UCL

ESPO/IAG/POMS

PROD 2800PRODUCTION AND OPERATIONS MANAGEMENTGestion de la production et des opérations

Per AGRELLagrell@poms.ucl.ac.be

Lecture 1

UCL

ESPO/IAG/POMS

PROD 28002

Outline

Presentation– Instructor– Course outline– Grouping

What is OM?Processes and productsManufacturing Strategy

PROD 28003

Course outline

Operations Strategy L 2 E 2– Competition, positioning, strategic trade-offs

Product and Process Design L 6 E 2– Process analysis, project design, quality

Planning and Control Methodology L 12 E 6– Long-range, medium-range and short-range planning

Supply Chain Design L 6 E 4– Inter-firm coordination, theory of constraints, chain

design

PROD 28004

Learning methods

Text bookLectures 26 h

– On-line material– Readings– Assignments

Exercise sessions 14 h– Cases

Case SummaryCase PresentationCase Report

www.poms.ucl.ac.be

PROD 28005

What is operations management?

Operations Management– Production (transformation) system

PhysicalLocationalExchangeStoragePhysiologicalInformational

– System design, operation, improvement– Systematic analysis of organizational processes

Services and goods

PROD 28006

Core services

Basic service dimensions

operationsmanagement

FLEXIBILITY

COST

DELIVERY

QUALITY

PROD 28007

Value-added services

operationsmanagement

INFORMATION

CONSULTANCY

SALES SUPPORT

FIELDSUPPORTDifferentiating

service dimensions

PROD 28008

Operations strategy

1. Business objectives2. Market strategy3. How are orders won on the market?4. Choice of technology5. Infrastructure

PROD 28009

Order qualifiers and order winners

Order qualifiers– Qualifies the firm as a potential vendor

Order winners– Successfully differentiates the firm for competitors

PROD 280010

Competitive dimensions

PriceQuality

– Conformance

Delivery– Speed– Reliability

Flexibility– Volume flexibility– Product flexibility– Mix flexibility

DesignValue-added services

PROD 280011

Manufacturing strategy

1. Market segmentation in product groups2. Market assessment per group3. Find Qualifiers and Winners for each group.4. Translate Winners into process requirements.

PROD 280012

Process dimensions

Process Requirements– Process Type– Order Regime

Core Capabilities

PROD 280013

Process flow classification

ProjectJobbingBatchLineContinuous processing

PROD 280014

Production order regimes

Design to order (DTO)– Specific design and manufacture for all customers

Engineer to order (ETO)– Changes to standard products are offered and

produced

Make to order (MTO)– Production of standard product on receipt of

order/call-off

Assemble to order (ATO)– Components MTS. Assembly made on receipt of order.

Make to stock (MTS)– Production to forecast. Order met from inventory.

PROD 280015

Product-process matrix

IV.Continuous

Flow

III.Assembly

Line

II.Batch

I.Job

Shop

LowVolume,One of a

Kind

MultipleProducts,

LowVolume

FewMajor

Products,HigherVolume

HighVolume,

HighStandard-

ization

Le Prof

cafe

Le Sablon

SugarRefinery

Flexibility (High)Unit Cost (High)

Flexibility (Low)Unit Cost (Low)

PROD 280016

Process positioning

Horizontal Integration– Vendors– Joint ventures

Vertical Integration

The Virtual Enterprise?

PROD 280017

Implications of process choice

Products and Markets– Type of product– Product range– Customer order size– Rate of product

introductions– Order winners?– Order qualifiers?

Manufacturing– Nature of process

technology– Focus

Investment and Cost– Level of capital

investment– Level of inventory– Level of WIP– Cost drivers

Infrastructure– Organizational control– Organizational style– Required support

expertise

PROD 280018

Strategic fit

CommitmentCommunicationCredibilityCoherenceFocused manufacturingPWP

PROD 280019

Examples

Sports car market– European, road-use, private

Competition– Porsche– Ferrari– Jensen– Honda etc.

PROD 280020

OM challenges

BundlingValue-added focus

Ex: AutomotiveYesterday Today TomorrowCar Car + maint. Transport.

Maintenance

PROD 280021

Recapitulation

Definition of OMManufacturing strategy (Hill)

– OQ, OW, process choice, implications

Product-Process Matrix (Hayes-Wheelwright)Strategic fit (Skinner)

– Focus, PWP

Service operations strategy– Bundling, integration, disintermediation