What is Operations Management?
Operations Management deals with the design and management of products, processes,
services and supply chains. It considers the acquisition, development, and utilization of
resources that firms need to deliver the goods and services their clients want.
The purvey of OM ranges from strategic to tactical and operational levels.
Representative strategic issues include
determining the size and location of manufacturing plants,
deciding the structure of service or telecommunications networks, and designing technology
supply chains.
Tactical issues include
plant layout and structure, project management methods, and equipment selection and
replacement. Operational issues include production scheduling and control, inventory
management, quality control and inspection, traffic and materials handling, and equipment
maintenance policies. ***********
Operations management
From Wikipedia, the free encyclopedia
Jump to: navigation, search
Operations management is an area of management concerned with overseeing, designing,
controlling the process of production and redesigning business operations in the production of
goods and/or services. It involves the responsibility of ensuring that business operations are
efficient in terms of using as few resources as needed, and effective in terms of meeting
customer requirements. It is concerned with managing the process that converts inputs (in the
forms of materials, labor, and energy) into outputs (in the form of goods and/or services). The
relationship of operations management to senior management in commercial contexts can be
compared to the relationship of line officers to highest-level senior officers in military
science. The highest-level officers shape the strategy and revise it over time, while the line
officers make tactical decisions in support of carrying out the strategy. In business as in
military affairs, the boundaries between levels are not always distinct; tactical information
dynamically informs strategy, and individual people often move between roles over time.
According to the U.S. Department of Education, operations management is the field
concerned with managing and directing the physical and/or technical functions of a firm or
organization, particularly those relating to development, production, and manufacturing.
Operations management programs typically include instruction in principles of general
management, manufacturing and production systems, plant management, equipment
maintenance management, production control, industrial labor relations and skilled trades
supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost
control, and materials planning.[1][2] Management, including operations management, is like
engineering in that it blends art with applied science. People skills, creativity, rational
analysis, and knowledge of technology are all required for success
FOUR TYPES OF LAYOUTS FOR
MANUFACTURING OPERATION AND
ADVANTAGES
Photo by: iQoncept
In manufacturing, facility layout consists of configuring the plant site with lines,
buildings, major facilities, work areas, aisles, and other pertinent features such as
department boundaries. While facility layout for services may be similar to that for
manufacturing, it also may be somewhat different—as is the case with offices,
retailers, and warehouses. Because of its relative permanence, facility layout
probably is one of the most crucial elements affecting efficiency. An efficient layout
can reduce unnecessary material handling, help to keep costs low, and maintain
product flow through the facility.
Firms in the upper left-hand corner of the product-process matrix have a process
structure known as a jumbled flow or a disconnected or intermittent line flow.
Upper-left firms generally have a process layout. Firms in the lower right-hand
corner of the product-process matrix can have a line or continuous flow. Firms in the
lower-right part of the matrix generally have a product layout. Other types of layouts
include fixed-position, combination, cellular, and certain types of service layouts.
PROCESS LAYOUT
Process layouts are found primarily in job shops, or firms that produce customized,
low-volume products that may require different processing requirements and
sequences of operations. Process layouts are facility configurations in which
operations of a similar nature or function are grouped together. As such, they
occasionally are referred to as functional layouts. Their purpose is to process goods
or provide services that involve a variety of processing requirements. A
manufacturing example would be a machine shop. A machine shop generally has
separate departments where general-purpose machines are grouped together by
function (e.g., milling, grinding, drilling, hydraulic presses, and lathes). Therefore,
facilities that are configured according to individual functions or processes have a
process layout. This type of layout gives the firm the flexibility needed to handle a
variety of routes and process requirements. Services that utilize process layouts
include hospitals, banks, auto repair, libraries, and universities.
Improving process layouts involves the minimization of transportation cost, distance,
or time. To accomplish this some firms use what is known as a Muther grid, where
subjective information is summarized on a grid displaying various combinations of
department, work group, or machine pairs. Each combination (pair), represented by
an intersection on the grid, is assigned a letter indicating the importance of the
closeness of the two (A = absolutely necessary; E = very important; I = important; O
= ordinary importance; U = unimportant; X = undesirable). Importance generally is
based on the shared use of facilities, equipment, workers or records, work flow,
communication requirements, or safety requirements. The departments and other
elements are then assigned to clusters in order of importance.
