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Managing Service and Manufacturing Operations

Learn how to include late-breaking stories in a daily paper, improve quality and productivity, and make decisions regarding efficiency and flexibility in production.

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Managing Service and Manufacturing Operations

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  1. Chapter 15 Managing Service and Manufacturing Operations

  2. What Would You Do?Producing a Daily Paper at Newsday • How can late-breaking stories be included in the paper? • How can quality and productivity be improved? • In terms of production, should they focus on efficiency or flexibility?

  3. Learning ObjectivesManaging for Productivity and Quality • discuss the kinds of productivity and their importance in managing operations. • explain the role that quality plays in managing operations. After discussing this section, you should be able to:

  4. Productivity Why Productivity Matters Kinds of Productivity

  5. Lower Costs Lower Prices Higher Standard of Living Higher Profits Higher Market Share Why Productivity Matters Higher Productivity

  6. Outputs Single Kind of Input Outputs Labor + Capital + Materials + Energy Kinds of Productivity • Partial productivity = • Multifactor productivity =

  7. Quality Quality-Related Product Characteristics Quality-Related Service Characteristics ISO 9000 Malcolm Baldrige National Quality Award Total Quality Management

  8. Quality-Related Product Characteristics • Reliability • the average time between breakdowns • Serviceability • the ease with which a product is fixed • Durability • mean time to failure

  9. Quality-Related Product Characteristics Reliability Tangibles Responsiveness Assurance Empathy

  10. ISO 9000 • A series of five international standards • Certifies quality processes • Managers often want this to improve customer satisfaction

  11. Malcolm Baldrige National Quality Award • Given to U.S. companies • Recognizes achievement in quality • Winners have been financially successful

  12. Total Quality Management Customer Focus and Satisfaction Continuous Improvement Teamwork

  13. Learning ObjectivesManaging Operations • explain the essentials of managing a service business. • describe the different kinds of manufacturing operations. • describe why and how companies should managerinventory levels. After discussing this section, you should be able to:

  14. Service Operations Service- Profit Chain Service Recovery and Empowerment

  15. Employee Satisfaction Service Capability High Value Service Customer Satisfaction Customer Loyalty Profit and Growth Service-Profit Chain Internal Service Quality Adapted From Figure 15.2

  16. Service Recovery and Empowerment • Service recovery is restoring customer satisfaction to strongly dissatisfied customers • Empowering workers is one way to speed up service recovery

  17. Manufacturing Operations Amount of Processing in Manufacturing Operations Flexibility of Manufacturing Operations

  18. Amount of Processing in Manufacturing Operations • Make-to-order operations • manufacturing doesn’t begin until an order is placed • Assemble-to-order operations • used to create semi-customized products • Make-to-stock operations • manufacture standardized products

  19. Flexibility of Manufacturing Operations Continuous- Flow Production Line- Flow Production Batch Production Job Shops Project Manufacturing Least Flexible Most Flexible Adapted From Figure 15.3

  20. Back to the FutureSoftware Simplifies Operations Management • Sophisticated mathematical and statistical models • now in easy to use software • Examples: • Resources in Motion Management System (RIMMS) • ROBCAD

  21. Inventory Types of Inventory Measuring Inventory Costs of Maintaining an Inventory Managing Inventory

  22. Vendors Component Parts Fabrication Work-in- Progress Final Assembly Initial Assembly Finished Goods Retailers Field Warehouses Wholesalers Distribution Centers Types of Inventory Raw Materials Adapted From Figure 15.4

  23. Measuring Inventory • Average aggregate inventory • the average overall inventory for a certain time period • Stockout • running out of inventory • Inventory turnover • the number of times a year that a company sells its average inventory

  24. Blast From The PastGuns, Geometry, and Fire • Whitney and standardized parts • interchangeable parts • fewer defects • Monge’s 3-dimensional drawings • more precise designs • Fire led to just-in-time at Oldsmobile

  25. Costs of Maintaining an Inventory • Ordering costs • all associated costs with ordering goods • Setup costs • changing goods produced • Holding costs • carrying inventory • Stockout costs • running out of inventory

  26. Dependent Demand Systems Independent Demand Systems Managing Inventory Economic Order Quantity Just-in-Time Kanban Materials Requirement Planning

  27. Been There, Done That Mr. Kaizen • America has focused on quality, not cost management • Eliminating muda is important • Must focus on gemba

  28. What Really Happened?Producing a Daily Paper at Newsday • Reduce delays by reducing production problems • Moved up most closing times but extended it for sports • Used both JIT and MRP

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