Pertemuan 1

Operations and
Productivity

Pokok Bahasan
Pendahuluan :
Mahasiswa memahami falsafah
Manajemen Operasional, fungsi operasi,
dan hubungannya dengan operasi
organisasi.

Perhitungan Produktivitas

Mahasiswa memahami masalah-masalah yang terkait

dengan manajemen operasi di dalam organisasi.

Masalah-masalah manajemen operasi:

Mahasiswa memahami perlunya mempelajari

manajemen operasi terutama bila dikaitkan dengan
fungsi lain di dalam organisasi.

Kaitan dengan fungsi lain di dalam organisasi:

Mahasiswa mampu menjelaskan arti dan cakupan

Manajemen Operasional, serta sejarah
perkembangannya.

Pengertian manajemen operasional:

Sub Bahasan dan Sasaran Belajar

Operations management

is the creation of goods and services

Production

What Is Operations Management?

is the set of activities that creates value in the

form of goods and services by transforming
inputs into outputs

Marketing
Generates
Generates demand/
gets customers

Operations
creates product or service

Finance/Accounting

1995 Corel Corp.

Transactions
Processing

1984-1994
T/Maker Co.

Security

Finance/
Accounting

Organizational Functions

Obtains funds
Tracks money

Check
Clearing

Operations

Commercial Bank

Functions - Bank

Marketing

Teller
Scheduling

Ground
Support

Facility
Maintenance

Operations

Airline

Functions - Airline

Marketing

Flight
Operations

Manufacturing

Quality
Control

Operations

Production
Control

1984-1994 T/Maker Co.

Finance/
Accounting

Catering

Purchasing

Finance/
Accounting

Functions - Manufacturer

Marketing

Manufacturing

OM is such a costly part of an organization.

We want to understand what operations

managers do.

We want (and need) to know how goods and

services are produced.

OM is one of three major functions

(marketing, finance, and operations) of any
organization.

Why Study OM?

What Operations Managers Do

Plan - Organize - Staff - Lead - Control

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9.

8.

7.

6.

5.

4.

3.

2.

1.

Maintenance

Scheduling

Inventory management

Supply-chain management

Human resources, job design

Layout design

Location

Process, capacity design

Quality management

Service, product design

Ten Critical Decisions

10.

Service and product design

Who is responsible for quality?

How do we define quality?

Quality management

The Critical Decisions

What product or service should we offer?

How should we design these products and
services?

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12

Location

What processes will these products require and

in what order?
What equipment and technology is necessary for
these processes?

Process and capacity design

The Critical Decisions - Continued

Where should we put the facility

On what criteria should we base this location
decision?

Human resources and job design

How should we arrange the facility?

How large a facility is required?

Layout design

13

The Critical Decisions - Continued

How do we provide a reasonable work

environment?
How much can we expect our employees to
produce?

14

Inventory, material requirements planning,

Should we make or buy this item?

Who are our good suppliers and how many
should we have?

Supply chain management

The Critical Decisions - Continued

How much inventory of each item should we

have?
When do we re-order?

Maintenance

Is subcontracting production a good idea?

Are we better off keeping people on the payroll
during slowdowns?

Intermediate, short term, and project

scheduling

The Critical Decisions - Continued

Who is responsible for maintenance?

When do we do maintenance?

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Where are the OM Jobs

Technology/methods
Facilities/space utilization
Strategic issues
Response time
People/team development
Customer service
Quality
Cost reduction
Inventory reduction
Productivity improvement

Where Are the OM Jobs?

18

The Heritage of
Operations Management

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Division of labor (Adam Smith 1776 and Charles Babbage 1852)

Standardized parts (Whitney 1800)
Scientific Management (Taylor 1881)
Coordinated assembly line (Ford/Sorenson/Avery 1913)
Gantt charts (Gantt 1916)
Motion study (Frank and Lillian Gilbreth 1922
Quality control (Shewhart 1924; Deming 1950)
Computer (Atanasoff 1938)
CPM/PERT (DuPont 1957)

The Heritage of Operations

Management - Continued
Material requirements planning (Orlicky 1960)
Computer aided design (CAD 1970)
Flexible manufacturing system (FMS 1975)
Baldrige Quality Awards (1980)
Computer integrated manufacturing (1990)
Globalization(1992)
Internet
(1995)

20



Eli Whitney

1995 Corel Corp.

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 & time studies

Created efficiency principles

1995 Corel Corp.

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Providing proper work methods and tools

Providing the proper training

Matching employees to right job

23

Taylor: Management Should Take

More Responsibility for

1995 Corel Corp.

Establishing legitimate incentives for

work to be accomplished

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 & 12 children!
(Book & Movie: Cheaper by
the Dozen, book: Bells on
Their Toes)

24



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!)

Make them all

alike!

