Description
world class manufacturing process, manufacturing model, world class supplier practices, manufacturing management practices, quality management practices.
Manufacturing Management
An Overview
Operations Management – General Model Change is the only constant
What the model involves:
?
?
Inputs: Transformed resources and facilitators and transforming resources Environment for delivering product :
Design & improvement of product ? Design & improvement of transforming Process and Facilities
?
? ? ?
Delivery of products and services to customers Planning and control of manufacturing system Firm’s strategic focus and operations strategy
Core & Support Functions
The three core functions
Significant Events in Operations Management
Significant Events in OM
? ? ?
?
? ? ?
Division of labor (Smith, 1776) Standardized parts (Whitney, 1800) Scientific management (Taylor, 1881) Coordinated assembly line (Ford 1913) Gantt charts (Gantt, 1916) Motion study (the Gilbreths, 1922) Quality control (Shewhart, 1924)
Significant Events - Continued
? ? ? ?
?
?
CPM/PERT (Dupont, 1957) MRP (Orlicky, 1960) CAD Flexible manufacturing systems (FMS) Manufacturing automation protocol (MAP) Computer integrated manufacturing (CIM)
Eli Whitney
? Born 1765; died 1825 ? In 1798, received government contract to make 10,000 muskets ? Showed that machine tools could make standardized parts to exact specifications
?
© 1995 Corel Corp.
Musket parts could be used in any musket
Frederick W. Taylor
? Known as „father of scientific management? ? In 1881, as chief engineer for Midvale Steel, studied how tasks were done & incentives
?
(contr: 1890-1915)
Began first motion & time studies
? Created efficiency principles ? Matching employees to right job ? Providing proper work methods and tools & training
© 1995 Corel Corp.
Frank & Lillian Gilbreth
? Frank (1868-1924); Lillian (1878-1972) ? Husband-and-wife engineering team ? Further developed work measurement methods ? Applied efficiency methods to their
home & 12 children!
? (Book & Movie: “Cheaper by the Dozen,” book: “Bells on Their Toes”)
© 1995 Corel Corp.
Henry Ford
? Born 1863; died 1947 ? In 1903, created Ford Motor Company ? In 1913, first used moving assembly line to make Model T
?
‘Make them all alike!?
Unfinished product moved by conveyor past work station
© 1995 Corel Corp.
? Paid workers very well for 1911 ($5/day!)
W. Edwards Deming
? Born 1900; died 1993 ? Engineer & physicist ? Credited with teaching Japan quality control methods in post-WW2 ? Used statistics to analyze process ? His methods involve workers in decisions
Contributions From
? ?
?
? ? ?
Human factors Industrial engineering Management science Biological science Physical sciences Information science
New Challenges in OM
From To ? Global focus ? Just-in-time ? Supply chain partnering ? Rapid product development, alliances ? Mass customization ? Empowered employees, teams ? Use of IT to cut space and time limitations ? Managing production networks
? ? ? ?
? ?
Local or national focus Batch shipments Low bid purchasing Lengthy product development Standard products Job specialization
Manufacturing Model
Environment
Regulations Currency Fluctuations Cultural Variations Resources Capital People Manufacturing Enterprise Supply Chain Process V Order to Delivery Process Product Development Process Orders/ Cash Products Competitors Products
$
Shareholders
Material
Technology
Customers
A SUPPLY CHAIN
Design & Development Promotion & Sales
R
A W
C
U S T
M A T L S Flows of material, information, money, and knowledge Materials Supply Components Supply
Finished Goods Manufacturing Distribution Warehousing Retailing
O M E R S After-Sales Support Service Centers
Ten Critical Decisions
? ? ?
?
? ? ?
?
Service, product design…………….. Process, capacity design………….. Location …………….………………… Layout design ……………………….. Human resources, job design…….. Supply-chain management………… Inventory management ……………. Scheduling
Ch. 5 Ch. 7, 7S Ch. 8 Ch. 9 Ch. 10, 10S Ch. 11,11s Ch. 12, 14, 16 Ch. 3, 13, 15 Ch. 17 Ch 6
The Critical Decisions
?
Service and product design
What product or service should we offer? ? How should we design these products and services?
?
?
Quality management
Who is responsible for quality? ? How do we define quality?
?
The Critical Decisions Continued
?
Process and capacity design
What processes will these products require and in what order? ? What equipment and technology is necessary for these processes?
?
?
Location
Where should we put the facility ? On what criteria should we base this location decision?
