Page 1


to production and operation management  operation strategies  Design operative system

ภ ภ  Strategy of productive systems: Process choice Quality

Designing productive systems Forecasting

Product / Process / Capacity / Supply chain Layout / Workforce

Operating Productive systems APP / MPS / Material Management (MRP Inventory ) / Scheduling / Quality control

Input Energy Materials Labour Capital Information

Value Added

Output Transformation Process -

People Plants Parts Processes Planning and Control


Goods or Services

Operations Goods Producing Storage/Transportation

Exchange Entertainment Communication

Examples Farming, mining, construction manufacturing, power generation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Retailing, wholesaling, banking, renting, leasing, library, loans Films, radio and television, concerts, recording Newspapers, radio and television newscasts, telephone, satellites


!"#ภ#%&'(!%)* + '-&)ภ& ./+


 5P People Plant Part Process Planning and Control system

 People Information








Customer contact



Uniformity of input



Labour content



Uniformity of output



Measurement of productivity



Opportunity to correct quality problems





Pure goods

Pure services

Crude oil production Motor vehicle Machine tool manufacture Laying or installing a carpet Fast food restaurant Restaurant meal Motor vehicle repair Computer support services Hospital care Management consultancy Counselling

ภ ภ   

-&)ภ&>#/?@*  ภ&&-&JF%#%F.*KBF  ภ&.AB*ภ&!C0)#  ภ&')B!C+F"  ภ&/%/*&'C->ภ &&-&&1ภ&LMNJ&ภ)  !"(ภ(/F&* World Class ' !O*N&&"/+"P#)  0)#)* +E(+#& !"#+Fภ& Gภ+  HGภ.&I! CA ภE("%

In order to survive and to prosper (meet the strategic challenge) every organization must: Define and grow Internal Competencies


and maintain an alignment with the environment  Create the future

Meeting the Strategic Challenge

Competitive Advantage Does something better than other organizations Does something that order organization can’t Can compete in the world market

What is Strategy? B

A Where the firm is today

Where the firm wants to be in the future

Strategy is the best means for the firm to get from Point A to Point B

LAB0%*".Q*F%R&? Where are you now?  -. /ก 01234  . /ก 01234

Where you want to go? How to go there?

Business Business Proposition Proposition

Profits = Quantity (Revenue - Cost) MARGIN 3 most fundamental variables in Business

World class manufacturing 1990 s  ภ:-;= < >ภ ?@A World class -0B<B1/?Cภ A/<-0 Total Quality Management Just In Time Design For Manufacturing

World Class Manufacturing B>? 23 J;

>-< ŕ¸


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Key long term success 2M? N/2ON-OภA@A A/2M ( differentiate ) TQM JIT ภP2M:-  O0 :- //ภ . /ภ01234ภ A/< /ภ ภ< core competencies > Knowledges ?/ future capabilities ;TN  best practice  A <NT Focus fact Strategic Fit

Outside in (Market requirement) Changing environment World Class able to compete

Strategic Resonance

Inside out (Resource based) Core competencies Distinctive Capabilities

Market requirement

Operations capabilities

low defect dependable and fast delivery high performance products customize products broad product line price competitive product design

process and product quality delivery reliability and speed low - cost production new product innovation

Strategic decision making

Market requirements dissonance

Plant capabilities


The Business Operations of the Organization

The needs and wants of the organization]s customers or clients



 -  A Output

Feedback Transformation Inputs Capital Technology Transformation Energy of inputs,Adding Know-how Value throughout Experience the entire process from basic inputs Input: to finished goods and services Material Customer information

The final,completed product/service offering for the customer. Tangible and Intangible elements. Combining physical and psychological effects and benefits for the customer are in place in the final transaction. Services and production operations have become linked




Supplier processes

Operations processes

Supplier Operations processes processes

Supplier processes

Sales processes Sales processes

Operations EDI EDI processes

Supply system evolution

Sales processes

Operation processes

Operation processes Supplier processes

Sales processes

Operation processes Supplier processes

Supplier processes


Sales processes Supplier processes

Operation processes

Sales processes Operation processes Supplier processes

Sales processes

Sales processes

A Cluster of Value

Value chain A systematic way of examining all of the organizationâ&#x20AC;&#x2122;s functional activities and how well they create customer value .

