Managing People and Operations - PowerPoint PPT Presentation

1 / 40
About This Presentation

Managing People and Operations


The 'renting' of personnel from an organization that handles paperwork and ... Automobile painting. Products. Services. Money. Labor. Equipment. Information ... – PowerPoint PPT presentation

Number of Views:26
Avg rating:3.0/5.0
Slides: 41
Provided by: lesliest


Transcript and Presenter's Notes

Title: Managing People and Operations

Managing People and Operations
  • March 18, 2004

(No Transcript)
The Importance of People
  • The Need for Quality Employees
  • Employee performance affects the capability of
    the firm to service customer needs.
  • Employee performance affects profitability.
  • Payroll costs affect firms bottom line.
  • Quality of employees determines the long-term
    competitive potential of the firm.

The Lure of Small Firms
  • Advantages of Employment in Small Firms
  • Quicker movement to decision-making levels of
  • Greater managerial freedom
  • More opportunities for broad-based managerial
  • Flexibility in work scheduling and job sharing

Leading and Motivation
  • Personal Involvement of the Entrepreneur
  • Creates a significant personal relationship with
    employees based on loyalty and respect.
  • Directly influences employees understanding of
    how the firm operates (e.g., its ethics).
  • Makes the firm attractive to new employees.
  • Building Enthusiasm
  • Empowerment
  • Work teams
  • Benefits

Sources of Employees
Sources of Employees
Executive SearchFirms
Employee Referrals
Public Employment Agencies
Private EmploymentAgencies
Temporary HelpAgencies
Job Descriptions
  • Job Description
  • A written summary of the essential duties
    required by a specific job
  • Aids in personnel recruitment.
  • Helps focus employees on their work.
  • Provides direction in training.
  • Serves as the basis for performance review.
  • Job Specification
  • A list of the skills and abilities needed by the
    job holder to successfully perform a specific job
  • Aids in selecting the most qualified job

Example for a Stock Clerk in Retail Food Store
Title Stock ClerkPrimary Function To stock
shelves food products and other itemsSupervision
Received Works under direct supervision of store
managerSupervision Exercised None Duties1. Rec
eive and store products in storage area.2. Take
products from storage, open outer wrapping, and
place on store shelves.3. Provide information
and/or directions to customers seeking particular
products or having other questions.4. Monitor
quantity of products on shelves and add products
when supplies are low.5. Perform housekeeping
duties when special need arisesfor example,
when a container is broken or products fall on
the floor.6. Assist cashiers in bagging products
as needed during rush periods.7. Assist in other
areas or perform special assignments as directed
by the store manager.
Evaluating Prospects and Selecting Employees
Steps in Recruiting Employees
Application Forms
Applicant interview
Reference checking
Applicant testing
Physical Examination
Training and Development
  • Purposes of Training and Development
  • Prepare recruit to perform the duties of the job.
  • Improve the performance of current employees.
  • Prepare employees for career advancement.
  • Improve morale of current employees.
  • Serve as an inducement to potential applicants.

Compensation and Incentives
  • Financial Incentives for effective bonus plans
  • Set attainable and meaningful goals.
  • Bring workers in (employee participation).
  • Keep targets moving.
  • Aim carefully.
  • Profit Sharing
  • Fringe Benefits
  • Supplements to compensation designed to be
    attractive and beneficial to employees.
  • Benefits are a substantial portion of payroll
    costs (40-50)
  • Small firms tend to provide fewer benefits.
  • Outsourcing the administration of benefits

Employee Stock Ownership Plans (ESOPs)
  • Plans through which a firm is sold either in part
    or in total to its employees.
  • Employees performance is motivated by their
    sharing of ownership in the firm.
  • Owners can cash out and withdraw without selling
    to outsiders.
  • ESOPs offer tax advantages to owners and

Very Important Job Factors
Special Issues in HRM
  • Contract employees
  • Independent contractors hired for fixed periods
    of time or specific projects
  • Less expensive for small firms and provides
    increased flexibility to staff-up or down
  • Employee Leasing
  • The renting of personnel from an organization
    that handles paperwork and administers benefits
    for those employees
  • Rapidly growing
  • Allows small firms to provide increased benefits
  • No paychecks, government reports, payroll taxes
  • No monitoring of vacation or sick days
  • Less employee loyalty and attachment to the firm

Special Issues in HRM
  • Formalizing of Employer-Employee Relationships
  • Employee handbook contents
  • Expression of company philosophy
  • Recruitment
  • Selection
  • Training
  • Vacations
  • Grievances
  • Discipline
  • Performance reviews

Special Issues in HRM
  • The Need for a Human Resource Manager
  • Conditions favoring the appointment of an HR
  • A substantial number of employees (100)
  • Unionized employees
  • A high labor turnover rate
  • A strong need to recruit skilled and professional
  • Supervisors or operative employees in need of
  • Low employee morale
  • Intense job market competition for personnel

The Operations Process
  • The activities that accomplish a firms work
  • Operations management
  • The planning and control of the operations
  • Involves acquiring inputs and overseeing their
    transformation in products and services

The Operations Process
The Operations Process
  • Manufacturing Versus Service Operations
  • Productivity is more easily measured in
    manufacturing than service operations
  • Quality is more difficult to establish in service
    than manufacturing operations.
  • Customers are more involved in service than
    manufacturing operations.
  • Manufacturing can produce goods for inventory
    service operations cannot store or bank services

Competitive Strength ThroughImproved Productivity
  • The Importance of Improving Productivity
  • Productivity is the efficiency with which inputs
    are transformed into outputs.