?
The Critical Decisions - Continued
?
Layout design
How should we arrange the facility? ? How large a facility is required?
?
?
Human resources and job design
How do we provide a reasonable work environment? ? How much can we expect our employees to produce?
?
The Critical Decisions Continued
?
Supply chain management
Should we make or buy this item? ? Who are our good suppliers and how many should we have?
?
?
Inventory, material requirements planning,
How much inventory of each item should we have? ? When do we re-order?
?
The Critical Decisions Continued
?
Intermediate, short term, and project scheduling
Is subcontracting production a good idea? ? Are we better off keeping people on the payroll during slowdowns?
?
?
Maintenance
Who is responsible for maintenance? ? When do we do maintenance?
?
Mission
? Mission - where are you going?
Organization?s purpose for being ? Provides boundaries & focus ? Answers „How can we satisfy people?s needs?? ? Expressed in published statement
?
Sample Missions
?
As a service company, our mission is to: Satisfy our customers’ immediate needs and wants by providing them with a wide variety of goods and services at multiple locations (which co?)
The mission of Merck is to provide society with superior products and services - innovations and solutions that improve the quality of life and satisfy customer needs - to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return
?
Factors Affecting Mission
Philosophy & Values Environment Mission Customers Benefit to Society Public Image Profitability & Growth
Mission/Strategy
?
Mission - where you are going Strategy - how you are going to get there
?
Strategy
? Action plan to achieve mission ? Shows how mission will be achieved ? Company has a business strategy ? Functional areas have strategies
© 1995 Corel Corp.
Strategy Process
Company Mission
Business Strategy
Functional Area Functional Area Strategies Marketing Decisions Operations Decisions Fin./Acct. Decisions
?
Differentiation
Competitive Advantage Through:
?
Cost leadership Quick response better, cheaper, more responsive
?
Competing on Differentiation
?
Uniqueness - can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value
Competing on Cost
?
?
Maximum value as perceived by customer Does not imply low value or low quality
Competing on Response
?
?
?
Flexible Reliable Rapid
Requires institutionalization within the firm of the ability to respond
Competing On Any Basis
?
Probably requires the institutionalization within the firm of the ability to change, to adapt
Examples of Distinctive Competencies
Price
Low Cost, Value for money Ginger Hotels, McDonald’s, Low cost airlines, Nano
Quality
High-performance design Sony TV or high quality, Consistent Lexus, Toyota, Mercedes quality Kodak, Motorola (*)
Time Flexibility
Rapid delivery On-time delivery
Variety Volume
Fedex, McDonald’s, One-hour photo, Dominoes
Burger King, Zara Fashion, Nokia?
Service
Location
Superior customer service
Convenience
Disneyland, Ritz Carlton, Taj Group of hotels
Banks, ATMs
OM?s Contribution to Strategy
Operations Decisions
Quality
Product Process Location Layout Human Resource Supply Chain
Pizza Hut?s five-minute guarantee at lunchtime Federal Express?s “absolutely, positively on time”
Examples
Specific Strategy Used
FLEXIBILITY
Competitive Advantage
Sony?s constant innovation of new products Design Compaq Computer?s ability to follow the PC market Volume Southwest Airlines No-frills service
LOW COST
DELIVERY
Speed Dependability
QUALITY
Differentiation (Better) Cost leadership (Cheaper) Response (Faster)
Conformance Motorola?s automotive products ignition systems Motorola?s pagers Performance
Inventory
Scheduling Maintenance
IBM?s after-sale service on mainframe computers AFTER-SALE SERVICE
Fidelity Security?s broad line of mutual funds BROAD PRODUCT LINE
Operations Strategy at Wal-Mart
Wal-Mart Mission Competitive Priority
Provide value for our customers
Low prices, everyday
Operations Strategy Operations Structure
Low inventory levels
Short flow times
Linked communications between stores
Fast transportation system
Enabling Process and Technologies
EDI/satellites
Cross-docking
Focused locations
Operations Strategy at Low cost airlines Easy Jet, Ryan air
Mission Competitive Priority
Low cost airlines
Provide cheap air transport for our customers
Low prices, everyday
Operations Strategy Operations Structure
Single aircraft type
Minimal ground staff/ no food / lugguage handling extra
Longer flying hours
Enabling Process and Technologies
Internet/online tickets
Short hop routes
100% capacity pricing
World Class Manufacturing A survey of global best practices
What differentiates a world class company?