Advantages of process layouts include:
Flexibility. The firm has the ability to handle a variety of processing
requirements.
Cost. Sometimes, the general-purpose equipment utilized may be less costly to
purchase and less costly and easier to maintain than specialized equipment.
Motivation. Employees in this type of layout will probably be able to perform a
variety of tasks on multiple machines, as opposed to the boredom of
performing a repetitive task on an assembly line. A process layout also allows
the employer to use some type of individual incentive system.
System protection. Since there are multiple machines available, process
layouts are not particularly vulnerable to equipment failures.
Disadvantages of process layouts include:
Utilization. Equipment utilization rates in process layout are frequently very
low, because machine usage is dependent upon a variety of output
requirements.
Cost. If batch processing is used, in-process inventory costs could be high.
Lower volume means higher per-unit costs. More specialized attention is
necessary for both products and customers. Setups are more frequent, hence
higher setup costs. Material handling is slower and more inefficient. The span
of supervision is small due to job complexities (routing, setups, etc.), so
supervisory costs are higher. Additionally, in this type of layout accounting,
inventory control, and purchasing usually are highly involved.
Confusion. Constantly changing schedules and routings make juggling process
requirements more difficult.
PRODUCT LAYOUT
Product layouts are found in flow shops (repetitive assembly and process or
continuous flow industries). Flow shops produce high-volume, highly standardized
products that require highly standardized, repetitive processes. In a product layout,
resources are arranged sequentially, based on the routing of the products. In theory,
this sequential layout allows the entire process to be laid out in a straight line, which
at times may be totally dedicated to the production of only one product or product
version. The flow of the line can then be subdivided so that labor and equipment are
utilized smoothly throughout the operation.
Two types of lines are used in product layouts: paced and unpaced. Paced lines can
use some sort of conveyor that moves output along at a continuous rate so that
workers can perform operations on the product as it goes by. For longer operating
times, the worker may have to walk alongside the work as it moves until he or she is
finished and can walk back to the workstation to begin working on another part (this
essentially is how automobile manufacturing works).
On an unpaced line, workers build up queues between workstations to allow a
variable work pace. However, this type of line does not work well with large, bulky
products because too much storage space may be required. Also, it is difficult to
balance an extreme variety of output rates without significant idle time. A technique
known as assembly-line balancing can be used to group the individual tasks
performed into workstations so that there will be a reasonable balance of work
among the workstations.
Product layout efficiency is often enhanced through the use of line balancing. Line
balancing is the assignment of tasks to workstations in such a way that workstations
have approximately equal time requirements. This minimizes the amount of time
that some workstations are idle, due to waiting on parts from an upstream process or
to avoid building up an inventory queue in front of a downstream process.
Advantages of product layouts include:
Output. Product layouts can generate a large volume of products in a short
time.
Cost. Unit cost is low as a result of the high volume. Labor specialization
results in reduced training time and cost. A wider span of supervision also
reduces labor costs. Accounting, purchasing, and inventory control are
routine. Because routing is fixed, less attention is required.
Utilization. There is a high degree of labor and equipment utilization.
Disadvantages of product layouts include:
Motivation. The system's inherent division of labor can result in dull,
repetitive jobs that can prove to be quite stressful. Also, assembly-line layouts
make it very hard to administer individual incentive plans.
Flexibility. Product layouts are inflexible and cannot easily respond to
required system changes—especially changes in product or process design.
System protection. The system is at risk from equipment breakdown,
absenteeism, and downtime due to preventive maintenance.
FIXED-POSITION LAYOUT
A fixed-position layout is appropriate for a product that is too large or too heavy to
move. For example, battleships are not produced on an assembly line. For services,
other reasons may dictate the fixed position (e.g., a hospital operating room where
doctors, nurses, and medical equipment are brought to the patient). Other fixed-
position layout examples include construction (e.g., buildings, dams, and electric or
nuclear power plants), shipbuilding, aircraft, aerospace, farming, drilling for oil,
home repair, and automated car washes. In order to make this work, required
resources must be portable so that they can be taken to the job for "on the spot"
performance.
Due to the nature of the product, the user has little choice in the use of a fixed-
position layout. Disadvantages include:
Space. For many fixed-position layouts, the work area may be crowded so that
little storage space is available. This also can cause material handling
problems.
