Documente Academic
Documente Profesional
Documente Cultură
Operations Management
Second Canadian Edition
Slides adapted by Michael Zhang
Chapter 1
Operations and
Productivity
Table 1.1
Copyright © 2017 Pearson Canada Inc.
What Operations
Managers Do
Basic Management Functions
Planning
Organizing
Staffing
Leading
Controlling
ADM 3301 ~ Rim Jaber 19
Ten Critical Decisions
Ten Decision Areas Chapter(s)
Design of goods and services 5
Managing quality 6, 6 Supplement
Process and capacity 7, 7 Supplement
design
Location strategy 8
Layout strategy 9
Human resources and 10, 10 Supplement
job design
Supply-chain 11, 11 Supplement
management
Inventory management, 12, 14, 16
MRP, JIT
Scheduling 13, 15 Table 1.2
Maintenance ADM 3301 ~ Rim Jaber
17 20
Ten Critical Decisions
Ten Decision Areas Chapter(s)
Design of goods and services 5
Managing quality 6, 6 Supplement
Process and capacity 7, 7 Supplement
design
Location strategy 8
Layout strategy 9
Human resources and 10, 10 Supplement
job design
Supply-chain 11, 11 Supplement
management
Inventory management, 12, 14, 16
MRP, JIT
Scheduling 13, 15 Table 1.2
Maintenance ADM 3301 ~ Rim Jaber
17 21
The Critical Decisions
Design of goods and services
What good or service should we offer?
How should we design these products and
services?
Managing quality
How do we define quality?
Who is responsible for quality?
Figure 1.3
Copyright © 2017 Pearson
Canada Inc.
Certifications
Figure 1.3
ADM 3301 ~ Rim Jaber 31
SIGNIFICANT EVENTS IN OM
The Industrial Revolution:
– 1776: Division of Labor (Adam Smith)
– 1800: Standardized Parts (Eli Whitney)
Scientific Management:
– 1881: Scientific Management (Frederick Taylor)
– 1913: Coordinated Assembly Line (Henri Ford)
Industrial Psychology:
– 1922: Motion Study (Frank & Lillian Gilberth)
– 1933: Effect of Environment on Employee Productivity
and Motivation (Elton Mayo)
ADM 3301 ~ Rim Jaber 32
SIGNIFICANT EVENTS IN OM
Decision Models and Management Science:
– 1916: Gantt Charts (Henry Gantt)
– 1917: Inventory Control (F.W. Harris)
– 1924: Quality Control (Walter Shewhart)
– 1934: Sampling Techniques (L.H.C. Tippet)
– 1940: Operations Research (in England)
– 1947: Linear Programming (Dantzig)
– 1950: Quality Control ( Edwards Deming)
– 1950-1960: Simulation, Queueing Theory, Decision Theory,
Mathematical Programming, Program Evaluation and Review
Technique (PERT), Critical Path Method (CPM), Materials
Requirements Planning (MRP) 33
SIGNIFICANT EVENTS IN OM
– 1970-1980: Software for Inventory Control, Scheduling,
Forecasting
– 1980-1990: Just in Time (JIT), Total Quality Management
(TQM), Computer Integrated Manufacturing (CIM),
Flexible Manufacturing Systems (FMS), Computer Aided
Design (CAD), Computer Aided Manufacturing (CAM),
Manufacturing Automation Protocol (MAP), robotics
– 1992: Globalization
– 1995: Internet
– 2000: Smart systems
Future based upon:
management science/ information science/ business analyatics
ADM 3301 ~ Rim Jaber 34
Eli Whitney
Born 1765; died 1825
In 1798, received government contract
to make 10,000 muskets
Showed that machine tools could make
standardized parts to exact
specifications
Musket parts could be used in any
musket
Frederick W. Taylor
Born 1856; died 1915
Known as ‘father of scientific
management’
In 1881, as chief engineer for Midvale
Steel, studied how tasks were done
Began first motion and time studies
Created efficiency principles
Taylor’s Principles
Management Should Take More
Responsibility for:
• Matching employees to right job
• Providing the proper training
• Providing proper work methods and tools
• Establishing legitimate incentives for work to
be accomplished
Henry Ford
Born 1863; died 1947
In 1903, created Ford Motor Company
In 1913, first used moving assembly line
to make Model T
Unfinished product moved by conveyor
past work station
Paid workers very well for 1911
($5/day!)
