Mgmt 602 Midterm

• 1. Services and Manufacturing
• 2. Lean
• 3. Environmental Concerns and Sustainability
• 4. Globalization of Operations
• 5. Customer-directed Operations
• 6. Integration of Operations with other functions
• 7. Supply Chain Management

highly integrated in today's economy; services support manufacturing; manufacturing supports services

meet customer requirements, "voice of the customer"; customer can be a powerful driver in improving efficiency

concerned with eliminating waste activities in every part of business

integration between departments; pulling everyone in same direction; cross-functional teams; employee rotation; information systems; management coordination

offer products and services while eliminating waste in an effort to be concerned about the environment

integration of suppliers to --> producers to --> customers; process sped up via e-business

accelerating of international business; keep global interests in mind when developing business strategy

is a consistent pattern of decisions for the transformation system and associated supply chain that linked to the business strategy and other functional strategies, leading to a competitive advantage for the firm.

McDonald's -- Mission: quick food, consistent quality, low cost, clean and friendly; Objectives: compares cost, quality, and service to competitors

Process, Quality, Capacity, Inventory

specific equipment designed to provide meal quickly and careful; example, fry scooper, puts the right/same amount of fries easily every time

2,000 quality, food safety, and inspection checks during transportation of food; 72 safety and quality protocols at restaurants daily

restaurant capacity designed to keep waiting times to a minimum; more employees during higher flux of customers

Just-in-time replenishment; fast and frequent deliveries

originally was unique service and supply chain transformation; NOW it is continuous improvement of transformation system and the MickyD's brand

menu expanded, computerized/updated information systems, biodegradable paper wrappers, healthy food trend, global expansion, international operations (McRice in Indonesia)

competition of entire supply chains - NOT just smaller firms; need to take in account not only operations strategy, but also strategies of suppliers and customers in supply chain; supply chain needs to be unique and hard to copy; it is difficult to get suppliers on same mission, because #1 firm entirely controls supplier, but it should still be the goal

imitation and innovation

similar products, efficiency and low cost, high turnover

product differentiation, high prices, buffers, unpredictable demand, high profit margins, should not choose only one supply chain strategy for all products

Corporate strategy and business strategy

defines what the company is pursuing; EX. Walt Disney, business of "making people happy"

differentiation, low cost, or focus (unique, cheap and copied, can combine, is narrow or broad)

Mission, Objectives, Strategic Decisions, Distinctive Competence are the heart of operations strategy

needs to connect or even come from to business strategy

(cost, quality, delivery, and flexibility) sometimes other objectives can be added such as environmental sustainability, should derive from the mission in quantitative and measurable terms (use bench marking as a comparison to other companies, behind or ahead)

how objectives will be received, strategic decisions made for each process, quality, and inventory

(operations capability) that makes it unique, needs to match mission, may be used to define business strategy but NOT necessarily

Operations strategy, business strategy, marketing strategy, financial strategy [ALL LINKED]

Market Pull, Technology Push, Interfunctional View

· market will “pull” new products through; customer needs are the focus

technology determines new products; little regard for market; marketing creates demand

should fit the market need and have technological advantage as well; cross-functional teams make this happen, they have members from different departments (marketing, manufacturing, financial, etc.) work together to make the product from all different viewpoints

Concept Development, Product Design, Pilot Production/Testing

idea generation on how to satisfy market needs, several product concepts will be developed, different approaches are evaluated, one will be selected for the next phase; cross-functional team then established

· designing the physical product; establishes set specifications and engineering drawings; engineers will make decisions that affect cost, quality (features), and schedule, cross-functional teams will be involved in the process; engineers will use computer software to design virtual prototypes (CAD, computer aided design); process design should be done simultaneously so that product design isn’t locked in place if production issues arrive

complex products require testing of production protoypes ; process for production is finalized; an information package would be finalized that contains product and design specifications, training procedures, test results

 is common among product development, product design and operations don’t always line up; technology misalignment occurs when the product designed by engineering cannot be made in operations, happens when new technology is misunderstood and other reasons. 

where each function completes its work before the next one starts. For example, from marketing, it is handed off to engineering, and so on.

all areas are involved from the very beginning; each area shares efforts and ups and donwnplays its level of involvement during different stages

sign for Manufacturing, pg 52) (DFM) an approach including1. Simplification of products2. Manufacturing multiple products using common parts, processes, and modulesDesigning products so that they are easy to manufacture

Makes it possible for high product variety and low component variety simultaneouslyDevelop a series of basic components (modules) to make appearance of great number of different products, but to operations there are only a few components

