The document provides an overview of operations management concepts including: - The 10 decision areas of operations management including product/service design, quality, and capacity planning. - Different types of production systems such as job shop, batch, and mass production and factors to consider when selecting a process. - Key facility location factors and the general procedure for evaluating location alternatives.

5. Operations Management Flow Chart

11. Typical Organization Chart

12. Typical Manufacturing Organization

13. Products & Facilities Product design Facilities layout Capacity planning Facilities location Structure Reporting relationships Teams Control Processes Inventory management Productivity Quality The Technical Core Operations Management Inputs Raw materials Human resources Land, buildings Information Technology Outputs Products Services Operations Strategy Feedback

14. Business Information Flow

26. OM Decisions

30. 1 Producibility Cost Quality Reliability 2 3 4

31. 1 Producibility Cost Quality Reliability 2 3 4 Timing 5

34. Automobile Computer Installed Carpeting Fast-food Meal Restaurant Meal Auto Repair Hospital Care Advertising Agency Investment Management Consulting Service Counseling Percent of Product that is a Good Percent of Product that is a Service 0 25 50 75 100 25 50 75 100

44. Introduction Growth Maturity Decline Standardization Less rapid product changes - more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning good margin Reduce capacity Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focused Enhance distribution Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Best period to increase market share R&D product engineering critical Practical to change price or quality image Strengthen niche Cost control critical Poor time to change image, price, or quality Competitive costs become critical Defend market position OM Strategy/Issues Company Strategy/Issues HDTV CD-ROM Color copiers Drive-thru restaurants Fax machines Station wagons Sales 3 1/2 ” Floppy disks Internet

45. Product Development Process (Technical) Needs Identification Advance product planning Advance design Detailed engineering design Production process design and development Product evaluation and implementation Product use and support

68. Process-focused Job Shops (Print shop, emergency room , machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread) Mass Customization Customization at high Volume (Dell Computer ’ s PC) Low Moderate High Volume High Moderate Low Variety of Products

71. Raw Material & Comp. Inventory Finished Item Inventory S1,2 S1,1 S1,n S2,1 S2,2 S2,m Assembly Line 1: Product Family 1 Assembly Line 2: Product Family 2 Fabrication (or Backend Operations) Dept. 1 Dept. 2 Dept. k S1,i S2,i Dept. j

73. Commercial printer Heavy equipment Auto assembly Sugar refinery Void Void Low volume, low standardization, one of a kind Multiple products, low volume Few major products, higher volume High volume, high standardization, commodity products Process structure process life-cycle stages Jumbled flow (job shop ) Disconnected line flow (batch) Connected line flow (assembly line) Continuous flow Product structure Product life-cycle stages

91. Factor ratings for each location alternative Total Score Factor Factor Rating Location Rating Product of Ratings Tax advantages Suitability of labor skills Proximity to customers Proximity to suppliers Adequacy of water Receptivity of community Quality of educational system Access to rail and air transp. Suitability of climate Availability of power 4 3 3 5 1 5 4 3 2 2 8 2 6 2 3 4 1 10 7 6 32 6 18 10 3 20 4 30 14 12 149

93. Total costs Locations A B C D 5 4 3 3 3 1 1 1 1 2 2 2 3 4 4 4 5 5 5 2

94. Volume of Units Costs of Facts Total Fixed Costs Material Transportation Labor

95. Volume of Output Total Costs C C B A D E A D B E

96. M A M B = [CA 1 ] W 1 [CB 1 ] [CA 2 ] W 2 [CB 2 ] [CA n ] W n [CB n ] ……… . If M A M B Is more than one then location A will be better than B.

117. Productivity