World Class Manufacturing
Competing and Thriving in Global Markets
Global
Exporters
World Class Manufacturers
Markets
Domestic
Local
Multinational Players
Competitors Global
Local
Manufacturing Model
Environment
Regulations Currency Fluctuations Cultural Variations
$
Resources Capital People Material Technology Manufacturing Enterprise Supply Chain Process V Order to Delivery Process Product Development Process Orders/ Cash Products Competitors Products
Shareholders
Customers
World Class Manufacturing – some earlier models
T Q M
J I T
T P M
T Q M
L E A N
C I M
SCHONBERGER
GUNN
World Class Manufacturer – What it takes
World Class Manufacturer
W C. V IS I O N
W C
C ap ac it y
P E O P L E
T E C H N O L O G Y
B e n c h M & C. I.
S U P. C U S. R E L
World class companies : What it takes
Close Customer relationships & expectation mapping
Achieving performance through people
Close Supplier relationships/ Dyads
WCM
S Commitment to self analysis & improvement
World class capacities & VISION
Aggressive approach to technology
World class companies : What it takes
? ? ? ?
?
?
Closer connections to customers Closer relationships/ cooperation with fewer suppliers including new product development. Unwavering commitment to self analysis and improvement Aggressive approach to technologies (in manufacturing processes/ products & in information management etc.) that can help turn visionary strategies into gold medal realities World class capacities (infrastructure) and outlook Striving to meet customer needs and expectations in areas like service, delivery and quality (People- skills and motivation)
World Class Manufacturing – Core Initiatives
Supplier Relationships/ Dyads
Customer relationshipsmeasure
Pursuing Quality & process impr.
WCM
Industry B. P. Benchmarking and C. I.
Aggressively Embracing technology
Achieving performance through people
Let us see what these ideas mean in today’s context
Roadmap to World Class Manufacturing
Integrated Information Systems framework
Better decisions based on Information and Analysis
Analysis & Information Reporting & sales Prod Inv. contrCont Purch Cont Pers. Control Cont Cont Value oriented accounting Personnel A/c Quantity oriented Operative system
Inv a/c
FA a/c
A/c payable
A/c reciev
Production
Engg.
Sales/ marketing Purchase
Personnel
Generating value across the Value Chain(Porter) every process benchmarked to be best in industry
Firm infrastructure Human Resource Management Technology Development Procurement Inbound Operations logistics
Service Marketing & Sales Outbound logistics
Aggressive use of currently available Technologies
Information management tools
Process & Design tools: CAD, CAE, CAPP, PDM, GT, RP, CIM, Forecasting s/w Lean Tools : JIT, 5 S, Takt times, SMED, Visual systems, Work cells, value stream mapping,
Material Processing & Handling tools
Inter Organizational Systems
FMS, AGV, CMS (coordinate Extranet, EDI link to measuring systems), AS/RS, suppliers & customers, Robotic systems, MHS Material tracking: Bar coder, RFID Internet, POS
Decision Making info analysis: DSS, BIW, SCM, APS, EIS, DWDM etc.
ERP, MRP, MES, SCM
Computerized SPC
ERP_SCM links, APO Portals for suppliers and customers
U S Survey – Technology implementation(2002-2006)
U S Survey – Technology Implementation (2002-2006)
?
World Class companies_ customer practices Customer satisfaction surveys Continuous replenishment for customers
?
?
Customers interact with production employees
Enterprise integration with key customers
Customer involvement in new product development
?
?
A major survey of these practices was done using a prior classification of companies into WCM, APP WCM, Somewhat WC, Laggards
? ?
World Class companies_ supplier practices Key suppliers on JIT basis Suppliers – contract continuous price reduction Suppliers contract on total cost not unit cost Suppliers involved in NPD
?
?
?
Vendor managed inventory
A major survey of these practices was done using a prior classification of companies into WCM, APP WCM, Somewhat WC, Laggards (After one slide)
World Class companies_ supplier best practices
1. Conduct Joint improvement activities, share best practices 2. Share information – in structured format 1. Develop supplier technical skills: Build supplier’s problem solving skills, Innovation capability 2. Supervise your suppliers with constant feedback & reports, Get senior managers involved in solving supplier problems
production system & philosophy, JV for knowledge transfer & control 2. Understand how your supplier works: Go, see how your supplier works, respect his capabilities, commit to coprosperity,
1. Turn supplier rivalry into opportunity: create compatible
US Survey -Customer Supplier Practices
World Class Metrics- Improvement cutting across industries
Productivity
• Productivity increase of more than 20% in last 5 years • Manufacturing costs decrease > 10% in last 5 years
Quality- in process
• Finished product first pass yield of 99% • 5 year first pass yield improvement >40%
Quality - costs of failure
• Scrap / rework less than < 1% of sales • Warranty costs of less than <1% of sales.
