Chapter 7

Managing
Operations and
Improving Quality

PowerPoint Presentation by Charlie Cook

Copyright 2005 Prentice Hall, Inc.
All rights reserved.
 There are many ways of
going forward, but only one
way of standing still.
Franklin D. Roosevelt

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 Key Topics
Operations and the utility provided by operations
processes
Service operations vs. goods production
Operations planning
Total quality management tools
The supply chain strategy vs. traditional
strategies for coordinating operations

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 Defining Operations
Service Operations:
Produce tangible and
intangible services.
Goods Production:
Produces tangible
products.

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 Growth in the Goods and Services
Sectors
Millions of Workers

100 (Billions)

Services
80 Services
$4,000

60
$3,000

40
$2,000

20
Goods Production $1,000 Goods
Production
1996

2000
1998

1990

1996
1994

1984

1986

1988

1998

2000
1984

1988

1992
1986

1990

1992

1994
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 Integration of Global Operations

Technology has pushed operations to

become cleaner, faster, and saferon a
global scale.
The internet has integrated
production with global
suppliers and customers.

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 Products and Services Create Utility
To Satisfy Human Wants
Time Utility
Place Utility
Ownership utility
Form Utility

Operations managers create utility

for customers through production,
inventory, and quality control.
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 Operations Management: A Resource
Transformation Process
Operations Managers
plan schedule
organize control

Inputs Transformation Outputs

land Activities (Goods and
capital Services)
human resources
material
customers
information

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 Operations Processes Are Methods
Used in Production

Goods-Manufacturing:
Analytic processes
Synthetic processes
Service Delivery
High contact processes
Low contact processes

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 Service Operations Differ Markedly From
Manufacturing
Focus on:
Performance
Process and outcome
Service characteristics
Customer-service link
Service quality considerations

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 Operations Planning

Capacity

Location Quality

Layout
Process
Product
Methods
Cellular

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 Operations Scheduling
Scheduling Goods Operations
Scheduling Service Operations

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 Operations Control Monitors Results,
Which Ensures Performance
Materials managers plan, organize, and
control the flow of materials from design
through distribution.

Transportation
Warehousing
Purchasing
Supplier Selection
Inventory Control
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 Tools for Operations Process Control

Worker Training

Just-in-time Production Systems (JIT)

Material Requirements Planning

Quality Control
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 Total Quality Management
Always Delivering
High Quality
Planning for quality
Organizing for quality
Directing for quality
Controlling for quality

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 Tools for Total Quality Management

Statistical
Quality/Cost
Process ISO 9000
Studies
Control

Getting Close
Process
to the Outsourcing
Reengineering
Customer

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 Adding Value Through Supply Chains

Grain Grain Flour Bakery Packaged Baked Goods

Wood Pulp Paper Packager

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 The Supply Chain Strategy
Supply Chain Management
Working with the supply chain as a whole to improve overall
flow.

Supply Chain Reengineering

Improving the process for better results.

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 Chapter Review
Explain operations and the utility that operations
processes provide.
Distinguish service operations from goods
production.
Describe the five decision areas involved in
operations planning.
Identify the key tools for total quality management.
Explain the supply chain strategy.

Copyright 2005 Prentice Hall, Inc. All rights reserved. 719