1995 Corel
Corp.

Born 1900; died 1993

W. Edwards Deming

Engineer & physicist

Used statistics to analyze

process

25

Credited with teaching Japan

quality control methods in
post-WW2

His methods involve workers in

decisions

26

Information science

Physical sciences

Biological science

Management science

Industrial engineering

Human factors

Contributions From

Quality control (Shewhart, 1924)

Motion study (the Gilbreths, 1922)

Gantt charts (Gantt, 1916)

Coordinated assembly line (Ford 1913)

Scientific management (Taylor, 1881)

Standardized parts (Whitney, 1800)

Division of labor (Smith, 1776)

Significant Events in OM

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Manufacturing automation protocol (MAP)

Flexible manufacturing systems (FMS)

CAD

MRP (Orlicky, 1960)

CPM/PERT (Dupont, 1957)

Significant Events - Continued

Computer integrated manufacturing (CIM)

To

Local or national focus

Empowered
employees, teams

Mass customization

Rapid product
development,
alliances

Supply chain
partnering

Global focus
Just-in-time

New Challenges in OM

Batch shipments

From

Low bid purchasing

Job specialization

Standard products

Lengthy product
development

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Can be inventoried

Production usually
separate from
consumption

Consistent product
definition

Tangible product

Characteristics of Goods

Low customer
interaction

Intangible product

Often knowledge-based

31

1995 Corel Corp.

Often unique

Produced & consumed at

same time

High customer interaction

Frequently dispersed

Inconsistent product
definition

Characteristics of Service

1995 Corel Corp.

32

Selling is part of
service

Quality difficult to
measure

Difficult to
inventory

Reselling unusual

Service

Goods Versus Services

Can be resold

Goods

Can be inventoried
Some aspects of
quality measurable

Selling is distinct
from production

Goods
Product is
transportable
Site of facility
important for cost

Provider, not product

is transportable
Site of facility
important for
customer contact
Often difficult to
automate
Revenue generated
primarily from
intangible service.

Service

33

Goods Versus Services - Continued

Often easy to
automate
Revenue generated
primarily from
tangible product

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75
50

25

50

75
100

Percent of Product that is a Service

25

Automobile
Computer
Installed Carpeting
Fast-food Meal
Restaurant Meal
Auto Repair
Hospital Care
Advertising Agency
Investment Management
Consulting Service
Counseling

Goods Contain Services /

Services Contain Goods

100
Percent of Product that is a Good

Past

Causes

Supply-chain
partners

Just-in-time
shipments

Global Focus

Future

Changing Challenges for the

Operations Manager
Local or
national
focus
Batch (large)
shipments

Lengthy
product
development

Low-bid
purchasing

Low-cost, reliable worldwide

communication and
transportation networks
Cost of capital puts pressure on
reducing investment in
inventory
Quality emphasis requires that
suppliers be engaged in product
improvement
Shorter life cycles, rapid
international communication,
computer-aided design, and
international collaboration

Rapid product
development,
alliances,
collaborative
designs

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P ast

C au ses
M ass
cu sto m izatio n

Fu ture

Changing Challenges for the

Operations Manager
S tan d ard ized
p ro d u cts
Jo b
sp ecializatio n

E n viro n m en tal issu es, IS O 14000,

in creasin g d isp o sal co sts

A fflu en ce an d w o rld w id e m arkets;

in creasin g ly flexib le p ro d u ctio n
p ro cesses
C h an g in g so cio cu ltu ral m ilieu .
In creasin g ly a kn o w led g e an d
in fo rm atio n so ciety.

L o w co st
fo cu s

Process

Outputs

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E m p o w ered
em p lo yees,
team s, an d lean
p ro d u ctio n
E n viro n m en tally
sen sitive
p ro d u ctio n ,
G reen
m an u factu rin g ,
recycled
m aterials,
rem an u factu rin g

Inputs

Goods and
Services

The Economic System

Transforms Inputs to Outputs

Land, Labor,
Capital,
Management

The economic system

transforms inputs to outputs
at about an annual 2.5%
increase in productivity
(capital 38% of 2.5%), labor
(10% of 2.5%), management
(52% of 2.5%)
Feedback loop

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Year B

Cost per unit decreased

$2.25
$2.00
$1.75
$1.50
Year A

Year C

Costs were pared

Typical Impact of Quality

Improvement

Parts per man hour

Year B

Year C

As productivity improved

115
110
105
100
95
Year A

Wages increased

Year A

Year B

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Year C

Average worker's annual cash

compensation increased

27000
26000
25000
24000

Measure of process improvement

Productivity

Units produced
Input used

Represents output relative to input

Productivity

Only through productivity increases can our

standard of living improve

40

Multi-Product Productivity
Productivity
Output
Labor + material + energy + capital + miscellaneous

Precise units of measure may be lacking

External elements may cause an increase or

decrease in productivity

Quality may change while the quantity of

inputs and outputs remains constant

Measurement Problems

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Capital - contributes about 32% of the annual

increase

Labor - contributes about 10% of the annual

increase

Productivity Variables

Management - contributes about 52% of the

annual increase

Key Variables for Improved

Labor Productivity

Diet of the labor force

Social overhead that makes labor available

Basic education appropriate for the labor

force

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Maintaining and enhancing skills in the midst

of rapidly changing technology and knowledge

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Frequently individually processed

Typically labor intensive

Service Productivity

Often difficult to mechanize

Often difficult to evaluate for quality

Often an intellectual task performed by

professionals

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