Value Chain Analysis

Support Activities

Administration and Infrastructure Human Resource Management Product / Technology Management

Value addedCost = Margin


Sales and Marketing

Outbound Logistics


Inbound Logistic


Primary Activities Input

Linking with other firms to

Operations and supply

Operations and supply

Operations and supply

End customer Operations and supply

Supply link

Supply link

Core Operations


Supply link

Supply link


Constant dialogue needs to take place between operations and marketing. Cohesion needs to be place in term of; Forecast Delivery promises versus scheduling commitments Design specifications Product assembly Supply involvement and Capabilities

Example of the Firm]s Operations Tactical

Operations activities Strategic Day to day scheduling Capacity scheduling Future capacity; Loading Expansion new site Process quality; Quality management TQM; impacting on SPC charts Monitoring cost Delivery Reliability Change-over times; Process technology Investing to meet Tooling Maintenance customer specifications; inc. speed,flexibility Buying materials Inventory management Strategic purchasing; Buy/make decisions Strategic relationships

Capabilities The organizational routines and processes that determine how efficiently and effectively the organization transforms its input (resources) into outputs ( products , including physical goods and services)

Core competencies The organization â&#x20AC;&#x2DC;s major value-creating skills and capabilities that are shared across multiple product lines or multiple businesses

Manufacturing era Craft Mass production Current / Future Mass customization (Consumer wishes) Flexible specialization (value adding process Lean production ( Zero waste) Agile (Switch from one market driven objective to another) Strategic manufacturing

Robot Parts  Controller hardware,

software, power source

 Manipulator robot


 End-effector “hand”

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 6 - 38

Hierarchy of Strategy Corporate Strategy Business (Division Level)

Strategy Functional Strategy

Mission and Objective objective Survive Profitable Growth

Operation Objectives Product Quality Cost Delivery Safety Morale Environment Ethics ( P Q C D S M M )

Competitive Factors

The link between production and competitive factors Competitive factors Operations task Offer consistently low defect rates Offer dependable delivery Provide high performance products Offer fast deliveries Customize products and services to customer needs Profit in price competitive markets Introduce new product quickly Offer a broad product line Make rapid volume changes Make rapid product mix changes Make product easily available Make rapid changes in design

Process quality Delivery reliability Product quality Delivery speed Flexibility Low cost production Rapid innovation Flexibility Flexibility Customization ; Flexibility Delivery speed/reliability Flexibility

Competitive comparison

Benchmarking of Do the organization]s capabilities operation capabilities provide competitive advantage? to determine CA Do the weaker areas cause disadvantage?

Cost Delivery speed Delivery reliability Rapid innovation Flexibility Distribution 1 2 3 4 5 Poor same as Vastly competitor superior

1 2 3 4 5 major neutral major disadvantage advantaage

 ภ&-&)(&ภ&0)#J-*#+F World Class  World Class

FK RC+L@ &')LN) ' &')LN)0  ภ&-&)(&ภ&0)#?.Q*.&KBFLAB#+F#C)*E#FC.!.&' !C+F".AB*'%0ภ&'L ภ&#C)*Eภ&-&)(&ภ&0)#"A 3 &'C&'C-.P)ภJLN3 Strategic Choice &'C-ภ&FFภ-- Design Decision &'C-t)-#)ภ& Operating Decision

A process model of operations Strategy 1. Analyzing the environment 2. Internal appraisal 3. Formulate corporate strategy 4. Determine the implications for operations 5. Examine the limitations that financial and technological factors place on operations 6. Decision Operations systems 7. Plan operations 8. Manage and control operations

Operations Strategy External environment Corporate vision Internal environment and goal Industry / business Resources conditions Operations Strategy Core competencies Key success factors Positioning strategies Strategic choice



Strategic Choice  Corporate

Strategies Strategic Choice : Future Direction Competitive Priorities  Market Analysis : Market segment Need Assessment  Competitive Priorities

: Quality ( Design Consistent Performance)

Cost Delivery (Fast On-time ) Flexibility (Volume Customization)  Shifts in Competitive Priorities

: Product / Service Life Cycle  Positioning Strategies :Focus Make to stock /Order Assembly to Order





Design New Technology Capacity Location Layout Job Design

Operating Material Management Aggregate Plans Inventory

Systems Master Production Scheduling Operation Scheduling Statistical Process Control Maintenance

