OPERATION S MANAGEME NT OPERATIONS AND PRODUCTIVITY L2 - 1.
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Transcript of OPERATION S MANAGEME NT OPERATIONS AND PRODUCTIVITY L2 - 1.
OPERATIONS MANAGEMENTOPERATIONS AND PRODUCTIVITYL2 -
1
CHANGING CHALLENGES FOR THE OPERATIONS MANAGER
Past Causes Future Local or national focus
Low-cost, reliable worldwide communication and transportation networks
Global Focus
Batch (large) shipments
Cost of capital puts pressure on reducing investment in inventory
Just-in-time shipments
Low-bid purchasing
Quality emphasis requires that suppliers be engaged in product improvement
SC partners, ERP
Lengthy product development
Shorter life cycles, rapid international communication, computer-aided design, and international collaboration
Rapid product development, alliances, collaborative designs
2
CHANGING CHALLENGES FOR THE OPERATIONS MANAGER
Past Causes Future Standardized products
Affluence and worldwide markets; increasingly flexible production processes
Mass customization
Job specialization
Changing socio-cultural scene. Increasingly a knowledge and information society.
Empowered employees, teams,
Low cost focus
Environmental issues, ISO increasing disposal costs
Environmentally sensitive production, Green manufacturing,
3
CHARACTERISTICS OF GOODS
Tangible product
Production usually
separate from
consumption
Consistent product
definition
Low customer
interaction
Can be inventoried 4
CHARACTERISTICS OF SERVICE
Intangible product
Produced & consumed at
same time
Inconsistent product
definition
High customer
interaction
Often unique
Often knowledge-based
Frequently dispersed
5
GOODS VERSUS SERVICES
Can be resold
Can be inventoried
Some aspects of
quality measurable
Selling is distinct
from production
Reselling unusual
Difficult to inventory
Quality difficult to
measure
Selling is part of
service
6
GOODS SERVICES
GOODS VERSUS SERVICES - CONTINUED
Product is transportable
Site of facility important
for cost
Often easy to automate
Revenue generated
primarily from tangible
product
Provider is transportable
Site of facility important
for customer contact
Often difficult to
automate
Revenue generated
primarily from intangible
service. 7
GOODS SERVICES
GOODS CONTAIN SERVICES / SERVICES CONTAIN GOODS
0 25 50 75 100255075100
AutomobileComputer
Installed CarpetingFast-food Meal
Restaurant MealAuto RepairHospital Care
Advertising AgencyInvestment Management
Consulting ServiceCounseling
Percent of Product that is a GoodPercent of Product that is a Service
8
THE PRODUCTION SYSTEM TRANSFORMS INPUTS TO OUTPUTS
The Production System
Land, Labor, Capital, Management
Goods and Services
Feedback loop
Inputs Process Outputs
9
PRODUCTIVITY
Measure of process improvement Represents ratio of output to input
Only through productivity increases can our standard of living improve
ProductivityProductivityProductivityProductivity UnitsUnits producedproducedUnitsUnits producedproducedInput usedInput usedInput usedInput used= = = =
10
MULTI-FACTOR PRODUCTIVITY
Productivity = Output
Labor + material + capital + energy + Misc
11
MEASUREMENT PROBLEMS
Quality may change while the quantity of
inputs and outputs remains constant
External elements may cause an increase or
decrease in productivity
Precise units of measure may be lacking
12
PRODUCTIVITY VARIABLES
Labor - contributes about 10% of the annual increase
Capital - contributes about 32% of the annual increase
Management - contributes about 52% of the annual increase
13
SERVICE PRODUCTIVITY
Reasons for low productivity in services
Typically labor intensive
Frequently individually processed
Often an intellectual task performed by
professionals
Often difficult to mechanize
Often difficult to evaluate for quality
15