MGMT 3613 Operations Management, Chapter 6 Notes

MGMT 3613 | Operations Management Chapter 6 Notes 1) Explain the strategic importance of process selection: a) Process selection refers to deciding on the way production of goods or services will be organized. Processes convert inputs to outputs; they are the core of operations management. 2) Explain the influence that process has on an organization: a) Process Selection affects the entire organization and its ability to achieve its mission, and affects the organization’s supply chain. 3) The basic processing types are: a) Job Shop: Usually operates on a relatively small scale. It is used when a low volume of high-variety goods or services will be needed. High flexibility and skilled workers are necessary. Example: Veterinarian Office b) Batch: Used when a moderate volume of goods or services are needed. The skill level of workers need not be as high, and equipment need not be as flexible. Examples: Bakeries, movie theaters, and airlines. c) Repetitive: Used when high volumes of standardized goods or services are needed. Slight flexibility of equipment is needed. Skill of workers is relatively low. This process type is often referred to as an assembly. Examples: TVs, automobiles, and computers. d) Continuous: Used when a high volume of nondiscrete, highly standardized output is desired. These systems have almost no variety in output and need no equipment flexibility. Skill of workers can range from high to low depending on the complexity of the system. Examples: process to make steel, salt, sugar, and flour. e) Project: Used for work that is non routine, with a unique set of objectives to be accomplished in a time frame. Examples: putting on a play, publishing a book, and building a bridge. 4) Discuss automated approaches to processing: a) Automation is machinery that has sensing and control devices that enable it to operate automatically. There are three types of automation: 1. Fixed Automation: It uses high-cost, specialized equipment for a fixed sequence of operations. 2. Programmable Automation: Involves the use of high-cost, general purpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation. 3. Flexible Automation: It uses equipment more customized than that of programmable automation. A key difference between the two is that flexible automation requires less changeover time. 5) List some reasons for redesign of layouts: a) The most common reason for redesign of layouts include inefficient operations, accident or safety hazards, changes in the design of a products or services, introduction of new products and services, changes in the volume of output, changes in methods of equipment, changes in environmental or other legal requirements and morale problems. 6) Describe the basic layout types: a) Product Layout: Uses standardized processing operations to achieve smooth, rapid, high-volume flow. b) Process Layout: Layouts that can handle varied processing requirements. c) Fixed Position Layout: Layout where the product or project remains stationary, and workers, materials and equipment are moved as needed. 7) List the main advantages and disadvantages of product layouts and process layouts: a) Product Layouts: Advantages: i. high output ii. low unit cost due to volume iii. labor specialization reduces training costs and time iv. high utilization of labor and equipment v. routing and scheduling are part of initial design, therefore not requiring much time once the operation has begun. vi. Accounting, purchasing, and inventory control are fairly routine Disadvantages: i. intensive division of labor ii. iii. iv. v. vi. b) Processes Layouts: i. ii. iii. iv. poorly skilled workers show little interest in maintaining equipment. System is inflexible System is highly susceptible to shutdowns Preventative maintenance quick repairs and spare parts inventories are necessary expenses. Incentive plans cause variations among outputs of workers Advantages: Systems can handle a variety of processing requirements Systems are not vulnerable to equipment failures General-purpose equipment is less costly than specialized equipment It is possible to use individual incentive plans Disadvantages: i. In-process inventory costs can be high if batch processing is used ii. routing and scheduling pose continual challenges iii. equipment utilization rates are low iv. material handling is slow and inefficient v. job complexities often reduce the span of supervision and result in higher supervisory costs. vi. Special attention necessary for each product or customer vii. Accounting, inventory control and purchasing are much more involved