2008 Prentice Hall, Inc.

10 1
Operations
Management
Chapter 10
Human Resources
and J ob Design
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
2008 Prentice Hall, Inc. 10 2
Rusty Wallaces NASCAR
Racing Team
NASCAR racing became very
popular in the 1990s with huge
sponsorship and prize money
High performance pit crews are a
key element of a successful race
team
Pit crew members can earn
$100,000 per year for changing
tires!
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Rusty Wallaces NASCAR
Racing Team
Each position has very specific
work standards
Pit crews are highly organized
and go though rigorous physical
training
Pit stops are videotaped to look
for improvements
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Human Resource Strategy
The objective of a human resource
strategy is to manage labor and
design jobs so people are effectively
and efficiently utilized
1. People should be effectively utilized
within the constraints of other
operations management decisions
2. People should have a reasonable quality
of work life in an atmosphere of mutual
commitment and trust
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Constraints on Human
Resource Strategy
Figure 10.1
HUMAN
RESOURCE
STRATEGY
Product strategy
Skills needed
Talents needed
Materials used
Safety
Schedules
Time of day
Time of year
(seasonal)
Stability of
schedules
When
Location strategy
Climate
Temperature
Noise
Light
Air quality
Process strategy
Technology
Machinery and
equipment used
Safety
Individual differences
Strength and
fatigue
Information
processing and
response
Who
Layout strategy
Fixed position
Process
Assembly line
Work cell
Product
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Labor Planning
1. Follow demand exactly
Matches direct labor costs to
production
Incurs costs in hiring and
termination, unemployment
insurance, and premium wages
Labor is treated as a variable cost
Employment Stability Policies
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Labor Planning
2. Hold employment constant
Maintains trained workforce
Minimizes hiring, termination, and
unemployment costs
Employees may be underutilized
during slack periods
Labor is treated as a fixed cost
Employment Stability Policies
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Work Schedules
Standard work schedule
Five eight-hour days
Flex-time
Allows employees, within limits, to
determine their own schedules
Flexible work week
Fewer but longer days: light-assembly
plants
Part-time
Fewer, possibly irregular, hours:
restaurants
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J ob Classification and
Work Rules
Specify who can do what
Specify when they can do it
Specify under what conditions they
can do it
Often result of union contracts
Restricts flexibility in assignments
and consequently efficiency of
production
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J ob Design
Specifying the tasks that constitute
a job for an individual or a group
1. J ob specialization
2. J ob expansion
3. Psychological components
4. Self-directed teams
5. Motivation and incentive systems
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Labor Specialization
The division of labor into unique tasks
Example of job: assembly line
First suggested by Adam Smith in 1776
1. Development of dexterity and faster
learning: repetition
2. Less loss of time: wouldnt changing jobs
3. Development of specialized tools
Later Charles Babbage (1832) added
another consideration
4. Wages exactly fit the required skill
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J ob Expansion
Adding more variety to jobs
Intended to reduce boredom associated
with labor specialization
J ob enlargement: add tasks with similar
skills to an existing job
J ob rotation: move from one specialized job
to another
J ob enrichment: adds planning and control
to the job
Employee empowerment: employees accept
responsibility for a variety of decision
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J ob Enlargement and J ob
Enrichment
Figure 10.2
Task #3
(Lock printed circuit
board into fixture for
next operation)
Present job
(Manually insert and
solder six resistors)
Task #2
(Adhere labels
to printed
circuit board)
Enlarged job
Enriched job
Planning
(Participate in a cross-
function quality
improvement team)
Control
(Test circuits after
assembly)
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Psychological Components of J ob Design
Human resource strategy requires consideration of the psychological
components of job design
Hawthorne Studies
Introduced psychology into the workplace
The workplace social system and distinct roles played by
individuals may be more important than physical factors
Individual differences may be dominant in what an
employee expects for the job and what the employee thinks
her of his contribution to the job should be
Hires people with enthusiasm and empower to excel
fewer complaints and higher profits
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J ob Design Continuum
Specialization
Enlargement
Self-directed
teams
Empowerment
Enrichment
Figure 10.3
J ob expansion
Increasing
reliance on
employees
contribution
and
increasing
responsibility
accepted by
employee
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Self-Directed Teams
Group of empowered individuals
working together to reach a
common goal
May be organized for long-term or
short-term objectives
Effective because
Provide employee empowerment
Ensure core job characteristics
Meet individual psychological needs
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Self-Directed Teams
Ensure those who have legitimate
contributions are on the team
Provide management support
Ensure the necessary training
Endorse clear objectives and goals
Financial and non-financial rewards
Supervisors must release control
To maximize effectiveness, managers should
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Benefits of Teams and
Expanded J ob Designs
Improved quality of work life
Improved job satisfaction
Increased motivation
Allows employees to accept more
responsibility
Improved productivity and quality
Reduced turnover and absenteeism
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Motivation and Incentive
Systems
Bonuses - cash or stock options
Profit-sharing - profits for distribution to
employees
Gain sharing - rewards for improvements
Incentive plans - typically based on
production rates
Knowledge-based systems - reward for
knowledge or skills
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Ergonomics and the Work
Environment
Ergonomics is the study of the
interface between man and
machine
Often called
human factors