US Survey – WC Metrics
US Survey – WC Metrics
Europe -mainly UK data
? ?
How do winners do things differently : FIRMS again divided into 3 categories-follow up of LS_IBM study of 900 firms
?
Potential Winners – PW
Room for Improvement- RFI Vulnerable- Vuln
?
?
Manufacturing Best Practices
?
?
? ? ?
Strategy and firm related (SCP) Manufacturing Management related (ODP) Quality management related (ODP) Design Management related (NPD) Employee management related
Strategy and Firm related measures
Manufacturing Management Practices
[Changed colour scheme: PW= white, Vuln=purple]
Quality Management Practices
[Changed colour scheme: PW= white, Vuln=purple]
Design Related Practices
[Changed colour scheme: PW= white, Vuln=purple]
Employee Related Practices
[Changed colour scheme: PW= white, Vuln=purple]
The Winners
?
HERO CYCLES –Lowest cost producer of cycles Bajaj new products in motorcycle category TVS- 25 new models after break up with Suzuki
?
?
?
Indian Auto components industry supplying to world’s best – Ford, GM, Toyota etc.
Indian Industries – Deming award winners
?
?
? ? ? ? ? ?
Sundaram Fasteners Sundaram Clayton Sundaram Brake Linings Indian Rayons_Hi-tech Carbon TVS Motors Rane Mahindra Tractors Tata Steel ……………….
Bharat Forge (order to delivery process –cad/m/e))
Forge capacity of 1.2 lakh tons upgrading to 2.20 lakh tons Worlds largest axle component manufacturer – 25% of world capacity 50% capacity utilization initially Major export thrust with good quality – Toyota, Honda, Daimler Chrysler etc as customers
?
?
? ?
? CAD/CAM/CAE facility capable of online simulation of new products ? Currently 26 -30 % turnover exports ? CSD Germany for Europe thrust
Moser Baer (ODP)
? ? ? ? ?
?
CDRs, DVDRs and variants 760 million units plant Others –CMC –1.5 b, Ritek -2b. Self developed coating machines – 4-5% cost advantage and saving of $40 million Developing variants CDRW and higher capacity DVDRs etc.
Structure of the course
SCM-Make / buy / strategic sourcing
Quality/ Process capability assess & improvement Design of Process
cellular & lean concepts
Supply Chain Management Planning,Inventor y/ MRP/ JIT/Lean Manuf
Design of Products
Process selection, layout
Forecasting and Agg Prod. planning
ERP/IT support to business processes
Plan of This MDP- link to session plan Start: Overview of Manufacturing Best Practices
? ? ? ? ?
? ?
? ?
Designing the Production System Strategic Capacity Management Facility location Product & Service Design Process selection, layout and design – functional/cellular Make vs Buy decision Strategic Sourcing and vendor management SCM : an introduction Project Management
? ? ? ?
?
?
?
Managing the Production System Forecasting Aggregate Planning MRP, Production Planning & Scheduling Quality-Process improvement and Capability assessment VSM- Lean & Cellular Manufacturing Managing supply and demand in an uncertain world
Try for a plant visit to a manufacturing unit YOU try and find an Indian winner in world Manufacturing
My God! …Look at the time!
Can I show some more indian data?
?
?
We now link this to the major decisions we make such as capacity? What are some best practices across the world?
Micro-operations which form the main process
Typology of operations- The 4 Vs of Operations
Linkages of Operations with other functions
The Heritage of Operations Management
Division of labor (Adam Smith 1776 and Charles Babbage 1852) Standardized parts (Whitney 1800)
Scientific Management (Taylor 1881)
Coordinated assembly line (Ford/Sorenson/Avery 1913) Gantt charts (Gantt 1916) Motion study (Frank and Lillian Gilbreth 1922 Quality control (Shewhart 1924; Deming 1950)
Computer (Atanasoff 1938)
CPM/PERT (DuPont 1957)
The Heritage of Operations Management - Continued
Material requirements planning (Orlicky 1960) Computer aided design (CAD 1970) Flexible manufacturing system (FMS 1975) Baldrige Quality Awards (1980) Computer integrated manufacturing (1990) Globalization(1992) Internet (1995)
doc_709659275.pptx
world class manufacturing process, manufacturing model, world class supplier practices, manufacturing management practices, quality management practices.