Administration. Oftentimes, the administrative burden is higher for fixed-
position layouts. The span of control can be narrow, and coordination
difficult.
COMBINATION LAYOUTS
Many situations call for a mixture of the three main layout types. These mixtures are
commonly called combination or hybrid layouts. For example, one firm may utilize a
process layout for the majority of its process along with an assembly in one area.
Alternatively, a firm may utilize a fixed-position layout for the assembly of its final
product, but use assembly lines to produce the components and subassemblies that
make up the final product (e.g., aircraft).
CELLULAR LAYOUT
Cellular manufacturing is a type of layout where machines are grouped according to
the process requirements for a set of similar items (part families) that require similar
processing. These groups are called cells. Therefore, a cellular layout is an equipment
layout configured to support cellular manufacturing.
Processes are grouped into cells using a technique known as group technology (GT).
Group technology involves identifying parts with similar design characteristics (size,
shape, and function) and similar process characteristics (type of processing required,
available machinery that performs this type of process, and processing sequence).
Workers in cellular layouts are cross-trained so that they can operate all the
equipment within the cell and take responsibility for its output. Sometimes the cells
feed into an assembly line that produces the final product. In some cases a cell is
formed by dedicating certain equipment to the production of a family of parts
without actually moving the equipment into a physical cell (these are called virtual or
nominal cells). In this way, the firm avoids the burden of rearranging its current
layout. However, physical cells are more common.
An automated version of cellular manufacturing is the flexible manufacturing system
(FMS). With an FMS, a computer controls the transfer of parts to the various
processes, enabling manufacturers to achieve some of the benefits of product layouts
while maintaining the flexibility of small batch production.
Some of the advantages of cellular manufacturing include:
Cost. Cellular manufacturing provides for faster processing time, less material
handling, less work-in-process inventory, and reduced setup time, all of which
reduce costs.
Flexibility. Cellular manufacturing allows for the production of small batches,
which provides some degree of increased flexibility. This aspect is greatly
enhanced with FMSs.
Motivation. Since workers are cross-trained to run every machine in the cell,
boredom is less of a factor. Also, since workers are responsible for their cells'
output, more autonomy and job ownership is present.
OTHER LAYOUTS
In addition to the aforementioned layouts, there are others that are more appropriate
for use in service organizations. These include warehouse/storage layouts, retail
layouts, and office layouts.
With warehouse/storage layouts, order frequency is a key factor. Items that are
ordered frequently should be placed close together near the entrance of the facility,
while those ordered less frequently remain in the rear of the facility. Pareto analysis
is an excellent method for determining which items to place near the entrance. Since
20 percent of the items typically represent 80 percent of the items ordered, it is not
difficult to determine which 20 percent to place in the most convenient location. In
this way, order picking is made more efficient.
While layout design is much simpler for small retail establishments (shoe repair, dry
cleaner, etc.), retail stores, unlike manufacturers, must take into consideration the
presence of customers and the accompanying opportunities to influence sales and
customer attitudes. For example, supermarkets place dairy products near the rear of
the store so that customers who run into the store for a quick gallon of milk must
travel through other sections of the store. This increases the chance of the customer
seeing an item of interest and making an impulse buy. Additionally, expensive items
such as meat are often placed so that the customer will see them frequently (e.g., pass
them at the end of each aisle). Retail chains are able to take advantage of
standardized layouts, which give the customer more familiarity with the store when
shopping in a new location.
Office layouts must be configured so that the physical transfer of information
(paperwork) is optimized. Communication also can be enhanced through the use of
low-rise partitions and glass walls.
A number of changes taking in place in manufacturing have had a direct effect on
facility layout. One apparent manufacturing trend is to build smaller and more
compact facilities with more automation and robotics. In these situations, machines
need to be placed closer to each other in order to reduce material handling. Another
trend is an increase in automated material handling systems, including automated
storage and retrieval systems (AS/AR) and automated guided vehicles (AGVs). There
also is movement toward the use of U-shaped lines, which allow workers, material
handlers, and supervisors to see the entire line easily and travel efficiently between
workstations. So that the view is not obstructed, fewer walls and partitions are
incorporated into the layout. Finally, thanks to lean manufacturing and just-in-time
production, less space is needed for inventory storage throughout the layout.