Process Management


Technology and Product Design  Process and Management  Process Technology and Process Design  Process Selection

Product Technology and Product Design Marketing Strategy Me -too Product Market Expansion

Product Development Innovation

Customer Requirement Industrial Design Design for Manufacturing

Product Strategy

Products & Services Design Technology Development Design for Manufacturing (DFM ) Make-to-order made to customer specifications after order received

Make-to-stock made in anticipation of demand

Assemble-to-order add options according to customer specification

Concurrent Engineering (Product Development Stage) <dภ;<= J<Ke4 Product Concept Functional Specifications Product Specifications Process Specifications


Process and Management  Process T Set of logically related

productive tasks tend to cross internal / external organizational boundaries  Process Management T ภภ ภ-M / >B<B1//ภ 2ON?<;<34ภ<;TN ภ?  > ภ2ON-O ภ<-? L TภInput Operation Work Flow > 3Oภ ?  > ภ

Processes & Technology Flexible Manufacturing System (FMS)


one-time production of product to customer order

 Batch production process many jobs at same time in batch

 Mass production produce large volumes of standard product for mass

market  Continuous processes very high volume commodity product

Product-Process Matrix Continuous production

High Volume

Mass production Batch production Projects

Low Low



Product-Process Matrix High Labor Intensity

Service Factory Mass Service Service Shop

Professional Low Service




Process Technology and Process Design  Process Technology

(CIM) CAD CAM NC Robots AMH FA FM S  Process ( Flow ) Design  Process Analysis  Process Reengineering Macro level focus on overall process  Process Improvement Micro level focus on redesign any process

Process: Apple Sauce

1 2 3 4 5 6 7 8 9 10 11

Unload apples from truck 20 Move to inspection station 100 ft Weigh, inspect, sort 30 Move to storage 50 ft 360 Wait until needed Move to peeler 20 ft Apples peeled and cored 15 Soak in water until needed 20 5 Place in conveyor Move to mixing area 20 ft 30 Weigh, inspect, sort Page 1 0f 3

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Description of process

Time (min)

Analyst: TLR Operation Transport Inspect Delay Storage

Location: Graves Mountain


Date: 9-30-95

Distance (feet)

Process Flowchart


480 190 ft Ch 6 - 21

Computer Integrated Manufacturing (CIM) CIM FMS CAD /CAM NC MRP Kamban Data Based Robotics EDI Manufacturing Systems Production support Design Information Technologies

Process Selection  Process Type





 Process Flow Structure

Job shop Batch Assembly Continuous Product - Process Matrix ( Product - Process Focus )  Major

Process Decision

Process choice Resource Flexibility Capital Intensity

Vertical Integration Customer Involvement Economy of scope

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Some Dimensions of Product Quality  Performance

– relative to customer’s

intended use  Features – special characteristics  Reliability – likelihood of breakdowns, malfunctions  Serviceability – speed/cost/convenience of servicing  Durability – amount of time/use before repairs  Appearance – effects on human senses

Determinants of Quality  


Quality of design – products/service designed based on customers’ expectations and desires Quality capability of production processes – processes must be capable of producing the products designed for the customers Quality of conformance – capable processes can produce inferior product if not operated properly Quality of customer service – a superior product does not mean success; must have quality service also Organization quality culture – superior product and service requires organization-wide focus on quality

Traditional View of How Much to Inspect

Annual Cost ($)

Optimal Level of Inspection Total Quality Control Costs Cost of Scrap, Rework, and Detecting Defects Cost of Defective Products to Customers


% of Products Inspected

Modern Quality Management  Quality

Gurus  Quality Drives the Productivity Machine  Other Aspects of the Quality Picture

The Quality Gurus 1. Deming : Management is responsible 14 Principles 2. Juran : Quality trilogy Planning Control Improvement

3. Crosby : Quality is free Defect


Quality Gurus 

W. Edwards Deming 


Assisted Japan in improving productivity and quality after World War II In 1951 Japan established Deming Prize US was slow in recognizing his contributions Introduced Japanese companies to the PlanDo-Check-Act (PDCA) cycle (developed by Shewart) Developed 14 Points for managers

PDCA Cycle 4. ACT 1. PLAN Permanently Identify imimplement provements and improvements develop plan 3. CHECK Evaluate plan to see if it works

