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Table (cont.) 169。 2022 Prentice Hall, Inc. 1 – 27 Eli Whitney ?Born 1765。 Movie: “Cheaper by the Dozen,” book: “Bells on Their Toes” 169。 2022 Prentice Hall, Inc. 1 – 36 Characteristics of Service ? Intangible product ? Produced and consumed at same time ? Often unique ? High customer interaction ? Inconsistent product definition ? Often knowledgebased ? Frequently dispersed 169。 Electric, American Airlines, Santa Fe ., Roadway Express Table 169。 public and global review of ethics。 2022 Prentice Hall, Inc. 1 – 55 Productivity Calculations Productivity = Units produced Laborhours used = = 4 units/laborhour 1,000 250 Labor Productivity One resource input ? singlefactor productivity 169。 2022 Prentice Hall, Inc. 1 – 63 Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640/day Overhead = $400/day Old System: 14 titles/day Overhead = $800/day New System: 8 titles/day $640 + 400 = Old multifactor productivity = New multifactor productivity = .0077 titles/dollar 14 titles/day $640 + 800 169。 2022 Prentice Hall, Inc. 1 – 71 Productivity at Taco Bell Improvements: ? Revised the menu ? Designed meals for easy preparation ? Shifted some preparation to suppliers ? Efficient layout and automation ? Training and employee empowerment 169。 2022 Prentice Hall, Inc. 1 – 67 Key Variables for Improved Labor Productivity ? Basic education appropriate for the labor force ? Diet of the labor force ? Social overhead that makes labor available ? Maintaining and enhancing skills in the midst of rapidly changing technology and knowledge 169。 2022 Prentice Hall, Inc. 1 – 59 Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640/day Overhead = $400/day Old System: 14 titles/day Overhead = $800/day New System: 8 titles/day 32 laborhrs = Old labor productivity = New labor productivity = .25 titles/laborhr 14 titles/day 32 laborhrs 169。 2022 Prentice Hall, Inc. 1 – 51 Feedback loop Outputs Goods and services Processes The . economic system transforms inputs to outputs at about an annual % increase in productivity per year. The productivity increase is the result of a mix of capital (38% of %), labor (10% of %), and management (52% of %). The Economic System Inputs Labor, capital, management Figure 169。 2022 Prentice Hall, Inc. 1 – 47 New Trends in OM Lengthy product development Shorter life cycles, Inter, rapid international munication, puteraided design, and international collaboration Rapid product development, alliances, collaborative designs Standardized products Affluence and worldwide markets。 2022 Prentice Hall, Inc. 1 – 40 120 – 100 – 80 – 60 – 40 – 20 – 0 – | | | | | | | 1950 1970 1990 2022 (est) 1960 1980 2022 Employment (millions) Manufacturing and Service Employment Figure (A) Manufacturing Service 169。 died 1993 ?Engineer and physicist ?Credited with teaching Japan quality control methods in postWW2 ?Used statistics to analyze process ?His methods involve workers in decisions 169。 2022 Prentice Hall, Inc. 1 – 29 Taylor?s Principles ? Matching employees to right job ? Providing the proper training ? Providing proper work methods and tools ? Establishing legitimate incentives for work to be acplished Management Should Take More Responsibility for: 169。 2022 Prentice Hall, Inc. 1 – 25 The Heritage of OM ? Division of labor (Adam Smith 1776。 2022 Prentice Hall, Inc. 1 – 17 The Critical Decisions ?Design of goods and services ? What good or service should we offer? ? How should we design these products and services? ?Managing quality ? How do we define quality? ? Who is responsible for quality? Table (cont.) 169。 maintenance Production and inventory control Scheduling。 2022 Prentice Hall, Inc. 1 – 5 Learning Objectives When you plete this chapter you should be able to: 1. Define operations management 2. Explain the distinction between goods and services 3. Explain the difference between production and productivity 169。 2022 Prentice Hall, Inc. 1 – 2 Outline ?Global Company Profile: Hard Rock Cafe ?What Is Operations Management? ?Organizing to Produce Goods and Services ?Why Study OM? ?What Operations Managers Do ? How This Book Is Organized 169。 2022 Prentice Hall, Inc. 1 – 10 Organizational Charts Operations Teller Scheduling Check Clearing Collection Transaction processing Facilities design/layout Vault operations Maintenance Security Finance Investments Security Real estate Accounting Auditing Marketing Loans Commercial Industrial Financial Personal