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CHAPTER 18

CHAPTER 18. OPERATIONS MANAGEMENT. OPERATIONS MANAGEMENT (OM). The Nature of Operations Management Innovative managers do not just manage people--they must also manage technical resources and processes associated with the production of goods and services. OM STRATEGY AND MANAGEMENT DEFINED.

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CHAPTER 18

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  1. CHAPTER 18 OPERATIONS MANAGEMENT

  2. OPERATIONS MANAGEMENT (OM) • The Nature of Operations Management • Innovative managers do not just manage people--they must also manage technical resources and processes associated with the production of goods and services.

  3. OM STRATEGY AND MANAGEMENT DEFINED • operations strategy is part of the strategic plan which defines the role, capabilities, and expectations for operations management. • operations management involves the managerial activities and techniques used to convert resources into products and services • Refer to Exhibit 18.1 and 18.2 in the textbook

  4. ELEMENTS OF OPERATIONS PLANNING MODEL • Product and Service Design • design for manufacturability and assemble (DMFA) • Facilities Layout • process layout • production layout • cellular layout • fixed position layout

  5. ELEMENTS OF OPERATIONS PLANNING MODEL • Production Processes and Technology • robotics • CAD/CAM • Flexible Manufacturing Systems • Computer-Integrated Manufacturing • Computers and the Delivery of Service • Facilities Location • Capacity Planning

  6. THE MANAGEMENT OF OPERATIONS • Once strategic planning decisions about design, layout, process and technology, location, and capacity have been made, specific plans need to be developed for the overall production operations. This involves • Aggregate Planning • Master Scheduling • Structuring for Operations

  7. THE AGGREGATE PLAN • Involves planning production activities and the resources need to achieve them. Flow charts and road maps the production process based on demand forecasts and capacity of the operations. • Serves as the basis for the Master Plan

  8. THE MASTER SCHEDULE • Specifies the quantity and type of each item to be produced and how, when, where it should be produced. • Materials requirements are derived from the master schedule, and the schedule affects inventory levels

  9. STRUCTURE FOR PRODUCTION • Decisions on how to organize by department, whether to incorporate teams, nature of authority relationships, and extent of decentralization • The desired result is an integrated, flexible organizational structure which can respond to changes in the aggregate plan

  10. QUALITY AND PRODUCTIVITY CONTROLS • Productivity traditionally viewed in terms of output. Managers today realize productivity is high-quality units of output whether goods or services. • Quality measures related to after-the-fact determination of scraps, re-work, repair, and downtime. Now quality involves proactive design decisions which minimize these measures of quality.

  11. QUALITY AND PRODUCTIVITY CONTROLS • Design Control--focus on creating new products engineered for reliability, functionality, and serviceability. • Materials Control--achieved through effective purchasing and Just-In-Time manufacturing practices. • Inventory Control--critical aspect of operations management due to costs associated with inventory.

  12. QUALITY AND PRODUCTIVITY CONTROLS • Schedule Control--scheduling operations and tracking production. • Product Control--at one time focused on inspection of finished goods. TQM involves reducing probability and cost of poor quality with inspection and testing techniques prior to production.

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