2. DO Try plan on a test basis

Elements of TQM  Top

management commitment and involvement  Customer involvement  Design products for quality  Design production processes for quality  Control production processes for quality  Developing supplier partnerships  Customer service, distribution, and installation  Building teams of empowered

Wrap-Up: World-Class Practice  Quality

begins when business strategy is formulated  Quality is the weapon of choice to capture global markets  Quality drives the productivity machine  Not depending on inspection to catch defects; concentrating on doing things right the first time  Committing tremendous resources to put in place TQM programs aimed at

Five-Step Chain Reaction Cost decline Improved productivity Increased market share Increased profits More jobs

ภ;0ภK4J0ภ>J0 Economic Forecasts Revised Demand Initial Demand Forecast Forecast Technological Forecasts

/L31ภL /L.O  J<Ke4 BoLL<02/?</ .A/  -1 0;  L

Resource Forecasts

Components of demand 1 .

A v e r a g e 2 . T r e n d 3. Seasonal influence 4 . C yc l i c al m o v e m e n t 5. Random Error

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Detailed Planning and Scheduling Causal (Daily Production Schedule) Judgement

>-</0 >O0ภ;0ภK4

Aggregate Planning Staffing Plans Process Modifications

Capacity Planning Facility Planning Process Planning

NM ?<d

Causal Judgement


Time Series Causal Judgement 0

(Qualitative )Methods Sales force estimates Executive opinion Market research Delphi method

Quantitative Methods Causal

(Linear Regression) Time Series Smoothing Moving Average Exponential Decompositions Additive Mutiplicative

ภ/ ภM </   Total

Demand  Market share  Company share  Capacity Cushion =


Design capacity 1Utilization capacity Effective (Utilization) capacity Actual output Rate

Capacity Expansion Strategies Capacity lead strategy Units Capacity

Capacity lag strategy Units Demand


Demand Time


Average capacity strategy Units

Incremental vs. one-step expansion Units

Capacity One-step expansion Demand Time Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Incremental expansion Demand Time Ch 11 - 4

Level Production Demand Productio n

Unit s


Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 11 - 11

Chase Demand Demand

Units Productio n Time

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 11 - 12

APP Using Pure Strategies Quarter (lb) Spring Summer Fall Hiring cost = $100 Winter per worker

Sales Forecast 80,000 50,000 120,000 150,000

Firing cost = $500 per worker Inventory carrying cost = $0.50 pound per quarter Production per employee = 1,000 pounds per quarter Beginning work force = 100 workers Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 11 - 13

Level Production Strategy Quarter Spring Summer Fall Winter

Sales Forecast 80,000 50,000 150,000 400,000

Production Plan 100,000 100,000 120,000 100,000

Inventory 20,000 70,000 100,000 0 140,000


Cost = 140,000 pounds x 0.50 per pound = $70,000

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 11 - 14

Chase Demand Strategy Sales Forecast 80,000 50,000

Quarter Spring Summer Fall

Production Workers Plan Needed 80,000 80 50,000 50 120,000 120,000

Workers Hired 120

Workers Fired 20 30 70

30 100






Cost = (100 workers hired x $100) + (50 workers fired x $500) = $10,000 + 25,000 = $35,000 Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 11 - 15

Examples of Capacity Measures Measure of Capacity Type of organization



Truck manufacturer Machine hours per shift Number of truck per shift Hospital Number of beds Number of patients treated per day Airline Number of planes Seat-miles flown per week Restaurant Number of seats Customer served per day Retailer Size of display areas Number of customers per week Theater Number of seats Number of customers per week

Measuring Capacity Type  Output measure for product focus  Input measure for process focus Utilization  Average output rate / Maximum capacity  Design (or peak) capacity  Effective capacity

Economies and Diseconomies of Scale 250 O0/

500 O0/


21k ON0 A @Bs0 Economies Diseconomies of scale of scale <  (LM @Bs0A?<B- 4)

Reason for Economies of Scales A. Spreading fixed costs. B. Reducing construction costs. Example of a trash burning plant : Cost ($ Million) Expansion Size (MW) 12.5 25.0 50.0

C. Cutting cost of purchased materials. D. Finding process advantages.

25 36 54

Pressure for Large Cushion  Uneven demand  Uncertain demand  Changing product mix  Capacity comes in large

increments  Uncertain supply

Pressure for Small Cushion  Capital


ROI and Capacity Cushions Capital Intensity Low High

Capital Cushions Small Medium Large 28 21 25 17 11 7

Conclusion: A small cushion is vital for capital-intensity businesses.

