Topic 1. Introduction Operations Management, Apuntes de Administración de Empresas

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M. del Mar Vi

M. del Mar Vi ñ

ñ as

as

Production & Operations Management

Production & Operations Management

PRODUCTION

PRODUCTION

is defined as the collection of

is defined as the collection of

processes, procedures, methods and techniques

processes, procedures, methods and techniques

that result in goods and services. This is possible

that result in goods and services. This is possible

thanks to decisions that increase the value of these

thanks to decisions that increase the value of these

products products in order to satisfy the customer needs.in order to satisfy the customer needs.

OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT

implies the

implies the

management of the production system which management of the production system which

transform the

transform the inputs

inputs (raw material, machinery,

(raw material, machinery,

labor

labor ,

) into

) into outputs

outputs (goods and services).

(goods and services).

Operations Management at present

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

Strategic and tactical decisions

Decisions concerning Operations Management can

Decisions concerning Operations Management can

be divided in :

be divided in :

• – Strategic decisionsStrategic decisions in the long term.in the long term.
• – Tactical decisionsTactical decisions in the short term.in the short term.

Characteristics of Strategic Decisions:

Characteristics of Strategic Decisions:

They affect products, processes and installations in the

They affect products, processes and installations in the

long term.

long term.

Usually they

Usually they ’

’ re unstructured.

re unstructured.

Difficult or very expensive to correct them in the short

Difficult or very expensive to correct them in the short

term.

term.

Important to coordinate with other functional

Important to coordinate with other functional

departments.

departments.

Strategic and tactical decisions

Strategic and tactical decisions

Characteristics of Tactical Decisions:

Characteristics of Tactical Decisions:

They affect products, processes and installations in the

They affect products, processes and installations in the

short term.

short term.

Usually they

Usually they ’

’ re structured and repetitive.

re structured and repetitive.

Possibility to correct them in the short term.

Possibility to correct them in the short term.

Also related to planning control to detect deviations

Also related to planning control to detect deviations

between the reality and the planning. Possibility to apply

between the reality and the planning. Possibility to apply

corrective actions.

corrective actions.

Strategic and tactical decisions

Strategic and tactical decisions

Examples of Tactical Decisions:

Examples of Tactical Decisions:

Medium term planning and production programming.

Medium term planning and production programming.

Level of stocks to cover the market demands.

Level of stocks to cover the market demands.

Development of standard procedures.

Development of standard procedures.

Decisions to assure the quality level of the products.

Decisions to assure the quality level of the products.

Decisions about preventive maintenance of the

Decisions about preventive maintenance of the

machinery.

machinery.

Operations function

Operations function

Planning

Planning

Projecting the future: resources and activities

Projecting the future: resources and activities

Production

Production

Control

Control

Integral management

Integral management

Operations Planning

Operations Planning

Strategic planning

Strategic planning

3

3

5 years

5 years

Senior Management

Senior Management

Problems in the long term

Problems in the long term

Tactical planning

Tactical planning

• 1

1

• 3 years

3 years

• Connection between

Connection between

strategic and Operational

strategic and Operational

planning

planning

Operational Planning

Operational Planning

1 year

1 year

Several weeks

Several weeks

Refines the strategic

Refines the strategic

planning

planning

Adaptative

Adaptative Planning

Planning

Removal of deviations

Removal of deviations

between real results and

between real results and

objectives

objectives

Units

Units

Components

Components

. Elements that compose the final . Elements that compose the final

product.

product.

Products

Products .

Final result of the production process

Final result of the production process

that it that it’’s delivered to the market.s delivered to the market.

Families

Families

. Group of products that have similar . Group of products that have similar

market requirements, production process, market requirements, production process,

materials,..

materials,..

Types

Types

. Group of families that share a similar . Group of families that share a similar

market behaviour.

market behaviour.

Production planning and control

Production planning and control

Strategic planning

Strategic planning

(Long Term)

(Long Term)

Demand forecasts L.T.

Demand forecasts L.T.

Sales planning L.T.

Sales planning L.T.

Production planning L.T.

Production planning L.T.

Financial planning L.T.

Financial planning L.T.

Aggregate planning

Aggregate planning

(Medium Term)

(Medium Term)

Objective: To carry out

Objective: To carry out

strategic planning at least strategic planning at least

cost. cost.

18 months planning. Monthly

18 months planning. Monthly

periods.

periods.

• – Family levelFamily level

• Capacity evaluation.

Capacity evaluation.

Operations Management

Production planning and control

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 capcity

planning

Shop floor

management

Operations

programming

Capacity Control

Priority Control

Purchase actions

Execution &

control

Purchases

Capac

ity

manag

ement

Business planning

Stocks

Stocks

Suppliers

CUSTOMERS

Raw Material

Production

Intermediate

products

Assembly

Final products

External items

Industrial

supplies and

spare parts

Why do we need inventories?

Why do we need inventories?

To satisfy the market demands of our final products.

To satisfy the market demands of our final products.

To avoid interruptions in the production process.

To avoid interruptions in the production process.

External supplies

External supplies

Internal supplies

Internal supplies

To balance the production.

To balance the production.

To obtain economic benefits.

To obtain economic benefits.

Low fitting between production and market demands.

Low fitting between production and market demands.

To get savings or speculation.

To get savings or speculation.

Fundamental questions

Fundamental questions

in materials planning

in materials planning

When

When do we need to order the materials?

do we need to order the materials?

How many

How many materials/elements do we have to order?

materials/elements do we have to order?

Which is the

Which is the adequate lot size

adequate lot size for each material?

for each material?

The answer depends on

The answer depends on several factors

several factors