Production Management IEOR 4000 - PowerPoint PPT Presentation

View by Category
About This Presentation
Title:

Production Management IEOR 4000

Description:

Initially lack of data and computing power and management ... Just-in-Time. Reengineering. Supply Chain Initiatives. EDI, ECR, VMI. Sharing Demand Information ... – PowerPoint PPT presentation

Number of Views:158
Avg rating:3.0/5.0
Slides: 22
Provided by: colu82
Learn more at: http://www.columbia.edu
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Production Management IEOR 4000


1
Production Management IEOR 4000
  • Prof. Guillermo Gallego

2
Self Introduction
  • Professor and Chairman of Industrial Engineering
    Operations Research Dept.
  • Research interest in Supply Chain Management and
    Revenue Management
  • Published over fifty papers
  • Visiting professor at Stanford GSB 1997-1997
  • Visiting scientist at IBM 1999-2003
  • Senior editor for MSOM and POM.
  • Consultant for Lucent Technologies

3
Topics to Be Covered
  • Today History of Operations Management,
    Production systems, Recent trends.
  • Deterministic models
  • EOQ, EPQ, JRP, ELSP, APP, MRP, JIT
  • Forecasting
  • MA, ES, MMFE.
  • Stochastic models
  • Newsvendor model.
  • Serial Systems Supply chain models.
  • Distribution and Assembly Systems

4
Benefits to Be Obtained
  • Understand production and inventory systems.
  • Understand basic tradeoffs between
  • Holding costs versus fixed costs.
  • Holding costs versus service levels.
  • Efficiency versus variety
  • Learn about
  • Production/inventory management techniques
  • Forecasting
  • Risk and sensitivity analysis
  • Supply chain design issues

5
Intended Audience
  • A required course for MS degree in IE and MS in
    OR.
  • Students entering the fields of industrial
    engineering or supply chain management.
  • Students interested in learning how to develop
    models.
  • Production and general managers wishing to
    understand models behind decision support
    systems.

6
Prerequisites
  • Working knowledge of calculus.
  • A good course in probability and statistics. This
    can be taken concurrently.
  • A deterministic models course (linear
    programming). This can be taken concurrently.
  • Knowledge of Excel or equivalent spreadsheet
    program.
  • Willing to work hard.

7
Evaluation
  • Assignments 15
  • Midterm 40
  • Final 45

8
Todays Lecture
  • Motivation
  • History of Operations Management
  • Recent Trends in Inventory Management Types of
    Manufacturing Systems
  • Strategic and Hierarchical Planning
  • Inventory Classification
  • Relevant Costs
  • Performance Measures

9
Motivation
  • Operations is concerned with the transformation
    of inputs into goods and services
  • Primary business function together with marketing
    and finance
  • It involves the greatest portion of the company's
    employees and capital assets.
  • Activities include
  • plant management, product development, process
    engineering, facility layout, production and
    capacity planning, quality control, inventory
    control, product distribution

10
History of Operations Management
  • Life before organized production
  • The industrial revolution
  • Invention of the steam engine.
  • Specialization of labor
  • Interchangeable parts
  • Assembly line (Ford)
  • Product variety (GM)

11
Scientific Method
  • The Principles of Scientific Management by
    Frederic Taylor
  • Experiment with methods to find best way to
    perform a job
  • Improve efficiency results in
  • Lower costs to companies
  • Higher wages for laborers
  • Better and less expensive products for consumers

12
Management Science
  • Also known as Operations Research
  • Use of models, mathematics and statistics to
    solve business problems
  • Objectives, Decision Variables, Constraints
  • Initially lack of data and computing power and
    management skepticism
  • ERP systems and better trained management opens
    possibilities

13
Recent Trends
  • Plant Automation
  • Just-in-Time
  • Reengineering
  • Supply Chain Initiatives
  • EDI, ECR, VMI
  • Sharing Demand Information
  • Demand Lead Times
  • Changing the Givens

14
Operations Systems
  • Job Shops
  • Low volume high variety
  • Custom made goods
  • Repetitive Manufacturing
  • High volume low variety
  • Televisions, roller skates
  • Batch Manufacturing
  • Medium volume and variety
  • Hand tools, drills
  • Processes and Projects
  • Refineries, ship manufacturing
  • Non Manufacturing

15
Strategic and Hierarchical Planning
  • Strategic Planning
  • Product line, location, size and number of plants
    and warehouses
  • Tactical Planning
  • Size of workforce, rate of production,
    distribution of goods
  • Operational Control
  • Assignment of work to stations, short term
    inventory control issues.

16
Impact of Inventories
  • Firm level
  • One third of the current assets
  • 2.5 years of after-tax profits
  • Potential to increase profits and reduce costs
  • Macro level
  • Accumulation at peak of cycle
  • Downscale production, slash prices, some firms do
    not survive
  • Low inventories at bottom of cycle
  • Increase production, hire people, additional
    increase in demands, higher prices, etc.

17
Inventory Classification
  • Functional
  • Cycle stock
  • Congestion stock
  • Safety stock
  • Anticipation inventories
  • Pipeline inventories (WIP)
  • Time
  • Input, WIP, In-transit, Output.

18
Classification by Value
  • Sort by annual dollar volume
  • Most firms
  • 20 SKUs account for 80 usage
  • 30 SKUS account for 15 usage
  • 50 SKUS account for 5 usage
  • ABC analysis treats high dollar volume parts
    differently.

19
Characteristics of Inventory Systems
  • Demand
  • Constant versus variable
  • Known or unknown
  • Lead Times Constant versus random
  • Review Times Periodic versus continuous review
  • Excess Demand Lost versus backlogged
  • Changing Inventory Perishable, obsolescence
  • Structure of System Assembly, distribution, etc.

20
Relevant Costs
  • Procurement costs fixed and variable
  • Holding costs Warehousing, insurance,
    opportunity cost
  • Stockout or penalty costs
  • Cost of changing the production rate hiring,
    firing, overtime
  • System control costs

21
Performance Measures
  • Probability of not stocking out during lead time
  • Fill rate Proportion of demands that are met
    directly from stock
  • Average number of backorders
  • Turnover ratio Ratio of throughput to average
    inventory
About PowerShow.com