Ch2: Triple Bottom Line: Econ. prosperity (sharehold.), environ. stewardship(environment), soc. respons(labor, community).

Operations and supply strategy: Part of a planning process that coordinates operational goals with those of the larger organization. Op. effectiveness relates to the core bus. processes needed to run the bus. Closed loop strategy proc.: Develop/Refine strategy (yearly)-vision, mission, strateg. analy, strat. initia. Translate Stratn(1/4).-overall strat. is refined and updated. Plan oper. & Supply (1/12) coordinate oper. plans that relate to functional areas such as mktg, manuf. Tradeoffs-$ vs. Q or flexibility vs delivery. Order qualifiers-basic criteria products to be consid. for purchase by cust. Winners-different. the products and services between firms.Productivity measures- Partial Meas.- output/labor or materials or capital or energy. CH5 process-any part of an org. takes input and transf. to output. Cycle time-avg. succ. time between complet. of succ. units. Utilization-ratio of the time a resource is activated relative to the time it is available for use.Process flowcharting- use of a diag. to present the major elements of a process. tasks or ops , flows of mater. or customers , decision pts , & storage areas or queues . Buffer- storage area, placed prior to be used in a downstream stage Blocking- activities in a stage must stop, no storage Starvingactivities in a stage stop, no work Bottleneck-stage that limits the capacity of process. Serial flow-single path for all stages of production Parallel process- some of production has alternative paths where 2 or machines are used to capacity. Logistics process movement of things (materials, fin. goods, people).Measuring process performance: operation time = Set up time + Run Time Flow time=avg. time for a unit to move through the system Velocity=flow time / value added time Throughput rate=1/cycle time Efficiency= actual output/standard output Product. = output/input Utilization= time activated/time available. Pprocess Mapping & Littles Law: Total avg. value of Inventory= sum of the value of raw materials, WIP and FG inv. Inventory turns=COGS / avg. inv. value. Days of supply= Inverse of inv. turns scaled to days Littles Law= long term relationship between inv, throughput and flow time. Inventory=Throughput rate X flow time. 200 cars per 8 hr shift = 25 cars/hr. Use 1 battery/car, our TR for batteries is 25/hr. FT is 12hr so the WIP is 25 batteries/hr X 12hr = 8,300 batteries. There are 8000 batteries in raw material inv. so the tot. # batteries in pipeline on avg. is TI=8000+300=8300 batteries. Batteries are worth 8,300X$45=$373,500. Days of supply in raw material inv. is the FT for a battery in raw material inv. here we use LL formula = FT=I/T = 8000 batteries / 200 batteries per day=40days which represents a 40-day supply of inv. Process Flow time reduction.-Perform activities. in parallel, Change seq. of activities, reduce interruptions, split the task, use a more skilled worker, overtime. Output/day is determined by the slowest station. CH6 .. Lead time- time needed to resp. to a cust. order. Cust. order decoup. pt. inv. is positioned to allow entities in supply chain to operate independently. Make to stock television, Assemb. to order- Dell comp. (altern. components) Make to order-Boeing process for making aircrafy Project-product remains in a fixed location high degree or task ordering, develop. by arrang. mater. accord. to assemb. priority. Workcenter(jobshop)-similar equip. or functions are grouped together (departments. optimize movement of material) Manuf. cell- dedicated area where similar products in processing req. are produced. group parts into families, common seq. of steps, machines and assoc. process are physically regrouped into cells. Assemb linework processes are arranged accord. to progressive steps by which the product is made Continuous Process-assembly line with continuous flow (liquids).Prod. Standardization= Low vol.