Manufacturing Management
An Overview
Operations Management – General Model Change is the only constant
What the model involves:
?
?
Inputs: Transformed resources and facilitators and transforming resources Environment for delivering product :
Design & improvement of product ? Design & improvement of transforming Process and Facilities
?
? ? ?
Delivery of products and services to customers Planning and control of manufacturing system Firm’s strategic focus and operations strategy
Core & Support Functions
The three core functions
Significant Events in Operations Management
Significant Events in OM
? ? ?
?
? ? ?
Division of labor (Smith, 1776) Standardized parts (Whitney, 1800) Scientific management (Taylor, 1881) Coordinated assembly line (Ford 1913) Gantt charts (Gantt, 1916) Motion study (the Gilbreths, 1922) Quality control (Shewhart, 1924)
Significant Events - Continued
? ? ? ?
?
?
CPM/PERT (Dupont, 1957) MRP (Orlicky, 1960) CAD Flexible manufacturing systems (FMS) Manufacturing automation protocol (MAP) Computer integrated manufacturing (CIM)
Eli Whitney
? Born 1765; died 1825 ? In 1798, received government contract to make 10,000 muskets ? Showed that machine tools could make standardized parts to exact specifications
?
© 1995 Corel Corp.
Musket parts could be used in any musket
Frederick W. Taylor
? Known as „father of scientific management? ? In 1881, as chief engineer for Midvale Steel, studied how tasks were done & incentives
?
(contr: 1890-1915)
Began first motion & time studies
? Created efficiency principles ? Matching employees to right job ? Providing proper work methods and tools & training
© 1995 Corel Corp.
Frank & Lillian Gilbreth
? Frank (1868-1924); Lillian (1878-1972) ? Husband-and-wife engineering team ? Further developed work measurement methods ? Applied efficiency methods to their
home & 12 children!
? (Book & Movie: “Cheaper by the Dozen,” book: “Bells on Their Toes”)
© 1995 Corel Corp.
Henry Ford
? Born 1863; died 1947 ? In 1903, created Ford Motor Company ? In 1913, first used moving assembly line to make Model T
?
‘Make them all alike!?
Unfinished product moved by conveyor past work station
© 1995 Corel Corp.
? Paid workers very well for 1911 ($5/day!)
W. Edwards Deming
? Born 1900; died 1993 ? Engineer & physicist ? Credited with teaching Japan quality control methods in post-WW2 ? Used statistics to analyze process ? His methods involve workers in decisions
Contributions From
? ?
?
? ? ?
Human factors Industrial engineering Management science Biological science Physical sciences Information science
New Challenges in OM
From To ? Global focus ? Just-in-time ? Supply chain partnering ? Rapid product development, alliances ? Mass customization ? Empowered employees, teams ? Use of IT to cut space and time limitations ? Managing production networks
? ? ? ?
? ?
Local or national focus Batch shipments Low bid purchasing Lengthy product development Standard products Job specialization
Manufacturing Model
Environment
Regulations Currency Fluctuations Cultural Variations Resources Capital People Manufacturing Enterprise Supply Chain Process V Order to Delivery Process Product Development Process Orders/ Cash Products Competitors Products
$
Shareholders
Material
Technology
Customers
A SUPPLY CHAIN
Design & Development Promotion & Sales
R
A W
C
U S T
M A T L S Flows of material, information, money, and knowledge Materials Supply Components Supply
Finished Goods Manufacturing Distribution Warehousing Retailing
O M E R S After-Sales Support Service Centers
Ten Critical Decisions
? ? ?
?
? ? ?
?
Service, product design…………….. Process, capacity design………….. Location …………….………………… Layout design ……………………….. Human resources, job design…….. Supply-chain management………… Inventory management ……………. Scheduling
Ch. 5 Ch. 7, 7S Ch. 8 Ch. 9 Ch. 10, 10S Ch. 11,11s Ch. 12, 14, 16 Ch. 3, 13, 15 Ch. 17 Ch 6
The Critical Decisions
?
Service and product design
What product or service should we offer? ? How should we design these products and services?
?
?
Quality management
Who is responsible for quality? ? How do we define quality?
?
The Critical Decisions Continued
?
Process and capacity design
What processes will these products require and in what order? ? What equipment and technology is necessary for these processes?
