benchmark Capability of current process

ANALYZE: analyze the result & verify cause-and-effect relationship

IMPROVE: implement changes to do things better, cheaper and faster

CONTROL: ensure that any deviations from target are corrected before they result indefects


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Quality function deployment (QFD)- Customers talk in everyday language

-QFD customers everyday language into specific technicalrequirements.

- relationships among the variables involved in the design of a product, such as technical

versus customer requirements.

House of quality (hoq) CONSISTS OF:-

- customer requirements

- competitive evaluation

- product characteristics

- relationship matrix

- trade-off matrix

- setting targets


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HOUSE OF

QUALITY


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Balanced scorecard

A tool for performance evaluation Incorporating both

financial and non-financial parameters

Traditional financial reports look backward

Reflect only the past: spending incurred and revenues earned

Do not measure creation or destruction of future economic value

It improves financial performance by better resource allocation and investment trade-offs

It directs the Physical, Human and Finance resources to plans and policies to get maximum output

Continuous Communication to Empower the Workforce

Aligning Personal Goals, Incentives, and Competencies With the Strategy

Aligning Resources, Budgets and Initiatives With the Strategy

A Feedback Process That Encourages Learning and Experience Sharing


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BSC - Translating Vision and Strategy:Four Perspectives

VISION ANDSTRATEGY

Objectives

Measures

Targets Initiatives

FINANCIA

LTo succeedfinancially,how shouldwe appearto ourshareholders?

Objectives

Measures

Targets Initiatives

LEARNING AND GROWTHTo achieveour vision,how will wesustain ourability tochange andimprove?

Objectives

Measures

Targets Initiatives

CUSTOMERTo achieveour vision,how shouldwe appearto ourcustomers?

Objectives

Measures

Targets Initiatives

INTERNAL BUSINESS PROCESSTo satisfyourshareholders andcustomers,whatbusinessprocessesmust weexcel at?


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Why Balanced Scorecard?

To Implement Business Strategy

Less than 10% of strategies

effectively formulated are

effectively executedFortune

Business Strategy is now the

single most important issue

and will remain so for the next

five years BusinessWeek


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Four Barriers to Strategic Implementation

Only 5% of the work forceunderstands the strategy

60% of organizations dontlink budgets to strategy

Only 25% of managershave incentives linked to

strategy

85% of executive teamsspend less than one hour

per month discussingstrategy

9 of 10companies

fail to

executestrategy

The People Barrier

The Vision Barrier

The ManagementBarrier

The Resource Barrier


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THANK YOU

operations management b2b

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