om1-4Metrics, Also referred to as KPI(Key Performance Indicators)•What is the MOST IMPORTANTmeasurement in Operations?–CUSTOMER SERVICE!•What is the second mostimportant metric inOperations?–COST!
om1-5Conflicts in OperationsMgt.Copyright DHS & Assoc. LLC 2017•Most important metrics are–Customer Service–Cost•High inventory or veryflexible capacity can oftensupport high customerservice•High inventory or veryflexible capacity can oftencause higher cost however!
omERP (EnterpriseResource Planning)•ERP is not a computer system to managea company•ERP is a process of planning andexecution involving integrated functionswithin the business.•The ERP computer system is a tool tomore easily accomplish the ERP systemintegrationCopyright DHS & Assoc. LLC20176
om1-7Why Plan?•Customer demand variation•Competition and associated variation•Technology and associated variation•Manufacturing and service process variation•Other variation?•The main tools beyond market insight are flexibilityand responsiveness (speed)–Buffer capacity for agility–Buffer inventory for responsiveness80% of Operations Managementis PLANNING!There isan enormous amountof variation in Ops MgtStopped here
Offshoring•Offshoring refers to sourcing from overseas orgetting work done in a foreign country.•China has now become the preeminent source oflow-cost offshore manufacturing.•The benefits of offshoring include being able to tap alarger pool of skilled people, get work done faster,and lower a company’s labor costs.•Risks of offshoring include transfer of jobs to othercountries, geopolitical risk, language differences, andpoor communication.8Venkataraman & Pinto, Operations Management, 1e. SAGE, 2018.
Outsourcing•Outsourcing refers to contracting with a third party oran external company to manufacture a good ordeliver a service.•