Expansionist Strategy Concept  Large, infrequent jumps in capacity  Stays ahead of demand Advantage  Lost sales unlikely  Economies of scale (Construction cost and learning)  Preemptive marketing

2 ภ > 4ภ/ ภM </  ภ > 4L1-121 ภ<-? L /: @ ABoLL1<?123 Computer


Evaluate the alternatives Qualitative  Fit with capacity strategy and other aspects of business  Uncertainties: demand, competition, Technology, and cost estimates  zWhat-if{ analysis Quantitative All cash flows attributable to the project, compared to the base case, including  Revenue and costs  Changes in assets and liabilities


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 U  )&1L.KFภC.KFภL.KFภ .ภI-&!-&!"/+F"G  !). &'(3/+F"G.Q*.P)&)"1 Preference Matix Load-Distance Model Break-Even Analysis Transportation Model  !).

&'(3C+* J1

Location Rating Factor  Identify

important factors  Weight factors (0.00 - 1.00)  Subjectively score each factor (0 - 100)  Sum weighted scores

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 27

Location Factor Example Scores (0 to 100) Location Factor Weight Site 1 Site 2 Site 3 Labor pool and climate.30 80 65 90 Proximity to suppliers .20 100 91 75 Wage rates .15 60 95 72 Community environment .15 75 80 80 Proximity to customers.10 65 90 95 Shipping modes .05 85 92 65 Air service .05 50 65 90 Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 28

Location Factor Example Weighted Scores Site 1 Site 2 Site 3 Location Factor Labor pool and climate 24.00 19.50 27.00 20.00 18.20 15.00 Proximity to suppliers 9.00 14.25 10.80 Wage rates Community environment 11.25 12.00 12.00 6.50 9.00 9.50 Proximity to customers 4.25 4.60 3.25 Shipping modes 2.50 3.25 4.50 Air service Total Score 77.50 80.80 *82.05 Ch 9 - 29 Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

The Transportation Model  Ship

items at lowest cost


have fixed supplies


Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

have fixed demand

Supp to Ch 9 - 2

Transportation Problem Grain Elevator


1. Kansas City 2. Omaha 3. Des Moines

150 175 275 600 tons



A. Chicago B. St. Louis C. Cincinnati

200 100

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

300 600 tons Supp to Ch 9 - 3

Shipping Cost Table Grain Elevator Kansas City Omaha Des Moines

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Chicago A $6 7 4

Mill St. Louis B $8 11 5

Cincinnati C $10 11 12

Supp to Ch 9 - 4

The Transportation Tableau To From Kansas City

ChicagoSt. LouisCincinnati Supply 6 8 10 150 7






Omaha Des Moines Demand

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e




175 275 600

Supp to Ch 9 - 5

Network Of Routes Des Moines (275) 5 Omaha (175)

4 12

7 11 Cincinnati (300)

11 6 Kansas City (150)

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Chicago (200)

10 8

St. Louis (100)

Supp to Ch 9 - 6

Solving TransportationProblems  Manual


 Stepping-stone  Modified


distribution (MODI)


 Excel  POM

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

for Windows

Supp to Ch 9 - 7

Solution For Grain Shipment Elevator Kansas City Omaha Des Moines Demand Shipped Cost

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Chicago Shipped 25 0 175 200 200

Mill St. Louis Cincinnati Supply 0 0 100 100 100

125 175 0 300 300

150 175 275 600

150 175 275


Supp to Ch 9 - 8

Unbalanced Problems Location Capacity(tons) A. Charlotte 90 B. Raleigh 50 C. Lexington 80 D. Danville 60 280 Location Demand (tons) 1. Richmond 120 2. Winston-Salem100 3. Durham 110 330 Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Supp to Ch 9 - 9

Shipping Costs

From A B C D

1 $70 120 70 90

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

To 2 $100 90 30 50

3 $50 40 110 70

Supp to Ch 9 - 10

Transportation Solution Tableau To

WinstonRichmondSalem Durham Supply From 500 100 50 90 90 Charlotte 120 90 40 30 20 50 Raleigh 70 50 110 80 80 Lexington 90 50 70 Danville 40 20 60 Demand Cost Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

