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7/21/2019 Krajewski Om9 Ppt 01mod
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1 1Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
CCOMPETINGOMPETINGWITHWITH
OOPERATIONSPERATIONS1
ForFor Operations Management, 9eOperations Management, 9ebyby
Krajewski/Ritzman/MalhotraKrajewski/Ritzman/Malhotra 2010 Pearson Eduation 2010 Pearson Eduation
PowerPoint !lidesPowerPoint !lides
by "e## $eylby "e## $eyl
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1 3Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Across the OrganizationAcross the Organization
aterial !
"ervice #nputs
"ales
$evenue
Product !
"ervice %utputs
&inance
'c(uires financialresources and capital
for inputs
arketing
)enerates salesof outputs
%perations
Translatesmaterials andservice into
outputs
"upport &unctions
'ccounting #nformation "ystems *uman $esources +ngineering
&igure 11
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1 -Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
A Process ViewA Process View
+xternal environment
#nformation onperformance
#nternal and externalcustomers
Processes andoperations
1
2
3
-
.
#nputs
/orkers anagers
+(uipment
&acilities
aterials
0and
+nergy
%utputs
)oods "ervices
&igure 12
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1 .Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
A Process ViewA Process View
Physical, durable output %utput can be inventoried
0ow customer contact 0ong response time apital intensive uality easily measured
#ntangible, perishable output %utput cannot be inventoried
*igh customer contact "hort response time 0abor intensive uality not easily measured
ore like amanufacturing
process
ore like aserviceprocess
&igure 13
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1 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
The Supply Chain ViewThe Supply Chain View
"upport Processes
+xternalsupplier
s
+
xternal
custome
rs
"upplierrelationshipprocess
4ew
service5productdevelopment
%rderfulfillmentprocess
ustomer
relationshipmanagement
&igure 1-
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7/241 6Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
The Supply Chain ViewThe Supply Chain View
ore processes are sets of activities thatdeliver value to external customers
1 "upplier relationship process
2 4ew service5product development process
3 %rder fulfillment process
- ustomer relationship process
"upport processes provide vital resourcesand inputs to the core processes
7/21/2019 Krajewski Om9 Ppt 01mod
8/241 7Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Support ProcessesSupport Processes
T'80+ 11 9 +:'P0+" %& ";PP%$T P$%+""+"
apital ac(uisition The provision of financial resources for theorgani
7/21/2019 Krajewski Om9 Ppt 01mod
9/241 >Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Operations StrategyOperations Strategy
"pecifies the means by which operationsimplements corporate strategy and helpsbuild a customer?driven firm
orporate strategy provides an overalldirection that serves as the framework forcarrying out all the organi
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10/241 1ACopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Operations StrategyOperations Strategy
&igure 1.
orporate "trategy
+nvironmental scanning ore competencies ore processes )lobal strategies
arket 'nalysis arket segmentation 4eeds assessment
ompetitive Priorities ost uality Time
&lexibility
4ew "ervice5Product Bevelopment Besign 'nalysis Bevelopment &ull launch
%perations "trategy
Becisions anaging processes anaging supply chains
ompetitive apabilities urrent 4eeded Planned
Performance)apC
4o
Des
7/21/2019 Krajewski Om9 Ppt 01mod
11/241 11Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Corporate StrategyCorporate Strategy
+nvironmental scanning
Beveloping core competencies
1 /orkforce
2 &acilities
3 arket and financial know?how
- "ystems and technologies
Beveloping core processes
)lobal strategies
7/21/2019 Krajewski Om9 Ppt 01mod
12/241 12Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Market AnalysisMarket Analysis
arket segmentation
4eeds assessment
"ervice or product needs
Belivery system needs
Eolume needs
%ther needs
7/21/2019 Krajewski Om9 Ppt 01mod
13/241 13Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Competitive PrioritiesCompetitive Priorities
T'80+ 12 9 B+#T#%4", P$%+"" %4"#B+$'T#%4", '4B +:'P0+" %& %P+T#T#E+
P$#%$#T#+"
%"T Befinition Process onsiderations +xample
1 0ow?costoperations
Belivering a service or aproduct at the lowestpossible cost
Processes must be designed andoperated to make them efficient
ostco
;'0#TD
2 Top (uality Belivering an outstanding
service or product
ay re(uire a high level of
customer contact and may re(uiresuperior product features
&errari
3 onsistent(uality
Producing services orproducts that meet designspecifications on aconsistent basis
