Robbins Fom06 Basic 14

8/13/2019 Robbins Fom06 Basic 14

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PowerPoint Presentation by Charlie CookThe University of West Alabama

Fundamentals of ManagementSixth Edition

Robbins and DeCenzowith contributions from Henry Moon

C H A P T E R

14Part V: Controlling

2008 Prentice Hall, Inc.All rights reserved.

Operations Management


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2008 Prentice Hall, Inc. All rights reserved. 142

L E A R N I N G O U T C O M E S

1. Define operations management and the transformation

process.

2. Describe three reasons operations management is

important to all managers.

3. Differentiate between a service and a manufacturing

organization.

4. Define value chain management.

5. Explain the organizational and managerialrequirements for value chain management.

6. Identify the benefits and obstacles to value chain

management.

After reading this chapter, you will be able to:


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L E A R N I N G O U T C O M E S (contd)

7. Discuss technologys role in operations management.

8. Explain what is meant by the term just-in-time

management.

9. Describe what is meant by the term quality control.10. Explain the concept of project management.

After reading this chapter, you will be able to:


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The Importance Of Operations Management

Operations Management

The study and application of the transformation

process

OM Is Important Because It:

Encompasses processes in all organizationsservices as well as manufacturing.

Is important in effectively and efficiently managing

productivity.

Plays a strategic role in an organizations competitivesuccess.


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Transformation and Organizations

Transformation Process

The process through which an organization creates

value by turning inputs (people, capital, equipment,

materials) into outputs (goods or services).

Manufacturing Organization Produces physical goods.

Service Organization

Produces nonphysical outputs such as educational,

medical or transportation services.


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EXHIBIT 141 The Transformation Process


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Productivity

Productivity Defined

The overall output of goods and services produced

divided by the inputs needed to generate that

output.

Benefits of High Productivity

Fosters economic growth and development

Increases individual wages without inflation

Lowers costs and makes firms more competitive

InputsOutputs


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What Is Value Chain Management?

Value

The performance characteristics, features and

attributes, or any other aspects of goods and

services for which customers are willing to give up

resources.

Value Chain

The entire series of organizational work activities that

add value at each step beginning with the

processing or raw materials and ending with a

finished product in the hands of end users.


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Value Chain Management versus Supply

Chain Management

Value Chain Management

Improves the process of creating and transferring

documents by automating the flow of information.

Supply Chain Management Is the management of facilities, functions, and

activities involved in producing and delivering a

product or service, from suppliers to customers.


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The Goals Of Value Chain Management

Creating customer-defined value by:

Providing a unique combination that meets customer

needs and at a price that cant be matched by

competitors.

Having a sequence of participants work together as

a team, each adding a component of value to the

overall process.

Its all about providing value, not

bargains, to the customer


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Value Chain Management Requirements

Business Model

A strategic design for how a company intends to

profit from its broad array of strategies, processes,

and activities.

Value Chain Management Requirements Coordination and collaboration

Technology investment

Organizational processes

Leadership Employees/human resources management

Strong culture and attitudes


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EXHIBIT 142 Six Requirements for Successful Value Chain Management


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Steps in Collaboration

1. Look for common points of interest.

2. Listen to others.

3. Check for understanding.4. Accept diversity.

5. Seek additional information.

6. Dont become defensive.


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Effect of Value Chain Management on

Organizational Processes

Better demand forecasting is necessary and

possible because of closer ties with customers

and suppliers.

Selected functions may need to be done

collaboratively with partners in the value chain.

New measures are needed for evaluating the

performance of activities along the value chain.


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Implementing Value Chain Management

Benefits

Improved customer service

Cost savings

Accelerated delivery times

Improved quality

Inventory reduction

Improved logistics

management

Increased sales

Increased market share

Obstacles

Organizational barriers

Cultural attitudes

Required capabilities

People


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EXHIBIT 143 Value Chain Benefits

Source: G. Taninecz, Forging the Chain, Industry Week (May 15, 2000), p. 44.


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EXHIBIT 144 Obstacles to Successful Value Chain Management


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Contemporary Operations

Management Issues

Technology Role in E-Manufacturing

How an organization will transform its inputs into

outputs.

Just-in-time (JIT) Inventory Systems How to develop systems in which inventory items

arrive when needed in the production process

instead of being stored in stock.

Kanban


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Quality and Operations Management

Quality Control

Monitoring qualityweight, strength, consistency,

color, taste, reliability, finish, or any one of myriad

characteristicsto ensure that it meets some

preestablished standard.

Continuous Improvement

A comprehensive, customer-focused program to

continuously improve the quality of the organizations

processes, products and services.


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Managing Projects

Project

One-time-only set of activities with a definite

beginning and ending point in time.

Project Management

Task of getting the activities done on time, withinbudget, and according to specifications.


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Popular Scheduling Tools

Gantt Chart

Shows in bar graph form when tasks are supposed

to be done and compares that with the actual

progress on each task.

Load Chart

Is a modified version of a Gantt Chart; it lists either

whole departments or specific resources.

This information allows managers to plan and control for

capacity utilization in the scheduling of individual work

stations.


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EXHIBIT 145 A Sample Gantt Chart


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EXHIBIT 146 A Sample Load Chart


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PERT Network Analysis

Program Evaluation and Review Technique

(PERT) Network Analysis

A flowchart-like diagram that depicts the sequence of

activities needed to complete a project and the time

or costs associated with each activity.


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PERT Components

Events

End points represent the completion of activities

Activities

Actions that take place

Slack Time The time difference between the critical path and all

other paths

Critical Path

The longest or most time-consuming sequence of

events and activities required to complete a project

in the shortest amount of time


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EXHIBIT 147 Developing PERT charts

1. Identify every significant activity that must be achieved for a

project to be completed.

2. Ascertain the precedence order in which these events must be

completed and create a diagram reflecting the ordering of

activities.

3. Compute a weighted average time estimate (expected time) for

completing each activity.

4. Insert start and finish times into the diagram and inspect to

determine the critical path.


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EXHIBIT 148 Major Activities in Building a Custom Home

Documents

Robbins Fom06 Basic 14