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Process View & Strategy Part 4- Some OM Tools and Techniques

Process View & Strategy Part 4- Some OM Tools and Techniques. Processing Time, Waiting Time; Long Waiting Line. Recent Trends. Global Competition Global Market Global Suppliers Supply Chain Management Not from RM storage to FG warehouse, but from the original suppliers to final consumers

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Process View & Strategy Part 4- Some OM Tools and Techniques

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  1. Process View& StrategyPart 4- Some OM Tools and Techniques

  2. Processing Time, Waiting Time; Long Waiting Line

  3. Recent Trends • Global Competition • Global Market • Global Suppliers • Supply Chain Management • Not from RM storage to FG warehouse, but from the original suppliers to final consumers • Under separate ownerships • Workers Involvement • Workers are not costs, they are assets • Total Quality Management • Lean Manufacturing • Inventory is waste • Variability is evil

  4. Lean Operations: The Real Cost of Inventory Inventory adversely affects all competing edges (P/Q/V/T) • Has cost • Physical carrying costs • Financial costs • Has risk of obsolescence • Due to market changes • Due to technology changes • Leads to poor quality • Feed back loop is long • Hides problems • Unreliable suppliers, machine breakdowns, long changeover times, too much scrap. • Causes long flow time Product Product Wait Customer

  5. Centralization; inventory and Capacity Centralization of stocks reduces inventory. • Centralization of Servers reduces waiting line. • Why doesn’t everybody do it? • Longer response time • Higher shipping cost • Less understanding of customer needs • Less understanding of cultural, linguistics, and regulatory barriers These disadvantages my reduce the demand.

  6. Pareto phenomenon (ABC analysis) Classifying items, activities, or tasks according to some measure of importance and allocating efforts and resources accordingly • A vital few things are important for reaching an objective or solving a problem. • 80/20 rule – 80% of the problems are caused by 20% of the activities. Recognition of Priorities.

  7. Models -Representations A model is an abstraction of reality • Narrative • Tabular • Schematic (Some times Physical) • Mathematical • Linear programming • Transportation model • Inventory models • Waiting line models • Statistical models Count what is countable. Measure what is measurable. What is not measurable, make it measurable. Galileo Galilei, 1564 -1642.

  8. Schematic Representation of the Process (Flow Charts) • Points where processing times are large. • Activities that contains material or capacity constraints. • Points where there is a high degree of resource sharing. When the same resource is required to process a variety of products. • Divergence points where common materials are transformed into different product streams. • Convergence points where multiple materials must come together. • Points of excessive variation. Mc Donald's make-to-stock system (Prior to 1999). Raw Material Finished Goods Customer places order Cook Assemble Deliver

  9. Value Stream Mapping • Points where processing times are large. • Activities that contains material or capacity constraints. • Points where there is a high degree of resource sharing. When the same resource is required to process a variety of products. • Divergence points where common materials are transformed into different product streams. • Convergence points where multiple materials must come together. • Points of excessive variation.

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