?
?
Location
Where should we put the facility ? On what criteria should we base this location decision?
?
The Critical Decisions - Continued
?
Layout design
How should we arrange the facility? ? How large a facility is required?
?
?
Human resources and job design
How do we provide a reasonable work environment? ? How much can we expect our employees to produce?
?
The Critical Decisions Continued
?
Supply chain management
Should we make or buy this item? ? Who are our good suppliers and how many should we have?
?
?
Inventory, material requirements planning,
How much inventory of each item should we have? ? When do we re-order?
?
The Critical Decisions Continued
?
Intermediate, short term, and project scheduling
Is subcontracting production a good idea? ? Are we better off keeping people on the payroll during slowdowns?
?
?
Maintenance
Who is responsible for maintenance? ? When do we do maintenance?
?
Mission
? Mission - where are you going?
Organization?s purpose for being ? Provides boundaries & focus ? Answers „How can we satisfy people?s needs?? ? Expressed in published statement
?
Sample Missions
?
As a service company, our mission is to: Satisfy our customers’ immediate needs and wants by providing them with a wide variety of goods and services at multiple locations (which co?)
The mission of Merck is to provide society with superior products and services - innovations and solutions that improve the quality of life and satisfy customer needs - to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return
?
Factors Affecting Mission
Philosophy & Values Environment Mission Customers Benefit to Society Public Image Profitability & Growth
Mission/Strategy
?
Mission - where you are going Strategy - how you are going to get there
?
Strategy
? Action plan to achieve mission ? Shows how mission will be achieved ? Company has a business strategy ? Functional areas have strategies
© 1995 Corel Corp.
Strategy Process
Company Mission
Business Strategy
Functional Area Functional Area Strategies Marketing Decisions Operations Decisions Fin./Acct. Decisions
?
Differentiation
Competitive Advantage Through:
?
Cost leadership Quick response better, cheaper, more responsive
?
Competing on Differentiation
?
Uniqueness - can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value
Competing on Cost
?
?
Maximum value as perceived by customer Does not imply low value or low quality
Competing on Response
?
?
?
Flexible Reliable Rapid
Requires institutionalization within the firm of the ability to respond
Competing On Any Basis
?
Probably requires the institutionalization within the firm of the ability to change, to adapt
Examples of Distinctive Competencies
Price
Low Cost, Value for money Ginger Hotels, McDonald’s, Low cost airlines, Nano
Quality
High-performance design Sony TV or high quality, Consistent Lexus, Toyota, Mercedes quality Kodak, Motorola (*)
Time Flexibility
Rapid delivery On-time delivery
Variety Volume
Fedex, McDonald’s, One-hour photo, Dominoes
Burger King, Zara Fashion, Nokia?
Service
Location
Superior customer service
Convenience
Disneyland, Ritz Carlton, Taj Group of hotels
Banks, ATMs
OM?s Contribution to Strategy
Operations Decisions
Quality
Product Process Location Layout Human Resource Supply Chain
Pizza Hut?s five-minute guarantee at lunchtime Federal Express?s “absolutely, positively on time”
Examples
Specific Strategy Used
FLEXIBILITY
Competitive Advantage
Sony?s constant innovation of new products Design Compaq Computer?s ability to follow the PC market Volume Southwest Airlines No-frills service
LOW COST
DELIVERY
Speed Dependability
QUALITY
Differentiation (Better) Cost leadership (Cheaper) Response (Faster)
Conformance Motorola?s automotive products ignition systems Motorola?s pagers Performance
Inventory
Scheduling Maintenance
IBM?s after-sale service on mainframe computers AFTER-SALE SERVICE
Fidelity Security?s broad line of mutual funds BROAD PRODUCT LINE
Operations Strategy at Wal-Mart
Wal-Mart Mission Competitive Priority
Provide value for our customers
Low prices, everyday
Operations Strategy Operations Structure
Low inventory levels
Short flow times
Linked communications between stores
Fast transportation system
Enabling Process and Technologies
EDI/satellites
Cross-docking
Focused locations
Operations Strategy at Low cost airlines Easy Jet, Ryan air
Mission Competitive Priority
Low cost airlines
Provide cheap air transport for our customers
Low prices, everyday
Operations Strategy Operations Structure
Single aircraft type
Minimal ground staff/ no food / lugguage handling extra
Longer flying hours
Enabling Process and Technologies
Internet/online tickets
Short hop routes
100% capacity pricing
World Class Manufacturing A survey of global best practices
What differentiates a world class company?