Processes designed andmonitored to reduce errors andprevent defects
cBonaldFs
T#+
- Belivery speed uickly filling acustomerFs order
Besign processes to reduce leadtime
Bell
. %n?timedelivery
eeting delivery?timepromises
Planning processes to increasepercent of customer ordersshipped when promised
;nited Parcel"ervice G;P"H
Bevelopmentspeed
uickly introducing a newscience or a product
ross?functional integration andinvolvement of critical externalsuppliers
0i ! &ung
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14/241 1-Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Competitive PrioritiesCompetitive Priorities
T'80+ 12 9 B+#T#%4", P$%+"" %4"#B+$'T#%4", '4B +:'P0+" %& %P+T#T#E+
P$#%$#T#+"
&0+:#8#0#TD Befinition Process onsiderations +xample
6 ustomi
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15/241 1.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Order Winners and uali!iersOrder Winners and uali!iers
"
ales
GIH
'chievement of competitive priority
0ow *igh
%rder /inner
&igure 1
"ales
GIH
'chievement of competitive priority
0ow *igh
%rder ualifier
Threshold
7/21/2019 Krajewski Om9 Ppt 01mod
16/241 1Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
"sing Competitive Priorities"sing Competitive Priorities
ustomer relationship
Top (uality
onsistent (ualityBelivery speed
Eariety
4ew service development
Bevelopment speed
ustomi
7/21/2019 Krajewski Om9 Ppt 01mod
17/241 16Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
"sing Competitive Priorities"sing Competitive Priorities
%rder fulfillment0ow?cost operations
Top (ualityonsistent (uality
%n?time delivery
Eariety
At an airline
7/21/2019 Krajewski Om9 Ppt 01mod
18/241 17Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
"sing Competitive Priorities"sing Competitive Priorities
"upplier relationship0ow?cost operations
onsistent (uality
%n?time delivery
EarietyEolume flexibility
At an airline
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19/241 1>Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Operations StrategyOperations Strategy
T'80+ 13 9 %P+$'T#%4" "T$'T+)D '""+""+4T %& T*+ 8#00#4) '4B P'D+4T P$%+""
ompetitive Priority easure apability )ap 'ction
0ow?cost operations ost perbillingstatement
IAA713 Target isIAA
+liminate microfilming andstorage of billing statements
/eeklypostage
I16,AAA Target isI1-,AAA
Bevelop /eb?base process forposting bills
onsistent (uality Percenterrors inbillinformation
A>AJ 'cceptable 4o action
Percenterrors inpostingpayments
A6-J 'cceptable 4o action
Belivery speed 0ead time
to processmerchantpayments
-7 hours 'cceptable 4o action
Eolume flexibility ;tili7J Too high tosupportrapidincrease involumes
'c(uire temporary employees
#mprove work methods
7/21/2019 Krajewski Om9 Ppt 01mod
20/241 2ACopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Trends in Operations ManagementTrends in Operations Management
Productivity improvement
)lobal competition
+thical, workforce, and environmental
issues
7/21/2019 Krajewski Om9 Ppt 01mod
21/241 21Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Productivity #mprovementProductivity #mprovement
+:'P0+ 11alculate the productivity for the following operationsK
a Three employees process AA insurance policies in a weekThey work 7 hours per day, . days per week
"%0;T#%4
a 0abor productivity LPolicies processed
+mployee hours
L L . policies5hourAA policies
G3 employeesHG-A hours5employeeH
7/21/2019 Krajewski Om9 Ppt 01mod
22/241 22Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Productivity #mprovementProductivity #mprovement
+:'P0+ 11alculate the productivity for the following operationsK
b ' team of workers makes -AA units of a product, which issold in the market for I1A each The accounting department
reports that for this =ob the actual costs are I-AA for labor,I1,AAA for materials, and I3AA for overhead
"%0;T#%4
a ultifactor productivity L
Ealue of output
0abor cost M aterials costM %verhead cost
L L L 23.G-AA unitsHGI1A5unitH
I-AA M I1,AAA M I3AA
I-,AAA
I1,6AA
7/21/2019 Krajewski Om9 Ppt 01mod
23/241 23Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
ApplicationApplication
alculate the year?to?date labor productivityK
alculate the multifactor productivityK
This Dear 0ast Dear Dear 8efore 0ast
&actory unit sales 2,62,1A3 2,-6.,637 2,16.,--6
+mployment GhrsH 112,AAA 113,AAA 11.,AA
"ales of manufacturedproducts GIH
I->,33 I-A,731 N
Total manufacturing
cost of sales GIH
I3>,AAA I33,AAA N
!actory unit sales
employment
This Dear
2,62,1A3L 2-5hr
112,AAA
0ast Dear
2,-6.,637 L 21>15hr
113,AAA
Dear 8efore 0ast
2,16.,--6L I17>15hr
11.,AAA
sales o! m!g products
total m!g cost
This Dear
I->,33L 126
I3>,AAA
0ast Dear
I-A,731L 12-
I33,AAA
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C
OM as a Set o! $ecisionsOM as a Set o! $ecisions
#n practice, managersmake strategic andtactical decisions
1 +ach part of theorgani