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- Are a combination of goods and services.
- (For example, having the oil changed in your car is a service, but the oil that is delivered is a good.)
- Product packages can make a company more competitive.
Feedback and its purpose during the transformation process of inputs to outputs.
To ensure that the desired outputs are obtained, an organization takes measurements at various points in the transformation process (feedback) and then compares them with previously established standards to determine whether corrective action is needed (control).
productive companies, many in other countries, that are able to produce goods at lower costs.
Operation managements system design decisions.
..decisions that relate to system capacity, facility location, facility layout, product and service planning, and acquisition of equipment. These decisions usually require long-term commitments, and determine parameters of system operation.
Gave rise to industrial revolution, shifted craft production (ie. violin maker) to assembly lines, and able to employ lots of unskilled labor. [ie. by using standardized parts so any batch of parts would fit any automobile coming down the line].. hallmark of mass production, achieving high volumes of standardized products.. they achieved tremendous gains in industrial productivity, produced affordable products, and in the process greatly increased the standard of living of people in industrial nations.
The difference between production systems that have customized vs. standardized output.
- Customized outputs were craft productions (highly skilled workers, produced small quantities of customized goods, slow and costly, no economies of scale).
- Standardized output is mass production (large volume of stand. goods, low-skilled or semiskilled using costly equipment, decrease in assembly line and cost).
Characteristics of a service operation.
- Services are activities that provide some
- combination of time, location, form or psychological value.
Air travel, Education, Haircut, Legal counsel.
Remanufacturing -Refurbishing used products by replacing worn-out or defective components.
- A few factors account for a high
- percentage of the occurrence of some event(s).
- 80/20 Rule - 80% of problems are caused
- by 20% of the activities. In business, 20% of customers provide 80% of revenue.
- a method used by some companies to maximize the revenue they receive from fixed operating capacity by influencing demand through price manipulation.
- Also known as yield management, it has been successfully used in the travel and tourism industries by airlines, cruise lines, hotels, amusement parks, and rental car companies, and in other industries such as trucking and public utilities.
Ongoing trends in manufacturing.
Operations strategy, Working with fewer resources, Revenue management, Process analysis and improvement, and quality improvement.
Benefit of models in decision-making.
- Model - an abstraction of reality; a simplification of something. Common features of models:
- They are simplifications of real-life
- Models omit unimportant details so that attention can be concentrated on the most important aspects of a situation.
A sequence of activities & organizations—their facilities, functions, and activities—that are involved in producing and delivering a good or service.
Marketing and operations are the primary, or “line,” functions. Marketing is responsible for assessing consumer wants and needs, and selling and promoting the organization's goods or services. Operations is responsible for producing the goods or providing the services offered by the organization. To put this into perspective, if a business organization were a car, operations would be its engine.
Strategic operations management decisions.
- Two factors that tend to have universal strategic operations importance relate to quality and time. The following section discusses quality and time strategies.
- Quality-based strategies - Strategy that focuses on quality in all phases of an organization
- Time-based strategies - Strategy that focuses on reduction of time needed to accomplish tasks.
Definition of productivity.
A measure of the effective use of resources, usually expressed as the ratio of output to input.
Why the USA, fell behind other countries in the world during the 1970s and 1980s.
- A significant portion of U.S. productivity could be attributed to high agricultural productivity; manufacturing productivity tended to be lower.
- Merger, acquisitions, and create conglomerates were popular in the 1970s. However, these companies did not create a good fit because it pushed others out of their core competencies. No synergy because they were unrelated.
Factors affecting productivity.
- Numerous factors affect productivity. Generally, they are methods, capital, quality, technology, and management.
- Other factors: Safety, Layoffs, Labor turnover, Design of the workspace, Incentive plans that reward productivity
The reason for an organization’s existence
20. SWOT analysis.
- Internal Factors: Strengths and Weaknesses (evaluated by operations people).
- External Factors: Opportunities and Threats (eval. by marketing people).
Be able to calculate productivity for a single factorial problem.
(Similar to the example I went over in class)
- Multifactor Productivity (MFP) = Output / (Labor + Materials + Overhead)
- 7040 output / 1000 labor + 520 mat + 2000 oh = 2.0 units per dollar of input
The special attributes or abilities that give an organization a competitive edge.
Order winners and order qualifiers.
- order winners - Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition.
- order qualifiers - Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential for purchase.,
Examination of the function of parts and materials in an effort to reduce cost and/or improve product performance.
Design for disassembly
design for assembly (DFA) - Design that focuses on reducing the number of parts in a product and on assembly methods and sequence.
Designed for recycling
design for recycling (DFR) - Design that facilitates the recovery of materials and components in used products for reuse.
Basic research, applied research, development.
- Basic research has the objective of advancing the state of knowledge about a subject, without any near-term expectation of commercial applications.
- Applied research has the objective of achieving commercial applications.
- Development converts the results of applied research into useful commercial applications.
Advantages and disadvantages of standardization.
- 1. Fewer parts to deal with in inventory and in manufacturing.
- 2. Reduced training costs and time
- 3. More routine purchasing, handling, and inspection procedures
- 4. Orders fillable from inventory
- 5. Opportunities for long production runs and automation
- 6. Need for fewer parts justifies expenditures on perfecting designs and improving quality control procedures
- 1. Designs may be frozen with too many imperfections remaining.
- 2. High cost of design changes increases resistance to improvements
- 3. Decreased variety results in less consumer appeal
- Basic quality
- Refers to customer requirements that have only limited effect on customer satisfaction if present, but lead to dissatisfaction if absent
- Performance quality
- Refers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal
- Excitement quality
- Refers to a feature or attribute that was unexpected by the customer and causes excitement
- A form of standardization in which component parts are grouped into modules that are easily replaced or interchanged.
- Example: computers have modular parts that can be replaced if they become defective
- A strategy of producing basically standardized goods, but incorporating some degree of customization.
- Facilitating Techniques: Delayed differentiation & Modular design
- computer-aided design (CAD) - Product design using computer graphics.
- Increases productivity of designers, 3 to 10 times.
- Creates a database for manufacturing information on product specifications.
- Provides possibility of engineering and cost analysis on proposed designs
Factors associated with successful product and service design.
- Packaging products and ancillary services to increase sales.
- Using multiple-use platforms.
- Implementing tactics that will achieve the benefits of high volume while satisfying customer needs for variety.
- Continually monitoring products and services for small improvement opportunities.
- Reducing the time it takes to get a new or redesigned product or service to the market.
Sources for improved or new designs of products.
- To achieve a smoother transition from product design to production, and to decrease product development time, many companies are using simultaneous development, or concurrent engineering.
- It means bringing design and manufacturing engineering people together early in the design phase to simultaneously develop the product and the processes for creating the product.
- The idea is to design something that can actually be made and reflects what customers want.
Dismantling and inspecting a competitor’s product to discover product improvements.
Degree of newness.
- When changing a product there are varying degrees.
- Modification – not so much of a big deal because you may only change colors.
- Expansion – changes are more major and may require additional machinery.
- Cloning – more work put into setting up to produce.
- New product/service – significant changes and there is a question mark: will the market accept the product?