World Class Manufacturing
Competing and Thriving in Global Markets
Global
Exporters
World Class Manufacturers
Markets
Domestic
Local
Multinational Players
Competitors Global
Local
Manufacturing Model
Environment
Regulations Currency Fluctuations Cultural Variations
$
Resources Capital People Material Technology Manufacturing Enterprise Supply Chain Process V Order to Delivery Process Product Development Process Orders/ Cash Products Competitors Products
Shareholders
Customers
World Class Manufacturing – some earlier models
T Q M
J I T
T P M
T Q M
L E A N
C I M
SCHONBERGER
GUNN
World Class Manufacturer – What it takes
World Class Manufacturer
W C. V IS I O N
W C
C ap ac it y
P E O P L E
T E C H N O L O G Y
B e n c h M & C. I.
S U P. C U S. R E L
World class companies : What it takes
Close Customer relationships & expectation mapping
Achieving performance through people
Close Supplier relationships/ Dyads
WCM
S Commitment to self analysis & improvement
World class capacities & VISION
Aggressive approach to technology
World class companies : What it takes
? ? ? ?
?
?
Closer connections to customers Closer relationships/ cooperation with fewer suppliers including new product development. Unwavering commitment to self analysis and improvement Aggressive approach to technologies (in manufacturing processes/ products & in information management etc.) that can help turn visionary strategies into gold medal realities World class capacities (infrastructure) and outlook Striving to meet customer needs and expectations in areas like service, delivery and quality (People- skills and motivation)
World Class Manufacturing – Core Initiatives
Supplier Relationships/ Dyads
Customer relationshipsmeasure
Pursuing Quality & process impr.
WCM
Industry B. P. Benchmarking and C. I.
Aggressively Embracing technology
Achieving performance through people
Let us see what these ideas mean in today’s context
Roadmap to World Class Manufacturing
Integrated Information Systems framework
Better decisions based on Information and Analysis
Analysis & Information Reporting & sales Prod Inv. contrCont Purch Cont Pers. Control Cont Cont Value oriented accounting Personnel A/c Quantity oriented Operative system
Inv a/c
FA a/c
A/c payable
A/c reciev
Production
Engg.
Sales/ marketing Purchase
Personnel
Generating value across the Value Chain(Porter) every process benchmarked to be best in industry
Firm infrastructure Human Resource Management Technology Development Procurement Inbound Operations logistics
Service Marketing & Sales Outbound logistics
Aggressive use of currently available Technologies
Information management tools
Process & Design tools: CAD, CAE, CAPP, PDM, GT, RP, CIM, Forecasting s/w Lean Tools : JIT, 5 S, Takt times, SMED, Visual systems, Work cells, value stream mapping,
Material Processing & Handling tools
Inter Organizational Systems
FMS, AGV, CMS (coordinate Extranet, EDI link to measuring systems), AS/RS, suppliers & customers, Robotic systems, MHS Material tracking: Bar coder, RFID Internet, POS
Decision Making info analysis: DSS, BIW, SCM, APS, EIS, DWDM etc.
ERP, MRP, MES, SCM
Computerized SPC
ERP_SCM links, APO Portals for suppliers and customers
U S Survey – Technology implementation(2002-2006)
U S Survey – Technology Implementation (2002-2006)
?
World Class companies_ customer practices Customer satisfaction surveys Continuous replenishment for customers
?
?
Customers interact with production employees
Enterprise integration with key customers
Customer involvement in new product development
?
?
A major survey of these practices was done using a prior classification of companies into WCM, APP WCM, Somewhat WC, Laggards
? ?
World Class companies_ supplier practices Key suppliers on JIT basis Suppliers – contract continuous price reduction Suppliers contract on total cost not unit cost Suppliers involved in NPD
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Vendor managed inventory
A major survey of these practices was done using a prior classification of companies into WCM, APP WCM, Somewhat WC, Laggards (After one slide)
World Class companies_ supplier best practices
1. Conduct Joint improvement activities, share best practices 2. Share information – in structured format 1. Develop supplier technical skills: Build supplier’s problem solving skills, Innovation capability 2. Supervise your suppliers with constant feedback & reports, Get senior managers involved in solving supplier problems
production system & philosophy, JV for knowledge transfer & control 2. Understand how your supplier works: Go, see how your supplier works, respect his capabilities, commit to coprosperity,
1. Turn supplier rivalry into opportunity: create compatible
US Survey -Customer Supplier Practices
World Class Metrics- Improvement cutting across industries
Productivity
• Productivity increase of more than 20% in last 5 years • Manufacturing costs decrease > 10% in last 5 years
Quality- in process
• Finished product first pass yield of 99% • 5 year first pass yield improvement >40%
Quality - costs of failure
• Scrap / rework less than < 1% of sales • Warranty costs of less than <1% of sales.