Frank & Lillian Gilbreth
Frank (1868-1924); Lillian (1878-1972)
Husband-and-wife engineering team
Further developed work measurement
methods
Applied efficiency methods to their home
and 12 children!
Book & Movie: “Cheaper by the Dozen,”
“Bells on Their Toes”
W. Edwards Deming
Born 1900; died 1993
Engineer and physicist
Credited with teaching Japan quality
control methods in post-WW2
Used statistics to analyze process
His methods involve workers in
decisions
Other Historical Disciplines
Impacting OM
Industrial Engineering
Management Science (operations research)
Statistics and Economics
Physical Sciences (new materials/technology)
Information Technology (computer-aided
design, enterprise resource planning,
computer integrated manufacturing)
Flexible manufacturing system
Globalization
Internet
Japan
Russian Fed
Hong Kong
UK
France
Spain
Canada
China
South Africa
Mexico
US
Australia
Table 1.3
Copyright © 2017 Pearson Canada Inc.
Organizations in Each Sector
Service-
Producing % of all
Sector Example Jobs
Business, Edmonton Waste Management 4
Building, Other Centre; Carlson Wagonlit Travel
support services
Educational McGill University 7
services
Information, Calgary Flames, Princess of 5
Culture, Wales Theatre
Recreation
Accommodation, Tim Horton’s, Royal York Hotel 6
Food services
Table 1.3
Copyright © 2017 Pearson Canada Inc.
Organizations in Each Sector
% of all
Other Sectors Example Jobs
Manufacturing Magna International inc. 10
sector
Construction PCL Construction Mgmnt. 7
sector
Agriculture, Farming Operations; Canadian 5
Forestry, Mining, Mining Company; Dome Pacific
Oil and gas, Logging Ltd.; Ontario Power
Utilities Generation
Other Services, Joe’s Barber Shop,; ABC 10
Public Landscaping; Province of
administration Manitoba
Table 1.3
Copyright © 2017 Pearson Canada Inc.
Exciting New Challenges in Operations
Management
Important Note!
Production is a measure of output
only and not a measure of efficiency
ADM 3301 ~ Rim Jaber 63
The Economic System
Transforms Inputs to Outputs
Inputs Process Outputs
Land, Labor, •The Canadian economic system Goods and
transforms inputs to outputs at
Capital, Services
about an annual 2.2% increase in
Management productivity per year. The
productivity increase is the result
of a mix of capital (38% of 2.2%),
labour (10% of 2.2%), and
management (52% of 2.2%).
Feedback loop
Figure 1.6
ADM 3301 ~ Rim Jaber 64
Improving Productivity at
Starbucks
A team of 10 analysts
continually look for ways to
save time. Some
improvements:
Stop requiring signatures Saved 8 seconds
on credit card purchases per transaction
under $25
Change the size of the ice Saved 14 seconds
scoop per drink
New espresso machines Saved 12 seconds
per shot
Improving Productivity at
Starbucks
A team of 10 analysts
continually look for ways to
shave time. Some
improvements:
Operations improvements have helped
Stop requiring signatures
Starbucks increaseSaved
yearly8revenue
seconds per
on credit card purchases
outlet by $200,000per transaction
to $940,000 in six
under $25 years.
Change the sizeProductivity
of the ice has improved
Saved 14by 27%, or
seconds
scoop about 4.5% per year.
per drink
New espresso machines Saved 12 seconds
per shot
Productivity
Units produced
Productivity =
Input used
Labor Productivity
Units produced
Productivity =
Labor-hours used
1,000
= = 4 units/labor-hour
250
One resource input single-factor productivity
ADM 3301 ~ Rim Jaber 68
Multi-Factor Productivity
Output
Productivity =
Labor + Material + Energy
+ Capital + Miscellaneous
Also known as total factor productivity
Output and inputs are often expressed
in dollars
Multiple resource inputs multi-factor productivity
ADM 3301 ~ Rim Jaber 69
Collins Title Productivity
Old System:
Staff of 4 works 8 hrs/day 8 titles/day
Payroll cost = $640/day Overhead = $400/day