production operation management dr. winfred s william xavier institute of management
TRANSCRIPT
Production Operation Management
Dr. Winfred S William
Xavier Institute of Management
SESSION-2&3
Goods and
services
Goods and
services
The operation’s competitive
role and position
INPUTOUTPUT
Planning and
control
ImprovementDesign
Operations strategy
Input transforme
d resources
Materials Informatio
n Customers
Facilities Staff
Input transforming
resources
The operation’s strategic objectives
Environment
Environment
A general model of operations management
Volume
Variety
Variation in demand
Customer contact
High
High
High
High
Low
Low
Low
Low
High repeatability Specialization Systemization Capital intensive Low unit costs
Flexible Complex Match customer needs High unit cost
Changing capacity Anticipation Flexibility In touch with demand High unit cost
Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit cost
Time lag between production and consumption Standardized Low contact skills High staff utilization Centralization Low unit costs
Stable Routine Predictable High utilization Low unit costs
Well defined Routine Standardized Regular Low unit costs
Low repetition Each staff member performs more of job Less systemization High unit costs
A typology of operations
Low
Var
iety
Hig
h
Flow is intermittent
Flow becomes
continuous
VolumeLow High
Reg
ular
flo
w m
ore
feas
ible
Regular flow more important
Fixed-position layout
Process layout
Cell layout
Product layout
The volume-variety process position of an operation influences its layout and in turn the flow of transformed resources
Fixed position
Process
Cell
Product
Use fixed
position
Use process
Use cell
Use product
(a) (b)
CostsCosts
Volume
Fixed position
Process
Cell
Product
Volume
Use product
Use cell or product
Use process or cell or product
Use process or cellUse process
Use fixed position or process
Use fixed position
? ? ? ?
Operations Strategy
Example
Strategy ProcessCustomer Needs
Corporate Strategy
Operations Strategy
Decisions on Processes and Infrastructure
More Product
Increase Org. Size
Increase Production Capacity
Build New Factory
Operations Strategy Framework
Customer Needs
New : Oldproduct : product
Competitivedimensions & reqs.
Quality, Dependability,Speed, Flexibility, and Price
Operations & Supplier capabilities
Technology PeopleSystems R&D CIM JIT TQM Distribution
Support Platforms
Financial management Human resource management Information management
Enterprise capabilities
.
Differentiation(better)
Cost Leadership(cheaper)
Quick Response(faster)
Quality
Product
Process
Location
Layout
Human resource
Supply chain
Inventory
Scheduling
Maintenance
Operations Examples of Specific Competitive
Decisions Success Strategy Used Advantage
FLEXIBILITY:Sony’s constant innovation of new products……................................................DesignCompaq Computer’s ability to follow the PC market………………………………………………………………Volume
Southwest Airlines no-frills service……………..LOW PRICE DELIVERY:
Pizza Hut’s five minute guarantee at lunchtime…….Speed Federal Express’s “absolutely, positively on time”…………………………………………..Dependability
QUALITY:
Motorola automotive products ignition systems…………………………………………………………..ConformationMotorola pagers……………………………………………….Performance
IBM after-sale service on main frame computers………………………………………….AFTER-SALE SERVICE
Fidelity Security’s broad line of mutual funds………………………………………………..BROAD PRODUCT LINE
OPERATION MANAGEMENT’S CONTRIBUTION TO STRATEGY
Introduction O
M s
trate
gy/I
ssu
es
Com
pan
y
str
ate
gy/I
ssu
es
Internet
Color copiersCD-ROM
Cellular phonesMutual funds
Fax machines
Drive-thru restaurants
Color monitors
Text books3 ½”Floppy disks
5 ¼”Floppy disks
Growth Maturity Decline
Best period to increase market share
R&D are critical
Practice to change priceor quality image
Marketing critical
Strengthen niche
Poor time to increaseMarket share or changeImage, price, or quality
Cost control critical
Product design and development critical
Frequent product and process design changes
Overcapacity
Short production runs
High-skilled labor
High production cost
Limited number of models
Utmost attention to quality
Quick elimination ofdefects in design
Forecasting critical
Product and processreliability
Competitive product improvements andoptions
Increase capacity
Shift toward productoriented
Enhance distribution
Standardization
Less rapid product Changes-more minor annual model changes
Optimum capacity
Increasing stability ofManufacturing process
Lower labor skills
Long production runs
Attention to productImprovement and costCutting
Reexamination of necessity of design compromises
Little product differentiation
Cost minimization
Overcapacity in the industry
Prune line to eliminateItems not returning goodMargin
Reduce capacity
STRATEGY AND ISSUES DURING A PRODUCT’S LIFE
MAKE-TO-STOCK VERSUS MAKE-TO-ORDER
CHARACTERISTICS MAKE-TO-STOCK MAKE-TO-ORDER
ProductProducer-specifiedLow varietyInexpensive
Customer specifiedHigh varietyExpensive
Objective
Main operationproblems
Manage deliveryLead times andCapacity
Balance inventoryCapacity, and service
Delivery promisesDelivery time
ForecastingPlanning productionCentral of inventory
Degree of Customer Interaction and Customization
Degree ofLabor
Intensity
Low
High
Low High
Service FactoryAirlinesTruckingHotelsResorts & Recreation
Professional ServiceDoctorsLawyersAccountantsArchitects
Mass ServiceRetailingWholesalingSchoolsRetail Aspects ofCommercial Banking
Service ShopHospitalsAuto RepairPrinting ShopOther Repair Shops
THANK YOU