US Survey – WC Metrics
US Survey – WC Metrics
Europe -mainly UK data
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How do winners do things differently : FIRMS again divided into 3 categories-follow up of LS_IBM study of 900 firms
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Potential Winners – PW
Room for Improvement- RFI Vulnerable- Vuln
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Manufacturing Best Practices
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Strategy and firm related (SCP) Manufacturing Management related (ODP) Quality management related (ODP) Design Management related (NPD) Employee management related
Strategy and Firm related measures
Manufacturing Management Practices
[Changed colour scheme: PW= white, Vuln=purple]
Quality Management Practices
[Changed colour scheme: PW= white, Vuln=purple]
Design Related Practices
[Changed colour scheme: PW= white, Vuln=purple]
Employee Related Practices
[Changed colour scheme: PW= white, Vuln=purple]
The Winners
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HERO CYCLES –Lowest cost producer of cycles Bajaj new products in motorcycle category TVS- 25 new models after break up with Suzuki
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Indian Auto components industry supplying to world’s best – Ford, GM, Toyota etc.
Indian Industries – Deming award winners
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Sundaram Fasteners Sundaram Clayton Sundaram Brake Linings Indian Rayons_Hi-tech Carbon TVS Motors Rane Mahindra Tractors Tata Steel ……………….
Bharat Forge (order to delivery process –cad/m/e))
Forge capacity of 1.2 lakh tons upgrading to 2.20 lakh tons Worlds largest axle component manufacturer – 25% of world capacity 50% capacity utilization initially Major export thrust with good quality – Toyota, Honda, Daimler Chrysler etc as customers
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? CAD/CAM/CAE facility capable of online simulation of new products ? Currently 26 -30 % turnover exports ? CSD Germany for Europe thrust
Moser Baer (ODP)
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CDRs, DVDRs and variants 760 million units plant Others –CMC –1.5 b, Ritek -2b. Self developed coating machines – 4-5% cost advantage and saving of $40 million Developing variants CDRW and higher capacity DVDRs etc.
Structure of the course
SCM-Make / buy / strategic sourcing
Quality/ Process capability assess & improvement Design of Process
cellular & lean concepts
Supply Chain Management Planning,Inventor y/ MRP/ JIT/Lean Manuf
Design of Products
Process selection, layout
Forecasting and Agg Prod. planning
ERP/IT support to business processes
Plan of This MDP- link to session plan Start: Overview of Manufacturing Best Practices
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Designing the Production System Strategic Capacity Management Facility location Product & Service Design Process selection, layout and design – functional/cellular Make vs Buy decision Strategic Sourcing and vendor management SCM : an introduction Project Management
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Managing the Production System Forecasting Aggregate Planning MRP, Production Planning & Scheduling Quality-Process improvement and Capability assessment VSM- Lean & Cellular Manufacturing Managing supply and demand in an uncertain world
Try for a plant visit to a manufacturing unit YOU try and find an Indian winner in world Manufacturing
My God! …Look at the time!
Can I show some more indian data?
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We now link this to the major decisions we make such as capacity? What are some best practices across the world?
Micro-operations which form the main process
Typology of operations- The 4 Vs of Operations
Linkages of Operations with other functions
The Heritage of Operations Management
Division of labor (Adam Smith 1776 and Charles Babbage 1852) Standardized parts (Whitney 1800)
Scientific Management (Taylor 1881)
Coordinated assembly line (Ford/Sorenson/Avery 1913) Gantt charts (Gantt 1916) Motion study (Frank and Lillian Gilbreth 1922 Quality control (Shewhart 1924; Deming 1950)
Computer (Atanasoff 1938)
CPM/PERT (DuPont 1957)
The Heritage of Operations Management - Continued
Material requirements planning (Orlicky 1960) Computer aided design (CAD 1970) Flexible manufacturing system (FMS 1975) Baldrige Quality Awards (1980) Computer integrated manufacturing (1990) Globalization(1992) Internet (1995)
doc_709659275.pptx