120 15900


110 Supp to Ch 9 - 11

Supply Chain  Facilities,

functions, activities for producing & delivering product or service from supplier to customer


managing, acquiring, producing, warehousing, distribution, delivery

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 2

Supply Chain Design  Strategic

issue  Apply quality management principles  Benchmark to learn what is possible  Work with suppliers & customers to achieve goals  Control inventory

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 7

Global Supply Chain  Free

trade & global opportunities  Nations form trading groups  No tariffs or duties  Freely transport goods across borders

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 9

Factors In Heavy Manufacturing Location  Construction



costs  Raw material & finished goods shipment modes  Proximity to raw materials  Utilities  Labor availability Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 17

Factors In Light Industry Location  Construction



costs  Easily accessible geographic region  Education & training capabilities

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 9 - 18

Factors In Warehouse Location  Transportation  Proximity

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e


to markets

Ch 9 - 19

Factors In Retail Location  Proximity  Location

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

to customers

is everything

Ch 9 - 20

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Ranking System For Departments A E I O U X

- absolutely necessary - especially important - important - okay - unimportant - undesirable

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 17

Relationship Diagramming Example Production Offices Stockroom




A X Shipping and Receiving U U O O Locker Room O Toolroom Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e




Ch 7 - 18

ก/ </ก>ก( Process Layout ) /+FCA


 กB>?/4 >./ 21NM  <ก>ก NM  /B<>ก A0~

 ?@|?O0 <d/TN/


 ./ 21 >Td2ONกP? / </ก


   A/ ก 0  TN/TL<-ก<?-1/ A/<  /  >1ก 0ก

Manufacturing Process Layout Lathe Department

Milling Department

Drilling Department































Grinding Department Receiving and Shipping

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Painting Department




Assembly Ch 7 - 6

Block Diagramming Example LOAD SUMMARY CHART DEPARTMENT DEPT. 1 2 3 4 5 1 100 50 2 200 50 3 60 40 50 4 100 5 50 60 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 13

Initial & Final Designs

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 14

Block Diagrams

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 15

Service Process Layout Women’s lingerie Women’s dresses



Cosmetics Children’s & Jewelry department

Women’s Entry & Men’s sportswear display area department

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 7

A Product Layout IN


Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 8

ก/ </ J<Ke4 (Product Layout ) /+FCA

/+ F .A   <ก>ก P  ? / </NM  :A/<d/TN/L<กA0~

 ?ON0/Aก22ก  </  0T- 01ANM  CB Kก NM

ก. B>0.42<;0ก2ONOกPNM-0

Balancing The Line Workstation 1 2 3

Task A B C D

Remaining time 0.3 0.1 0.0 0.1




A, B



Feasible tasks B none none

0.3 min 0.4 min 0.3 min Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 7 - 28

ภ/ </ @ภ? ( Hybrid Layout )  "AL@

Product -Process Layout


Worker Multiple Machine  Group Technology Group parts or Products into Families Create GT cell for each Family

Labor Planning  Employment

Policy Variable Fixed level  Work Schedule Standar Work Schedule Flexible Work Schedule Part Time

/?//4ภภ<ภ01234ภ  > &&+--G Vertical

> &&+--&.("'ภ-FJ#(ภ&&" Mass Horizontal

.("'ภ-FJ#(ภ&&"LABCK (J%*G ProductionLAB"Aภ{1' LAB"Aภ{1'  ภ)ภ&&".ภ)C@MÂ&#x20AC;


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2M:/2M/ / Job Design ภ ภ/ .(#J0L.|&{zภ)

.(#J0L "

Technical- Physical factors

Sociopsychological factors


/4B>ภภภ/  Job

Specialization  Job Expansion Enlargement Rotation


 Psychology  Self-Directed

Team  Reward/ Incentives  Ergonomics  Lean Production

ภ > 4 3Oภ2M/  ;TN  3ภO 2M/C@ภ/

B -J<0 :-1KJ;}

 2 2ON.

Flow Diagram ภ&R( Process Chart Activity Chart *ภ-. &KBF Operation Chart "KF+ "KF/!

