Documents

Biz Ops Seminar 1

Description
Biz Ops
Categories
Published
of 2
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Related Documents
Share
Transcript
  Seminar 1: Introduction to Operations, Operations Strategy Soh Yu Hong Jonathan 1 What is operations management?    OM deals with the design, operation and improvement of the production system that create the firm’s primary products or services.      Operations include any process that accepts inputs and use resources to transform these inputs into valuable outputs- strategic  (next 20 years), tactical   (next 1 or 2 years) and operational   (now) decisions.    All physical products used and all services used was created/impacted by operations. Importance of OM    Bottom line and profitability of every business are affected by how well it manages its operations, be it a manufacturing or service organisation.    Improving and streamlining and business processes and operations can have a significant impact to the shareholder value.    Good operations can contribute to the top line (corporate sales/revenue). Challenges facing OM    Product proliferation (variety: customers may not always see the difference)      Decreasing profit margins      Short product life cycles (new products produced quickly)      Long supply chains- coordination issues    Continuous new product launches to meet market place requirements      Being on top of innovation curve  OM in the organisation    Marketing: generates sales revenue from product and service outputs      Finance: acquires financial resources and capital for inputs      Operations: translates materials and service into outputs      Support functions: accounting, info systems, engineering, HR.  Operations strategy    Involves configuring and developing business processes that will enable the firm to produce and deliver the products specified by the business strategy      Internal processes and interfaces between inputs and output markets (means by which operations implements corporate strategy & helps build a customer driven firm)  4 perspectives on operations strategy    Top down: what business wants operations to do      Mkt reqt: what the market position requires operations to do      Bottom up: what day-to-day experiences suggests operations should do      Operation resource: what operation resources can do  Competitive priorities    Cost    o   Low cost: process must be designed and operated to make them efficient (eg Costco)      Quality   o   Top quality: may require a high level of customer contact and may require superior product features (eg Ferrari)   o   Consistent quality: processes designed and monitored to reduce errors and prevent defects (eg Mcdonald’s)      Time    Seminar 1: Introduction to Operations, Operations Strategy Soh Yu Hong Jonathan 2 o   Delivery speed: design processes to reduce lead time (eg Dell)   o   On-time delivery: planning processes to increase percent of customer orders shipped when promised (eg United Parcel Service)   o   Development speed: cross-functional integration and involvement of critical external suppliers (eg Li & Fung)      Flexibility   o   Customisation: low volume, close customer contact and easily configured (eg Ritz Carlton)   o   Variety: capable of larger volumes than processes supporting customization (eg Amazon)   o   Flexibility: processes must be designed for excess capacity (eg UPS)  Benefits of excelling at four objectives    Cost: min cost, max value (internal). Min price, highest value (external)      Quality: error free processes (internal). Error-free products and services (external)      Speed: Fast throughput (movement of inputs and outputs through a production process) (internal). Quick delivery (external)      Flexibility: ability to change (internal). Frequent new products, maximum choice (external)  Efficient frontier view of trade-offs    X axis: cost efficiency. Y axis: variety      Improvements can be made through focus on increasing variety, increasing cost efficiency or overcoming trade-offs between variety and cost efficiency      All performance objectives, to some extent, trade-off against each other  Order winners and qualifiers    Order winner: increasing focus increases sales (eg cost, quality)      Order qualifier increasing focus has little increase in sales (eg features of product). If achievement of competitive priority falls below the threshold, there will be zero sales.  Breakeven analysis    F: fixed cost, constant regardless of changes in levels of output       c: variable cost per unit, varies directly with volume of output       p: price per unit       Q: quantity      Choose quantity that costs the least    Breakeven formula:      Make or buy decisions    Finds quantity for which the total costs for two alternatives are equal      Same price: Cost of making= F m  + c m Q. Cost of buying= F b  + c b Q.      Different price: Cost of making= p m Q –  (F m  + c m Q). Cost of buying= p b Q- (F b  + c b Q).      If cost of making < cost buying then make!      If expected demand > Q then make. Expected demand < Q then buy.   Formula: Q = (F m -F b )/(c b -c m )
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks