981 Chap12 Biz Operations And Materials (Final)

Lecture 12

Operations and Materials Management: Managing the Production and Flow of

Goods and Services

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

1. Describe the nature of the operations and materials management process and explain how it builds competitive advantage and profitability.

2. Identify the five main components of operations and materials management costs and the methods companies use to reduce them.

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

3. Differentiate three major kinds of operating systems companies use to produce goods and services.

4. Understand total quality management (TQM) can significantly improve both quality and productivity.

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

5. Describe three materials management methods companies use to improve the flow of resources into and out of the production system and increase operations efficiency.

CEO for UTCUnited Technologies

Corp.

• 2000, One of the most profitable companies in the world.

• Process disciplines• From Otis to UTC• UTC is on Top of its

Games• Achieving

Competitive Excellence

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Materials Management•Includes the activities necessary to find and purchase high-quality raw materials or low-cost components and deliver them to operations as efficiently as possible

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Operations and Materials Management Process

•Input Stage •Operations Stage

•Output Stage

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Operations and Materials Management Process

• Input Stage Raw materialsComponentsLaborCustomers

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Operations and Materials Management Process

• Operations Stage SkillsKnowledgeMachinesExperts

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Developing expertise in OMM activities

Superior productivityQuality innovationResponsiveness to customers

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Operating Systems• Mass production is based on the use of

automated machines and SOP’s to control the work process

• Companies operate mass production systems to manufacture large quantities of standardized products to reduce operating costs

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Total Quality Management• An operations technique for continuous improvement

to increase quality and reduce costs• TQM can be used to improve the efficiency and

effectiveness of any operating system

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services

Materials Management Methods

• To build competitive advantage -Computer aided materials managementGlobal supply chain managementJust-in-time inventory systems

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Chapter 12Operations and Materials Management: Managing

the Production and Flow of Goods and Services