Process Flowchart Symbols


Operation - direct contribution to product/service Transportation - move to another location Inspection - examine for completeness, quality Delay - process has to wait Storage - store product/service for later use

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 13

Process Flowchart Job: Page:

Copying Job 1


Analyst: Calvin

Desk operator fills out work order Work order placed in “waiting job” box Job picked up by operator and read Job carried to appropriate copy machine Operator waits for machine to vacate Operator loads paper Operator sets machine Operator performs and completes job Operator inspects job for irregularities Job filed alphabetically in completed shelves Job waits for pick up Job moved by cashier for pick up Cashier completes transaction Cashier packages job (bag, wrap, or box)

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e


D D D D D D D D D D D D D D Ch 8 - 14

Job Photo-Id Cards Time Operator

-1 -2 -3 -4 -5 -6 -7 -8 -9 -10

Worker-Machine Chart Date 10/14 Time Photo Machine


Key in customer data on card


Feed data card in Position customer for photo Take picture

0.4 1.0 0.6

Accept card Idle Begin photo process



Photo/card processed

Inspect card & trim edges



Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 15

Labor Standard / Work Measurement / Work Standard

Work Measurement Historical Data Direct Time Study Reference Data Work Sampling Work Standard + Time Standard =Normal Time (1+Allowance) Time Study Average

<dภÂ&#x20AC;Â&#x201A;ภ   (Time Study)  <d2ON

1  Tภ/2ON/ภÂ&#x20AC;Â&#x201A;ภ   <d2ON 2 A//ภB/4B>ภ0A0  <d2ON 3 ภM -ภ1A<0A/2ON/ภ< <d2ON 4 L< /4B>ภ/

A<d ><2Â&#x201A;ภA  <d2ON 5 MK  Average Actual cycle time  <d2ON 6 MK  Bภ ภM -Normal time  <d2ON 7   Normal Time  <d2ON 8 MK  } Standard Time

Time Study Observation Sheet

Identification of operationSandwich Assembly Operator Smith


Approval Jones

Observer Russell

Cycles 1 Grasp and layout 1 bread slices






Summary 7


9 10 ÎŁ t

t RF Nt

t .04 .05 .05 .04 .06 .05 .06 .06 .07 .05 .53 .0531.05.056 R .04 .38 .72 1.051.401.762.132.502.893.29

Spread mayonnaise t .07 .06 .07 .08 .07 .07 .08 .10 .09 .08 .77 .077 1.00.077

2 on both slices

R .11 .44 .79 1.131.471.83 2.212.602.983.37

Place ham, cheese, t .12 .11 .14 .12 .13 .13 .13 .12 .14 .14 1.281.28 1.10.141

3 and lettuce on bread

R .23 .55 .93 1.251.601.962.342.723.123.51

t .10 .12 .08 .09 .11 .11 .10 .10 .12 .10 Place top on sandwich, 4 slice and stack R .33 .67 1.011.341.712.07 2.442.823.243.61 Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 22

Time Study Example 

Compute average element time ∑ t 0.53 t= = = 0.053 n 10

Normal time = (Elemental average) (rating factor) Nt = ( t )(RF) = (0.053)(1.05) = 0.056 Normal Cycle Time = NT = ΣNt = 0.387

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 23

ST = (NT) (1 + AF) = (0.387)(1+0.15) = 0.445 min How many sandwiches can be made in 2 hours? 120 min = 269.7 or 270 sandwiches 0.445 min/ sandwich

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 24

Incentive Piece-Rate Example Piece-rate is $0.04 per sandwich  What would average worker earn per hour? 

60 min = 134.8 or 135 sandwiches 0.445 min/ sandwich

Wage rate = (135)(0.04) = $5.40

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 8 - 25

Studied Workerâ&#x20AC;&#x2122;s Wage  Average

cycle time = 0.361 without RF  ST = (0.361)(1+0.15) = 0.415 60 min = 144.6 or 145 sandwiches 0.415 min/ sandwich


Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

rate = (145)(0.04) = $5.80

Ch 8 - 26

B กกƒ„ก  General

Training Leadership Communication Project Management Problem Solving Mathematic SPC Critical Thinking  Administrative Employment Pratices Performance- Training appraisals Management Skill Learning Curve  Technical Increases Skill

Incentive Plan Individual Based

Group / Team Based




Plans  Pay-for-Skills Plans  Bonus -Point Plans

Sharing  Financial Reward  Public Recognition


Introduction to production and operation Introduction to production and operation Introduction to production and operation Introduction to...

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