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Capacity

Planning. Organizing. •. •. Capacity. Product and Service. Degree of centralization. –. –. Make or Buy. Subcontracting. –. –. Staffing. –. •. Location. –. Hiring/laying off. –. Layout. –. Use of Overtime. –. Projects. –. Directing. •. Scheduling. –. Incentive plans.

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Capacity

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  1. Planning Organizing • • Capacity Product and Service Degree of centralization – – Make or Buy Subcontracting – – Staffing – • Location – Hiring/laying off – Layout – Use of Overtime – Projects – Directing • Scheduling – Incentive plans – Controlling • Issuance of work orders • Budgeting • Reporting – Inventory – Job assignments – Quality – Responsibilities of operations management

  2. Tools for Decision Making. • Pareto (ABC) Analysis – Analysis of Tradeoffs – Operations Managers and decision making – Systems Approach Quantitative Approaches –

  3. Pareto phenomenon (ABC analysis) Classifying items, activities, 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 problems are caused by • 20% of the activities. How do we identify the vital few?

  4. Pareto phenomenon, ABC analysis, Recognition of Priorities Dealing with the fact that certain aspects of any management situation are more important than others is called recognition of priorities

  5. Analysis of tradeoffs Tradeoffs What are the pros and cons of models?

  6. Analysis of tradeoffs Buying a new machine Additional Investment Higher Productivity Better Quality More Flexibility Having more inventory Higher Carrying Costs More Obsolescence Better Customer Service

  7. Systems approach “The whole is greater than the sum of the parts.” Suboptimization 2 > 1+1

  8. Systems approach Systems approach and Sales Purchasing Production

  9. Systems A set of parts with interrelationship between parts organized to achieve a goal How systems grow up

  10. A model is an abstraction of reality. • Physical – Schematic – Models – Mathematical

  11. • Linear programming • Transportation model • Inventory models • Waiting line models • Statistical models Quantitative approach

  12. Recent trends • Global competition • Operations strategy • Flexibility • Cycle time reduction • Business process re-engineering • Supply Chain Management • Workers involvement • Lean Manufacturing • Total quality management

  13. Recent trends • Global competition • Global Market • Global Suppliers • Operations strategy • Quality based • Time based • Flexibility • Variety of products • High Volume as well as low volume • Cycle time reduction • The less time RM, WIP, and FG spend in the Manufacturing and Logistics process products the less opportunity they have to absorb costs

  14. Recent trends • Business process re-engineering • Value added and NVA activities • Supply Chain Management • Not from RM storage to FG warehouse • From the original suppliers to final consumers • Workers involvement • Workers are not cost they are assets • Lean Manufacturing • Inventory is waste • Total quality management

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