lecture 8 4th september

7/23/2019 Lecture 8 4th September

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LE CTURE 8

PRODUCTION AND

OPERATIONS MANAGEMENT


2/15

LECTURE 8: MODULE 2

PRODUCTIVITY


3/15

INTRODUCTION


4/15

INTRODUCTION TO PRODUCTIVITY

Principals of scientic managementPublished in 1911

Opens ith a discussion of Theodore Roose!elt"s address about impro!ing national

e#cienc$ and ma%ing more producti!e use of limited resources

&'e can see and feel the aste of material things( )%ard* ine#cient* or ill+directed mo!ements of men* hoe!er* lea!e nothing !isible or tangible behind,

&Emplo$ers deri!e their %noledge of ho much of a gi!en class of or% can bedone in a da$ from either their on e-perience* hich has fre.uentl$ gron ha/$

ith age* from casual and uns$stematic obser!ation of their men* or at best fromrecords 0((,

&This or% is so crude and elementar$ in its nature that the riter rml$ belie!esthat it ould be possible to train an intelligent gorilla so as to become a moree#cient pig+iron handler than an$ man can be,

Often* 2- producti!it$ impro!ements ere obtained through aste reduction*


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FORMAL DEFINITIONS

Basic definition of productivityProductivity = Units Output produced / Input used

Example: Labor productivityLabor productivity = 4 units per labor hour (looks a lot like an processing time)

Multifactor productivityProductivity = Output / (apital! " Labor! " #aterials! " $ervices! " %nergy!)

Waste and InefficienciesOutput& productive time' input& total time$ome measures o productivity have natural limits (eg labor time* energy)+hat reduces productivity,


6/15

Responsiveness

Lo-

.igh

%liminateineiciencies

urrent rontierIn the industry

Labor Productivity(e.. !"call#

Lo- laborproductivity

.igh laborproductivity

Competitor A

Competitor C

Competitor B

here e0ists a tension bet-een productivity and responsiveness

%icient rontier

THE EFFICIENT FRONTIER

Competitor D


7/15

THE SEVEN SOURCES OF WASTE


8/15Prof. $%ristian &er'iesc%

123 kg o ood are trashed by the averageerman

325 o the trashing happens by households

Large package si6es is the main reason

Overproduction

Matc% upply 'it%)emand

Matc% upply 'it%)emand

&o produce sooner or in reater *uantities t%an'%at customers demand

Overproduced items need to be stored (inventory)and create urther -aste 7ad or inventory turns Products become obsolete / get stolen / etc

&o produce sooner or in reater *uantities t%an'%at customers demand

Overproduced items need to be stored (inventory)and create urther -aste 7ad or inventory turns Products become obsolete / get stolen / etc

Examples



rabs ished in the 8orth $ea

$hipped 9*:;;km $outh to #orocco

Produced in #orocco

$hipped back to ermany

ransportationExamples

Relocate processes+t%en introducestandard se*uencesfor transportation

Relocate processes+t%en introducestandard se*uencesfor transportation

,nnecessary movement of parts or peoplebet'een processes%0ample& 7uilding a dining room and kitchen at

opposite ends o a house* then keeping it that-ay



)



Beeping a patient in the hospital longerthan -hat is medically reAuired

OverCprocessingExamples

Provide clear+customer2drivenstandards forevery process

Provide clear+customer2drivenstandards forevery process

Processin beyond '%at t%e customer re*uires%0ample& $tirring a ully mi0ed cup o coee

#ay result rom internal standards that do not relecttrue customer reAuirements#ay be an undesirable eect o an operatorDs pridein his -ork

Processin beyond '%at t%e customer re*uires%0ample& $tirring a ully mi0ed cup o coee

#ay result rom internal standards that do not relecttrue customer reAuirements#ay be an undesirable eect o an operatorDs pridein his -ork



%rgonomics

Look at great athletes

#otionExamples

-rrane people and partsaround stations 'it% 'or/content t%at%as been standardied tominimie motion

-rrane people and partsaround stations 'it% 'or/content t%at%as been standardied tominimie motion

,nnecessary movement of parts or people 'it%ina process

%0ample& Locating (and keeping) a rerigeratoroutside the kitchen



Loan applications at a bank

Inventory

Examples

Improve productioncontrol system andcommit to reduceunnecessary 3comfortstoc/s4

Improve productioncontrol system andcommit to reduceunnecessary 3comfortstoc/s4

5umber of flo' units in t%e system

Product has to lo- like -ater> Eor physical products* categori6ed in& ra- material*+IP* or inished products

Increases inventory costs (bad or inventory turns) Increases -ait time (see above) as -ell as

the customer lo- time Oten times* reAuires substantial real estate

=F the 7I%$ orm o -aste

5umber of flo' units in t%e system

Product has to lo- like -ater> Eor physical products* categori6ed in& ra- material*+IP* or inished products

Increases inventory costs (bad or inventory turns) Increases -ait time (see above) as -ell as

the customer lo- time Oten times* reAuires substantial real estate

=F the 7I%$ orm o -aste


14/15Prof. $%ristian &er'iesc%24

Oten* the time in the -aiting room e0ceedsthe treatment time by more than :0

+aitingExamples

,nderstand t%e driversof 'aitin6 more inResponsivenessmodule

,nderstand t%e driversof 'aitin6 more inResponsivenessmodule

,nderutiliin people or parts '%ile a processcompletes a 'or/ cycle%0ample& @rriving an hour early or a meeting

Labor utili6ationIdle time

8ote&-+aiting can happen at the resource (idle time)-7ut also at the customer level (long lo- time)

,nderutiliin people or parts '%ile a processcompletes a 'or/ cycle%0ample& @rriving an hour early or a meeting

Labor utili6ationIdle time

8ote&-+aiting can happen at the resource (idle time)-7ut also at the customer level (long lo- time)


15/15Prof $%ristian &er'iesc%

+asteul vs Leanhe I#GP $tudies

eneral #otors Eramingham @ssembly Plant Gersus /oyota /akaoka @ssembly Plant* 2H13

7M 8ramin%am &oyota &a/ao/a

ross @ssembly .ours per ar 4; 21

@ssembly Jeects per 2;; ars 2K; 4:

@ssembly $pace per ar 12 41

Inventories o Parts (average) 9 -eeks 9 hours

ross assembly hours per car are calculated by dividing total hours o eort in the plant by the total number o cars produced

Jeects per car -ere estimated rom the LJ Po-er Initial Muality $urvey or 2H1

@ssembly $pace per ar is sAuare eet per vehicle per year* corrected or vehicle si6e

Inventories o Parts are a rough average or ma?or parts

$ource& +omack et al

lecture 8 4th september

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