Understanding ergonomics
issues helps to improve
human performance
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J ob Design and Keyboards
Figure 10.4
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Methods Analysis
Focuses on how task is performed
Used to analyze
1. Movement of individuals or material
Flow diagrams and process charts
2. Activities of human and machine and
crew activity
Activity charts
3. Body movement
Micro-motion charts
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Flow Diagram
Storage bins
Machine 1
Mach. 2
Mach. 3 Mach. 4
From
press
mach.
Paint
shop
Welding
Figure 10.5 (a)
Old Method
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Storage
bins
Machine 1
Machine 2
Machine 3
Machine 4
From
press
mach.
Paint
shop
Welding
Flow Diagram
Figure 10.5 (b)
New method: improved work flow and less storage and
space
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Process Chart
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Activity Chart
Figure 10.6
Two-person Crew doing an Oil Change in 12 minutes at
Quick Car Lube
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Operation Chart
Figure 10.7
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The Visual Workplace
Use low-cost visual devices to
share information quickly and
accurately
Displays and graphs replace
printouts and paperwork
Able to provide timely information
in a dynamic environment
System should focus on
improvement
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The Visual Workplace
Present the big picture
Performance
Housekeeping
Visual signals can take many forms
and serve many functions
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The Visual Workplace
Visual utensil holder
encourages
housekeeping
A 3-minute service
clock reminds employees
of the goal
Figure 10.8
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The Visual Workplace
Visual signals at the
machine notify
support personnel
Visual kanbans reduce
inventory and foster J IT
Andon
Line/machine
stoppage
Parts/
maintenance
needed
All systems go
Part A Part B Part C
Reorder
point
Figure 10.8
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The Visual Workplace
Quantities in bins indicate
ongoing daily requirements
and clipboards provide
information on schedule
changes
Process specifications and
operating procedures are
posted in each work area
Figure 10.8
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Labor Standards
Effective manpower planning is
dependent on a knowledge of the
labor required
Labor standards are the amount of
time required to perform a job or
part of a job
Accurate labor standards help
determine labor requirements,
costs, and fair work
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Timing a sample of a workers performance and using
it to set a standard
A trained and experienced person can establish a
standard with eight steps:
1. Define the task to be studied
2. Divide the task into precise elements
3. Decide how many times to measure the task
4. Time and record elemental times and ratings of
performance
5. Compute the average observed (actual) time
Average observed time =
(Sum of the times recorded to perform each element)
Number of observation

Time Studies
Equation 10-1
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6. Determine performance rating (work pace) and
then compute the normal time for each element
Normal time =
(Average observed time) X (Performance rating factor)
7. Add the normal times for each element to develop
a total normal time for the task
8. Compute the standard time for allowances such as
personal needs, unavoidable work delays, and worker
fatigue
Standard time = Total normal time
1-Allowance factor
Time Studies
Equation 10-2
Equation 10-3
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The time study of a work operation at a Red Lobster
restaurant yielded an average observed time of 4.0
minutes. The analysts rate the observed worker at
85%. This means the worker performed at 85% of
normal when the study was made. The firm uses a
13% allowance factor. Red Lobster wants to
compute the normal time and standard time for this
operation.
The firm needs to apply Equations (10-2) and (10-3)
Time Studies Example 1
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Solution:
Average observed time = 4.0 min
Normal time = (Average observed time) X (Performance rating factor)
= (4.0) X (.85)
= 3.4 min
Standard time = Normal time = 3.4
1 Allowance factor 1 - .13
= 3.90 min
Because the observed worker rated at 85% (slower than average), the
normal time is less than the workers 4.0 minute average time.
Time Studies Example 1
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no 1

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Management Science Associates promotes its management
development seminars by mailing thousands of individually
composed and typed letters to various firms. A time study
has been conducted on the task of preparing letters for
mailing. On the basis of the following observations,
Management Science Associates wants to develop a time
standard for this task. The firms personal, delay, and fatigue
allowance factor is 15%.
Time Studies Example 2
Job Element Observation (minutes) Performance
rating
1 2 3 4 5
(A) Compose and type letter 8 10 9 21* 11 120%
(B) Type envelope address 2 3 2 1 3 105%
(C) Stuff, stamp, seal, and sort
envelopes
2 1 5* 2 1 110%
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Approach: once data have been collected, the
procedure is to:
1. Delete unusual or nonrecurring observations
2. Compute the average time for each element, using
equation (10-1)
3. Compute the normal time for each element, using
equation (10-2)
4. Find the total normal time
5. Compute the standard time, using equation (10-3)
Time Studies Example 2
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Solution:
1.Delete observations such as those marked with an
asterik (*). These may be due to business
interruptions, etc; they are not part of the job
element,but may be personal or delay time.
2. Average time for each job element:
Average time for A = 8+10+9+11 = 9.5 min
4
Average time for B = 2+3+2+1+3 = 2.2 min
5
Average time for C = 2+1+2+1 = 1.5 min
4
Time Studies Example 2
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3. Normal time for each job element:
Normal time for A = (Average observed time) X (Performance rating)
= (9.5)(1.2)
= 11.4 min
Normal time for B = (2.2)(1.05)
= 2.31 min
Normal time for C = (1.5)(1.1)
= 1.65 min
Note: Normal times are computed for each element because the
performance rating factor (work pace) may vary for each element, as it
did in this case
Time Studies Example 2
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4. Add the normal times for each element to find the total
normal time (the normal time for the whole job)
Total normal time = 11.40 + 2.31 + 1.65
= 15.36 min
5. Standard time for the job:
Standard time = Normal time = 15.36
1 Allowance factor 1 - .15
= 18.07 min
Thus, 18.07 minutes is the time standard for this job.

Time Studies Example 2
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no 2