Continuous Production Flow, Assembly Line Flow, Batch Flow, Job Shops, Project

refers to process industries such as sugar, paper, oil and electricity. High volumes of production, highly standardized and automated, tends to be industries that have liquids because they flow through, operate at capacity, minimize inventories and distribution costs; since it is difficult to differentiate, “low cost” is the winner

linear sequence of operations, form one step to the next from beg. To end usually on a conveyor system; industries such as automobiles, computers, refrigerators; very efficient, but inflexible; takes weeks to change over assembly lines; high capital investment; uses product layout because everything is organized according to production flow

production in batches or lots, products travel from one operation center to another; can make different types of products, so more variety; some products can skip some centers all together (bend, cut, paint, drill center), different flow paths, so the flow is jumbled and intermittent; configures equipment and workers, so more flexible; uses general-purpose equipment that is not specialized, which offers flexibility; can handle small orders; its jumbled flow causes production and inventory challenges, loses efficiency; uses process layout, where machines and workers organized by types in work centers; has less risk, economical, medium volume

special version of batch flow using process layout and making product to customer specifications; similar to batch process; small lot sizes

for unique or creative products; example: concerts, building construction; some projects are stationary; difficult planning and scheduling; labor may be highly skilled; cost may be too high; can be highly customizable

(TR) – TR = (Total Processing Time for the Job / total time in operations) x 100%

A strategy to provide products in lot sizes of one in high volume OR as other definition says mass customized production using computer aid; uses economies of scope, which is lots of variety of products from a single process; the process must cost the same as traditional mass production; early example is Motorola Pager

Modular production and assemble-to-order (ATO), Fast Changeover (zero setup time between orders), postponement of options

· Variety of options using assemble to order process – uses standard interchangeable modules (uses modular design) [ex. Dell]

· Computerized production that has unique barcodes for each customized order, zero changeover time in equipment [ex. Motorola pager]

· Defers a portion of production until the point of delivery [ex. T-shirt shops putting unique design at point of purchase] 

which means lots of the same product with few options

There are technologies for pollution prevention. investments in these reduce or eliminate pollutants from production; [ex.s: wasting fewer materials, updated equipment using less energy]

technologies are also investments, used to treat or get rid of pollutants and harmful by products, they are added existing processes, adding another step

Production process can have a great environmental impact 

providing processes that create value but aren’t a physical product

is a characteristic of services; customer is in the production system while the production takes place; customer can introduce uncertainty by adding demands; services can’t be stored; communications and electricity services are the only services that are provided over long distances 

are services that require interaction with the customer

 services that do not require interaction with the customer

some services are highly customizable, and others are standardized. Collier and Meyer suggest the service matrix to incorporate both customer preferences and service system design; On top is customer wants and needs (service package or bundle)The side is the operations service system, which includes process design – captures the number of different ways that service customers can take in the service process; an infinite number of ways makes each service entirely unique; meant to classify different types of services and indicate how the operations management task differs among services

 are services that customers want to be highly customized and unique, ex. Personal trainers, online shopping

is in the midrange of customer wants and needs and service system design, ex. Golf course

highly standardized services, ex. ATM, McDonald’s

customers may serve as labor at key points in a service process, ex. Bagging your own groceries 

After WWII, U.S. was head of mass production using repetitive manufacturing; leading to quality sacrifice and narrow jobs = job dissatisfaction; in 1960s, Toyota visited U.S. factories and decided not to copy setup; Toyota abhorred waste because of lack of resources; realized it needed to produce automobiles in smaller batches, w/ low inventory, simple and high-quality process, with involved workers; this BECAME Toyota Production System (TPS) and Just-in-Time (JIT) manufacturing 

Overproduction, waiting time, unnecessary transportation, excess processing, too much inventory, unnecessary motion, defects

more than demand, too much inventory

· machines waiting for parts, customers waiting in line

double or triple trips, poor workplace organization

· poor design of processes required extra labor or machine time

· due to large lot sizes, obsolete items, poor forecasts

· wasted movements

production of bad parts

1. Specify precisely what it is about a product or service that creates value form the customer’s perspective2. Identify, study, and improve the value stream of the process for each product or service· value stream  identifies processing steps and tasks undertaken to complete a project· value stream mapping – supports this tenet, creates a visual representation of the value stream of a process, chart example on pg 135· Gemba – Japanese term, opportunities defined in value stream3. Ensure that flow within a process is simple, smooth, and error-free, thereby avoiding waste· Waste  - anything that does not contribute value to the product or service · Muda – Japanese term for waste· Eighth form of waste – underutilization of workers; identified by Womack and Jones4. Produce only what is pulled by the customer· Push – typical mass production· Pull – mentality of lean production