A system is defined as a set of interrelated parts that function together to perform some function. •A system is defined as a set of interrelated parts that function together to perform a certain function. An organization is a system made up of different departments or subsystems, which in turn can contain subsystems. •For example, an organization may have a marketing subsystem, a manufacturing subsystem, and a financial subsystem. The marketing subsystem may also be broken down into further subsystems such as sales, customer service, and advertisingThe systems approach recognizes that all the subsystems function together as part of the whole and emphasizes that the whole is greater than the sum of its individual parts. •This means that the emphasis is on the operation of the entire system, with subsystems generally focused on as they relate to the ability of the entire system to perform its function.Efficiency refers to completing a process for the lowest possible cost. •A process that is efficient completes the process for the lowest possible cost. oFor example, if it costs $20 in parts and labor to produce one product and this cost is reduced, the efficiency of the process has improved.Effectiveness refers to completing a process to provide the most value for the company. •A process that is effective is one that provides value for the company. oFor example, reducing the cost of manufacturing an item could increase efficiency. However, if the products manufactured do not meet quality standards, the process is not effective.The value of a product or service is its quality divided by its price. •Value refers to the quality of a product or service divided by the price of the product or service. •If the quality of a product increases while price remains the same, value increases. •Value also increases if quality stays the same while the price is decreased.The inputs of a process can include capital, raw materials, equipment, labor, or information. •The inputs of a process refer to what the organization has to provide to create outputs. oMay include land, capital, raw materials, equipment, facilities, labor, or information.The goods or services that an organization produces via its processes are known as outputs. •An organization provides inputs such as capital, raw materials, and labor. •It then transforms these inputs to outputs. ooutputs can be goods, services, or a combination of both.Productivity is calculated by dividing the value of outputs by the value of inputs. •Productivity is a measure of the effective use of resources. In a production system, transformation processes convert inputs into outputs.
•A production system starts with inputs such as labor, raw materials, or information.
- Spring '13
- Management, Cycle Time, Therbligs