=low standardization, High stand=High vol. BEP =P (selling $) Q (quantity) F (fix. cost) V (var. cost). Tot. Rev. = PxQ, TC = F+V (Q)]and TR=TQ so P X Q=[F+V (Q)]. Contribution Margin = Q=F/(P-V). Ex.. Purchase: TC =$200xQ, Produce using lathe: TC=$80,000 +$75Q, Prod. using MCenter: TC = $200,000 + $15Q. Point A $80,000+$75Q=$200,000+$15Q$80,000+$60Q=$200,000 $60Q=$120,000 Q=$120,000/$60=2,000 Point B $200(Q) =$80,000 +$75(Q)$125Q =$80,000 Q=$80,000/$125=640. Manuf. process flow design- eval. specific process that material follow as they move through plant. Focus on identification of activities that can be minimized or eliminated-movement and storage, the fewer the moves, delays and storage the better the flow.CH6A..Cycle time (C)=production time per day/required output per day (units) theoretical min. # workstations(N)= Sum of task times (T)/Cycle Time (C). Efficiency=T/# of workstations*C. EX=500 wagons/day req. Prod. time/day is 420 min. (1) draw prentice diag. (2) have to convert to sec. cuz task times are in sec. C=prod. time per day / output per day=60sec. * 420 min. /500 wagons=25,200/500 =50.4 (3) Determine theoretical min. # of workstations N=T/C = 195 sec./50.4sec. =3.87 (4 rounded up). (4) Select assing rules prioritize tasks in order of larg. # of following tasks. Then priorize tasks in order of longest task time. (5) Make task assignments to form Workstaion 1,2,(6) Effec calculation= T/N*C=195/(5)(50.4)=.77 or 77%. Splitting tasks-Assembly line contains task times in sec. = 40,30,15,25,20,18,15 the line runs for 7 hours/dayand demand for output is 750/day. The C required to produce 750/day is 36 sec. ([7 hours * 60min.*60sec.]/750]. Our problem is that we have 1 task that takes 40sec. How do we deal with this task (accommodate 40sec task in a 36sec. (C). (see proc. flow time red above). Overtime calc = Producing at a rate of 1 every 40sec would create 675/day, 75 short of needed 750. The amount of overtime req. to produce the additional 75 is 50min [(75x40sec)/60sec]. U-line and flexible shaped layouts can help resolve the imbalance. Mixed model line balancing-scheduling several different models to be produced over a given day or week on the same line in a cyclical fashion. Process times: 6min per J and 4 min per K. The day consists of 480min (8hr*60min). Equal numbers of J&K are to be produced J=K, produce 48J and 48K per day or 6J and 6K/hour so 6J + 4K =480. Ex. of balanced of J&K frames rw1 model seq. rw2 Op JJ KKK JJ JJ KKK time. rw3 minicycle time. Total (C) =60. The line is bal. at 6 frames of each type/hr with a minicycle time of 12min. Another bal. is JKKJKJ with times 6,4,4,6,4,6. This bal. produces 3J & 3K every 30min w/ a minicycle time of 10min (JK, KJ, KJ) Manuf. cells=bette human 66 444 66 66 444 relations, improved operator expertise, less in-process inv. and material handling, faster prod. setup. retail service layout- maximize 12 12 12 12 12 net profit per sq ft. servicescapes=physical surroundings which service takes place=ambient conditions, spatial layout and functionality, and signs,symbols, and artifacts. ambient=bkgrnd. charact. =noise level, music, lighting, temp and scent. Many are influenced by design of building (placement of lights, acoustic tiles, fans), layout can also have effect (near food prep. will smell like food). spatial layout and funct.= planning circ. path of customers and group. the merchant. Cir. path of cust. exposes them to as much merch. as possible.Group merch on the shoppers view of related items, as opposed to physcl charact. Signs, symbols, artifacts= parts of the service have social significance.-charac. of design of build although with orientation, location and size of objects can carry spec. meaning tiled areas indicate aisles for travel whiel carpeted ares indicate depts. for browsing. Bank loan officers easily identified cuz desks were raised on platform. Office layout= open offices with personal work spaces separated by lower divider walls. Signs, symbols, artifacts are more important in office layout than in retailing. Central admin. offices are designed to convey desired img of co. Marks of good layout for manuf. and back-office ops-straight line flow pattern, backtracking kept to min., prod. time predictable, little intersage storage of mat., open plant floors, bottleneck ops under control, close workstations, ordely handling of materials, no unnecessary rehandling, easly adjust to changing conditions. Marks of a good layout for face-face= easily understood service flow pattern, adeq. waiting fac., easy comm. with cust, easy maintain cust. surveill., clear exit and entry pts, minim walking and material movement, lack of clutter, high sales vol/sqft of facility.EX.