  • Quality
  • The features of a product or service that enable
    it to satisfy customers needs.
  • A perception of the customer as to the
    suitability of the product or service of a firm.
  • Total Quality Management (TQM)
  • An all-encompassing management approach to
    providing high-quality products and services

Essential Elements of Successful Quality
Customer Focus
  • Customer Expectations
  • Quality is the extent to which a product or
    service satisfies customers needs and
  • The customer is the focal point of quality
  • Customer Feedback
  • Customers are the eyes and ears of the business
    for quality matters.

Organizational Culture and TQM
  • Organizational Culture
  • The behavior, beliefs, and values that
    characterize a particular firm.
  • Continuous Quality Improvement
  • A constant and dedicated effort to improve
  • Benchmarking
  • The process of studying the products, services,
    and practices of other firms and using the
    insights gained to improve ones own operations

Tools and Techniques of TQM
  • Employee Participation
  • Employee performance is a critical quality
  • Quality circles
  • The Inspection Process
  • Inspection standard
  • Attribute inspection
  • Variable inspection

Quality in Service Businesses
  • More difficult to measure than for tangible
  • Factors affecting customers perception
  • Being on target
  • Care and concern
  • Spontaneity
  • Problem-solving
  • Follow-up
  • Recovery

  • The process of obtaining materials, equipment,
    and services from outside suppliers to meet
    production/marketing goals
  • The Importance of Purchasing
  • The process of acquiring quality raw material
    inputs affects
  • The timely and consistent production of quality
  • Retailer sales of finished products to customers.
  • The costs of products, their profitability and
    their selling prices

Make vs. Buy
  • A firms choice between producing and purchasing
    component parts for its products.
  • Reasons for making
  • Increased utilization of plant capacity
  • Assurance of supply of critical components
  • Maintaining secrecy in designs and processes
  • Saving on transportation costs and supplier
  • Closer coordination and control of overall
  • Higher quality components for inputs

In-house vs. Outsource
  • Outsourcing
  • Purchasing products or services that are outside
    the firms area of competitive advantage.
  • Reasons for Buying
  • Suppliers part/service is cheaper and/or higher
  • Investment savings on space, personnel, equipment
  • Greater flexibility in matching supply and demand
  • Increased focus on production of core
  • No risk of equipment obsolescence

Purchasing Policies and Practices
  • Diversifying sources of supply
  • Reasons for having a sole supplier
  • Outstanding supplier quality
  • Quantity discounts for volume purchases
  • Single orders too small to divide among suppliers
  • Quality of supplier-customer relationship
  • Reasons for having multiple suppliers
  • Choice of best quality, price, and service
  • Supplier competes for business
  • Insurance against input interruptions

Purchasing Policies and Practices
  • Reciprocal buying / Bartering
  • Purchase discounts
  • Pooling purchases
  • Forward buying
  • Budget buying

Relationships with Suppliers
  • Selecting suppliers
  • Price and quality
  • Location and delivery reliability
  • Services credit, product support, promotion
  • Building good relationships with suppliers
  • Purchasing practices
  • Pay bills promptly
  • Be courteous to sales representatives
  • Avoid abrupt cancellations of orders
  • Maintain a professional relationship

Developing Strategic Alliances
  • An organizational relationship that links two
    independent business entities in a common
    endeavor. Involves close coordination of buyers
    and sellers to
  • Reduce product introduction lead time
  • Improve product quality
  • Engage in joint problem solving
  • Make joint adjustments to market conditions
  • Involve the supplier early in product development

Inventory Management
  • Objectives of Inventory Management

Inventory Management
  • Inventory Cost Control
  • Economic order quantity (EOQ)
  • The quantity to purchase in order to minimize
    total inventory costs.


Graphic Portrayal of the Economic Order Quantity
Controlling Inventory Costs
  • ABC Inventory Analysis
  • A system of classifying items in inventory by
    relative value
  • Category A (close/continuous control)
  • High-value or critical production component items
  • Category B (moderate control)
  • Less costly, secondary importance items
  • Category C (periodic control)
  • Low-cost and noncritical items

Inventory Management
  • Reorder point and Safety Stock
  • Just-In-Time Inventory (JIT) System, also Kanban
  • A method of reducing inventory level to an
    absolute minimum.
  • New items arrive at the same time that the last
    inventory item is placed in service
  • JIT promotes
  • Closer coordination with suppliers
  • Consistent quality production
  • Lower safety stock levels

Inventory Record-Keeping Systems
  • Physical inventory system
  • A method that provides for periodic counting of
    items in inventory
  • Cycle counting
  • A system of counting different segments of the
    physical inventory at different times during the
  • Perpetual inventory
  • A method for keeping a running record of

Summary Operations Management
  • Discussed the nature of the operations process
    for both products and services
  • Discussed the key elements of TQM programs
  • Discussed the factors to consider in choosing
    suppliers and how to maintain good relationships
  • Discussed the objectives and techniques of
    inventory management
Write a Comment
User Comments (0)