Professional Documents
Culture Documents
Management Science
is the study and development of techniques for the formulation and analysis of management and related business problems. Operations research models are often helpful in this process.
Operations Research
is the application of techniques developed in mathematics, statistics, engineering and the physical sciences to the solution of problems in business, government, industry, economics and the social sciences.
Quantitative Methods
employ mathematical models to reach a wide variety of business decisions.
They give modern managers a competitive edge Managers do not need to have great mathematical skills Familiarity allows one to:
Ask the right questions Recognize when additional analysis is necessary Evaluate potential solutions Make informed decisions
Qualitative Methods
like more traditional methods, however, qualitative methods come in many varieties. Different researchers focus on different sources of data:
One's own immediate experience Others' experiences, which we might seek to understand through:
their speech or writing, their other behaviors, their products - technology, artwork, footprints, etc.
What is POM?
Production is the creation of goods and services Production and/or Operations Management are the activities that transform resources into goods and services
Marketing generates demand Operations creates the product Finance/accounting tracks organizational performance, pays bills, collects money
It shows us how goods and services are produced It shows us what POM managers do It is the most costly part of any organization
POM Materials
79%
40%
38%
42%
Labor
Fringes Total
8 3 90
9 1
15 22 77
15 8
20 16 74
22 4
12 23 77
20 3
5%
3% 1%
14%
aaaaaaaa
26%
16% 18%
Jobs in POM
Less than 20% of all jobs are in manufacturing (and they are declining) Almost 80% of jobs are in the service sector (and they are increasing) Nearly half of all jobs are in POM Most POM jobs are professional and/or managerial
Forecasting Service, product design.. Quality management Process, capacity design... Location ... Layout design . Human resources, job design.. Supply-chain management Inventory management . Scheduling .. Maintenance ...
Ch. 4 Ch. 5 Ch. 6, 6S Ch. 7, 7S Ch. 8 Ch. 9 Ch. 10, 10S Ch. 11, 11s Ch. 12, 14, 16 Ch. 3, 13, 15 Ch. 17
management
What product or service should we offer? How should we design these products and services?
What processes will these products require and in what order? What equipment and technology is necessary for these processes?
Location
Where should we put the facility On what criteria should we base this location decision?
design
How do we provide a reasonable work environment? How much can we expect our employees to produce?
chain management
Should we make or buy this item? Who are our good suppliers and how many should we have?
Inventory,
material requirements
planning,
How much inventory of each item should we have? When do we re-order?
scheduling
Is subcontracting production a good idea? Are we better off keeping people on the payroll during slowdowns?
Maintenance
Division of labor (Adam Smith, The Wealth of Nations, 1776) Industrial Revolution Standardization of parts (Eli Whitney, 1765 1825)
Some doubt about true interchangeability Simeon North (Middletown) John Hall (Harpers Ferry)
Match employees to jobs Provide the proper training Provide the proper methods and tools Establish legitimate incentives
Coordinated assembly line (Henry Ford 1863 1947) Gantt charts (Henry Gantt 1861-1919) Motion studies (Frank and Lillian Gilbreth, 1922) Quality control (Shewhart, Juran, Feigenbaum, Deming, Taguchi, etc.) CAD Flexible manufacturing systems (FMS) Computer integrated manufacturing (CIM)
New Challenges in OM
From
To
Local or national focus Batch shipments Low bid purchasing Lengthy product development cycles Standardized products Job specialization
Global focus Just-in-time Supply chain partnering Rapid product development Strategic alliances Mass customization Empowered employees Teams
Characteristics of Goods
Tangible product Consistent product definition Production usually separate from consumption Can be inventoried Low customer interaction
Characteristics of Services
Intangible product Produced & consumed at same time Often unique High customer interaction Inconsistent product definition Often knowledge-based Frequently dispersed
1995 Corel Corp.
is part of
service
Service
Provider, not product is transportable Site of facility important for customer contact Often difficult to automate Revenue generated primarily from intangible service
75
50
25
25
50
75
100
Causes
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
Future
Global Focus Just-in-time shipments Supply-chain partners Rapid product development, alliances, collaborative designs
Process
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
Outputs
Goods and Services
Productivity
Measure of process improvement Represents output relative to input
Productivity
27000 26000
25000
24000 Year A Year B Year C Year A Year B Year C
Measurement Problems
Quality
may change while the quantity of inputs and outputs remains constant External elements may cause an increase or decrease in productivity Precise units of measure may be lacking
Productivity Increase
Labor
- contributes about 10% of the annual increase Capital - contributes about 32% of the annual increase Management - contributes about 52% of the annual increase
force Diet of the labor force Social overhead that makes labor available Maintaining and enhancing skills in the midst of rapidly changing technology and knowledge
Comparison of Productivity
Service Productivity
Typically
labor intensive Frequently individually processed Often an intellectual task performed by professionals Often difficult to mechanize Often difficult to evaluate for quality
Current Trends
U.S. is becoming more of a knowledge intensive service economy Globalization Total Quality Control Need for flexibility and innovation