= office has 4 rooms, Room A, B, C, D. office is 80ft L & 20ft W. Each rm is 20x20ft. Present location of rooms is A,B,C,D-straight line. Load summary shows # of contacts each adviser in a room has with other advisors in other rooms. Assume all advisors are equal in value. Load summary= AB=10, AC=20,AD=30 BC=15,BD=10, CD=20. Eval. layout acc. to mat. handl.cost method . Obtain the following costs-AB=10*1, AC=20*2=40,AD=30*3=90,BC=15*1=15, BD=10*2=20, CD=20*1=20. Current cost=195. Better layout would be B_C_D_A AB=10*3=30, AC=20*2=40, AD=30*1=30, BC=15*1=15,BD=10*2=20,CD=20*1=20 Improved cost =155. CH7.. high deg. cust. contact- more diff. to control and rationalize. cust. can affect the time of demand, exact nature of service, quality or perceived quality of service because of involvement. Must meet demand as it arises,. Service-system design matrix- buffered core-physically separated from cust., permeable system-penetrable by cust via phone or f2f contact, reactive system- both penetrable and reactive to custs. requirements. L side of matrix what we belive to be logical marketing proposition, contact=sales opp. the Rside sows impact on prod. efficiency as cust. exerts more influence on the operation. Prod. effeciencyas customer has more contact (influence) on system.service blueprint= makes a distinction btwn the part of activity customer sees and does not.(made with a line of visibility on the flowchart). Poka-yokes= procedures that block inevitable mistake from becoming service defect.-common in factories, Warning methods, Physical or visual contact methods, Three T=Task to be done, Treatment accorded to the customer,Tangible features of the service. Prod. line=mcdonalds, self service- ATM, personal att.=Ritz Carlton. variability-arrival-not enough serv. prov., request-room w/a view, capability-not able to explain to dr., effort- not putting up carts, subjective-interpreting service action differently. Critical to quality: attributes most important to the customer Defect: failing to deliver what customer wants Process capability: what your process can deliver Variation: what customer sees and feels Stable ops: ensuring consistent, predictable processes to improve what the customer sees and feels Design for six-sigma: designing to meet customer needs and process capability.TQM=Careful design of the product or service, Ensuring that the orgs systems can consistently produce the design.DPMO=(# of defects/#of opportunits of error per unit*# of units)*1,000,000. DMAIC=define, measure, analyze, improve, control.flowchart-process steps as part of process run chart-trends in data over time (define stage) pareto chart-break down problem into relative contributions of components(lg%of pbl are due to sm% of cause) checksheet- help standardize data collection (histogram) cause & effect diagram- fishbone diagram hypothesized relationships between potential cause and prblm under study Opportunity flow diagram-separate value added from non value added steps in process control charts- time sequenced showing plotted values of statistic centerline avg and one or more control limits. FMEA-failure mode and effect analysis-identify estimate prioritize evvalueate rist of pot. failures at each stage of process DOE-multivirate testing statistical methodology determing the cause&effect relationship btwn process variables X and output variable Y. (simultaneous experiments with variables). ISO9000-8QM principles-cust. focus, leadership, involvement of people, process approach,system approach to mgmt, continual improvement, factual approach to decision mkg, mutually beneficial supplier relationships. Benchmarking-identify processes needing improvement, analyze data outside of org to indust competitors.