Operations Management - Prof. Gómez, Apuntes de Dirección de las Operaciones

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M. del Mar Viñas & Juan Batlló Ferrer

Production & Operations Management

• PRODUCTION is defined as the collection of

processes, procedures, methods and techniques

that result in goods and services. This is possible

thanks to decisions that increase the value of these

products in order to satisfy the customer needs.

• OPERATIONS MANAGEMENT implies the

management of the production system which

transform the inputs (raw material, machinery, labor,…) into outputs (goods and services).

Operations Management at present PRODUCTION DIRECTOR Experis España - Barcelona Published 24 days ago SENIOR PRODUCT EXPERT DOGA - Barcelona y alrededores, España Published 19 days ago PROCESS ENGINEER Concep Arquitectura y Diseño de Farmacias Rentables SA - Barcelona y alrededores, España Published 31 days ago CUSTOMER SERVICE SUPERVISOR Abertis autopistas España - Barcelona y alrededores, España Published 25 days ago

Strategic and tactical decisions

• Decisions concerning Operations Management can

be divided in :

• Strategic decisions in the long term.
• Tactical decisions in the short term.
• Characteristics of Strategic Decisions:
• They affect products, processes and installations in the long term.
• Usually they’re unstructured.
• Difficult or very expensive to correct them in the short term.
• Important to coordinate with other functional departments.

Strategic and tactical decisions

• Examples of Strategic Decisions:
  • The selection of the good or service to be produced.
  • Appropriate design for the good or service to be produced.
  • Machinery and technology selection to produce the goods and services of the company according to cost, quality and time delivery requirements.
  • Strategic planning of the operations system.
  • Production capacity of the company facilities.
  • Facilities location taking into account the market and suppliers location.
  • Plant distribution of machinery and labour to assure an efficient production flux.

Strategic and tactical decisions

• Examples of Tactical Decisions:
  • Medium term planning and production programming.
  • Level of stocks to cover the market demands.
  • Development of standard procedures.
  • Decisions to assure the quality level of the products.
  • Decisions about preventive maintenance of the machinery.

Operations function

• Planning

– Projecting the future: resources and activities

• Production

• Control

• Integral management

Operations Planning

• Strategic planning
  • 3 – 5 years
  • Senior Management
  • Problems in the long term
• Tactical planning
• 1 – 3 years
• Connection between strategic and Operational planning
• Operational Planning
• 1 year – Several weeks
• Refines the strategic planning
• Adaptative Planning
• Removal of deviations between real results and objectives

Units

• Components. Elements that compose the final

product.

• Products. Final result of the production process

that it’s delivered to the market.

• Families. Group of products that have similar

market requirements, production process,

materials,..

• Types. Group of families that share a similar

market behaviour.

Production planning and control

• Strategic planning

(Long Term)

• Demand forecasts L.T.
• Sales planning L.T.
• Production planning L.T.
• Financial planning L.T.
  • Aggregate planning

(Medium Term)

• Objective: To carry out

strategic planning at least

cost.

• 18 months planning. Monthly

periods.

• Family level
• Capacity evaluation.

Operations Management Production planning and control Step Planning Activity Strategic Tactical Operacional Long term planning Long term production planning Long term capacity planning Mid term planning Aggregate planning (^) Capacity aggregate planning Master Production programming Master Production Schedule Approximate capacity planning Components programming Materials Requirement Planning Detailed capacity planning Shop floor management Operations programming Capacity Control Priority Control Purchase actions Execution & control Purchases

Stocks Suppliers CUSTOMERS Raw Material Production Intermediate products Assembly Final products External items Industrial supplies and spare parts

Why do we need inventories?

• To satisfy the market demands of our final products.
• To avoid interruptions in the production process.
  • External supplies
  • Internal supplies
• To balance the production.
• To obtain economic benefits.
• Low fitting between production and market demands.
• To get savings or speculation.

Fundamental questions in materials planning

 When do we need to order the materials?

 How many materials/elements do we have to order?

Which is the adequate lot size for each material?

The answer depends on several factors