Project Management 3e. - Gray and Larson

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Topic Areas of PPC Course

• Aggregate Planning
• Scheduling
• Supply Chain
• Simulation
• Lean Six Sigma
• Management of Information System

• Prerequisite topics
• Forecasting

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Functional Areas of the Firm
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What is Strategy ?

• Strategy is a common vision that unites an
  organization, provides consistency in decisions,
  and keeps the organization moving in the right
  direction

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Time Horizons for Strategic Decisions

• 1. Long Term Decisions ( gt year) ? Strategic
  decision
• Locating and Sizing New Facilities
• Finding New Markets for Products
• Mission Statement meeting quality objectives
• 2. Intermediate Term Decisions (weeks or month)
• Forecasting Product Demand
• Determining Manpower Needs
• Setting Channels of Distribution
• Equipment Purchases and Maintenance
• 3. Short Term Decisions (hours or days) ?
  Tactical decision
• Purchasing
• Shift Scheduling and Maintenance
• Inventory Control

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The Elements of Strategy
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Decision Horizons of Manufacturing Strategy
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History of Production and OM

• Major Thrust of the Industrial Revolution
  1850-1890
• Factories tended to be small. Boss had total
  control. Little regard for workers safety or
  workers rights.
• Production Manager Position. 1890-1920.
• Frederick Taylor champions the idea of
  scientific management.
• As complexity grows specializations take hold.
• Inventory Control Manager
• Purchasing Manager
• Scheduling Supervisor
• Quality Control Manager etc.

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GLOBALIZATION COMPETITION

• Global competition is heating up to an
  unprecedented degree. It appears that several
  factors favor the success of some industries in
  some countries
• For example
• Germany printing presses, luxury cars, chemicals
• Switzerland pharmaceuticals, chocolate
• Sweden heavy trucks, mining equipment
• United States personal computers, software,
  entertainment
• Japan automobiles, consumer electronics

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Porters Thesis

• Famed management guru, Michael Porter, has
  developed a theory to explain the determinants of
  national competitive advantage. These include
• Factor Conditions
• (Land, Labor,Capital, etc.)
• Demand Conditions
• (local marketplace may be more
  sophisticated/demanding than world marketplace)
• Related and Supporting Industries
• Firm Strategy, structure, rivalry
• (e.g. Germans are strong technically, Italian
  family structure, Japanese management methods)

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Time-Based Competition
Time-based competitors focus on the bigger
picture, on the entire value-delivery system.
They attempt to transform an entire organization
into one focused on the total time required to
deliver a product or service. Their goal is not
to devise the best way to perform a task, but to
either eliminate the task altogether or perform
it in parallel with other talks so that over-all
system response time is reduced. Becoming a
time-based competitor requires making
revolutionary changes in the ways that processes
are organized (Blackburn(1991). Being not
only the first to market but the first to volume
production as well gives a firm a decided
advantage.
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How Do Firms Differentiate Themselves from
Competitors?

• Low Cost Leaders Some examples include
• WalMart and Costco in Retailing
• Korean automakers (Hyundai, Kia, etc.)
• e machines personal computers
• High Quality (and price) Leaders. Ex
• Mercedes Benz automobiles
• Rolex Watches
• (some firms do both Chevrolet and Cadillac)

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Understand TradeoffsExample Made-to-Order Pizza
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Some Dimensions of Competition

• Re-engineering of the Business Process
• Streamlining process
• JIT Deliveries
• Cutting waste
• Time-based competition
• Shortening time to delivery
• Competing on Quality

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Business Process Re-engineering

• The process of taking a cold hard look at the way
  that things are done. Term coined by Hammer and
  Champy in their 1993 book.
• Classic Example IBM Credit Corporation. The
  process had been broken down to a series of
  multiple steps, each having substantial delays.
  Approval required from 6 days to 2 weeks. The
  process was re-engineered so that a single
  specialist would handle a request from beginning
  to end. The result was that turnaround time was
  slashed to an average of 4 hours!

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Just-In-Time
JIT is a production control system that grew
out of Toyotas kanban system. It is a philosophy
of production control (also know as lean
production) that attempts to reduce inventories
to an absolute minimum. It has become pretty much
a standard way of thinking in many industries
(especially the automobile.) We will discuss
JIT and its relationship to MRP in next session
course.
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The Product Life-Cycle Curve
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The Product/Process Matrix
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So you have an idea what others do and you have
a business idea
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OPERATION AS A SYSTEM
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DECISION MAKING
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A Framework for Manufacturing Strategy
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PRODUCTION SYSTEM
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CAPACITY

• Level of capacity
• Size of capacity changes
• Handling excess demand
• Hiring/firing workers
• Need for new facilities

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FACILITIES

• Best size for facility
• Large or small facilities
• Facility focus
• Facility location

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HUMAN RESOURCES

• Skill levels required
• Degree of autonomy
• Policies
• Profit sharing
• Individual or team work
• Type of supervision
• Levels of management
• Training

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QUALITY

• Target level
• Measurement
• Employee involvement
• Training
• Systems needed to ensure quality
• Maintaining quality awareness
• Evaluating quality efforts
• Determining customer perceptions

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SOURCING

• Degree of vertical integration
• Supplier selection
• Supplier relationship
• Supplier quality
• Supplier cooperation

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OPERATIONS PRIORITIES

• Cost
• Quality
• Delivery Flexibility
• Delivery Speed
• Delivery Reliability
• Coping with Changes in Demand
• Flexibility and New Product Introduction Speed

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The TRANSFORMATION PROCESS
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MANAGEMENT IN e-BUSINESS
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TYPES OF B2B TRANSACTIONS
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GLOBALIZED THE BUSINESS
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COMPETITION
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STRATEGIC DECISIONS IN OPERATIONS
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Example WAL-MART
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Product Vs. Process Vs. Technology
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Matrix
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ISSUES and TRENDS
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The END