SCM303 Chapter 3 Slides

SCM303 Chapter 3 Slides - Managing Processes and...

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1 The Eli Broad College of Business, Michigan State University, 2011 Managing Processes and Capabilities Managing Processes and Capabilities
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2 The Eli Broad College of Business, Michigan State University, 2011 A system of structured activities that use resources to turn inputs into valuable outputs . Process thinking views activities in an organization as a collection of processes What is a process?
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3 The Eli Broad College of Business, Michigan State University, 2011 Managers Deal With Many Processes Innovation Procurement Manufacturing Order fulfillment Accounts Payable Hiring Etc.
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4 The Eli Broad College of Business, Michigan State University, 2011 Thinking About Resources: Things Used to Perform Process Activities People Machines Space Brainpower etc.
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5 The Eli Broad College of Business, Michigan State University, 2011 Capacity is Simple-But Complex Every Resource and Every Activity and Process in the Supply Chain has a “Capacity” Machines Labor Land/Buildings Production lines Vehicles Etc. In general, “Capacity” is nothing more than the maximum output of a process or a resource in a period of time. However, sometimes it is thought of as the amount of a resource that is available (an input measure).
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6 The Eli Broad College of Business, Michigan State University, 2011 Process Capacity Definitions Maximum capacity : highest achievable level under ideal conditions, for a limited time Effective capacity : achievable level under normal conditions, for an extended time Capacity cushion is the difference between the maximum capacity and the effective capacity, usually, but not always, stated as a percentage. Utilization : how much available capacity is actually used Yield : usable output from input-for the time being, we will assume that yield is 100%.
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7 The Eli Broad College of Business, Michigan State University, 2011 Longer-term Resource Capacity Planning The question to be answered is basically: “How much (or how many) of each resource will we need To answer the question, you have to consider how much needs to be produced and how much one resource can produce,
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8 The Eli Broad College of Business, Michigan State University, 2011 Resource Planning Calculating resource needs: Resources required = Total Resource Demands Effective Capacity of 1 resource
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The Eli Broad College of Business, Michigan State University, 2011 Jones Company manufactures widgets. It expects to make and sell 100,000 widgets during the next month. It takes 10 minutes to make a widget. Production workers each work 200 hours per month. If Jones Company wants a 20% capacity cushion, how many production workers should it have? Another Simple Problem
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SCM303 Chapter 3 Slides - Managing Processes and...

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