041_MANAJEMEN_Meija_495

Facilities Layout

Facilities layout - the grouping and organization of
equipment and employees

 Product layout - where each function is performed in a
fixed sequence

 Process layout - where each work station is relatively self-
contained

 Fixed position layout - where remote work stations
assemble components, and they are then brought to a final
assembly area

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Flexible Manufacturing

Flexible manufacturing – techniques that
help reduce the setup costs associated with
the production system

computer aided design, engineering, and
manufacturing tools make the work process
more flexible

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Process Monitoring Tools

Acceptance Statistical
Sampling Process Control

Total Factor Partial
Productivity Productivity

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Statistical Process Control Tools

Check Sheets Pareto Analysis

Control Charts Process Flow
Analysis
McGraw-Hill
Cause-and-
Effect Diagrams

Process
Capability
Measures

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Disposition of the Product

The end result of the operations process is the
product – a good or a service. Operations

management includes customer fulfillment process.

Order review / release (ORR) activity: used to
evaluate and track the order through the process:

 Creating order documentation
 Material checking
 Capacity evaluation
 Load leveling

The order must be checked to verify it is complete.

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Managing Quality

Top management must make improvement in
productivity a strategic objective of the firm.

Top management must also be sure that managers
from different areas of the firm work together to
increase efficiency.

A more efficient production process lowers
production costs, increases profitability, may lead
to lower prices, and attract new customers.

W. Edwards Deming is considered the father of
quality management.

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Managing Quality (continued)

The Quality Management Approach

 Total Quality Management (TQM)

Kaizen (Continuous Improvement) and Efficiency
Just-in-Time Systems
Process Engineering

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Total Quality Management (TQM)

Continuous improvement of the production
sequence should be one of the main objectives of
operations management.

Total Quality Management (TQM) – based on the
belief that all of an organization’s activities need to be
focused on improving its product.

Four interrelated steps to quality:

 Plan

 Do

 Check

 Act

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Total Quality Management (TQM)

(continued)

 Management and TQM

 Correct variances in operations management by using TQM
principles to find and correct their source.

 Employees and TQM

 Operations managers must be sure their employees
understand what TQM means and that each worker is
responsible for improving quality.

 Managers must also be willing to act on any suggestions or
problems that employees identify.

 Quality circles.

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Total Quality Management (TQM)

(continued)

Customers and TQM

 Operations management can focus on improving the quality
gap – the difference between what customers want and what
they actually get from the company.

Suppliers and TQM

 Suppliers are seen as partners with the firm.

TQM and the Production Process

 Operations management uses TQM techniques to focus on, and
improve the production process.

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Kaizen (Continuous Improvement)
and Efficiency

The Japanese process of continuous improvement
in the organization’s production system from
numerous small, incremental improvements in
production processes.

One of the main principles of kaizen is reducing
waste in materials, inventory, production steps, and
activities that do not add value.

 Three steps: © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

 Maintenance
 Kaizen
 Innovation

McGraw-Hill

Just-in-Time (JIT) Systems

Just-in-time (JIT) – the concept behind creating the
firm’s product in the least amount of time.

Close coordination between manufacturers,
suppliers, and customers.

The firm’s inventory of inputs are kept at the
lowest level possible.

Inputs arrive at the organization when, not before,
they are needed.

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Kanban

A form of JIT system originated in Japan
Uses cards to generate inventory
From the Japanese word for ―card‖ or ―sign‖
small batches of components to assembly line as

needed

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Process Reengineering

Method of changing the entire production process
rather than making incremental changes.

The firm (including its operations management) is
viewed as a complete process.

Involves fundamentally rethinking and radically
redesigning the entire process including:

 Cutting out steps that are not needed.
 Reducing paperwork.

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Applications: Management is Everyone’s
Business—For the Manager

Quality-centered management of operations is the
key to remaining competitive and can lead to the
survival of the organization.

Effective managers understand and utilize the
concepts and techniques of operations
management.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Managing Teams

Team members need the technical skills involved in
measurement and evaluation.

Team members also need interpersonal skills so
that the team structure facilitates rather than gets
in the way of improving production processes.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Individuals

Workers must understand the objectives of the
organization and how they are adding value to the
process.

Individuals make the difference in performance.

Errors, waste, and poor productivity are simply not
acceptable in today’s competitive market.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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Chapter

18

Managing Information Systems

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Learning Objectives

After reading this chapter, you should be able to:

 Understand the difference between data and information,
and how firms use each to achieve organizational goals.

 Integrate the components of a firm’s information
technology.

 Compare different types of networks, including local area
networks, intranets, extranets, and the Internet.

 Understand the role of software and how it changes business
operations.

 Discuss the ethical issues involved with the use of computer
technology.

 Understand how productivity, efficiency, and
responsiveness to customers can be improved with
information technology.

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Two Perspectives

 This chapter looks at information from
two perspectives:

 How the firm’s information systems and information
technology are part of management.

 How management information systems are used by
managers.

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Management Skills for Information
Systems Management

Analytical Skills—Managers need to be able to
gather, synthesize, and compare data about their firms
and about the options available to them.

Organizational Skills—Managers need to be able to
make sense of information by organizing data to
facilitate analysis and comparison.

Flexibility and Innovation Skills—Managers must be
able to be flexible in adapting standard business
practices to new information technologies.

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Information Related to MIS

Management information systems provide
access to important information used in
many other chapters:

Planning process (chapter 5)
Decision making (chapter 6)
Human resource management (chapter 10)
Communication (chapter 15)
Control (chapter 16)
Operations management (chapter 17)

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Data and Information

Data—raw facts, such as the number of items sold
or the number of hours worked in a department.

Information—data that have been gathered and
converted into a meaningful context.

Useful information is:

 High quality
 Timely
 Relevant
 Comprehensive

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Data and Information (continued)

Databases—computer programs that assign
multiple characteristics to data and allow users to
sort the data by characteristic.

Data warehouses—massive databases that contain
almost all of the information about a firm’s
operations.

Data mining—the process of determining the
relevant factors in the accumulated data to extract
the data that are important to the user.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Information Technology

Technology is the means of transforming inputs
into products.

Technology has improved operations management,
including productivity, efficiency, and customer
responsiveness.

A firm’s information technology may incorporate
its operations technology.

Six Functions of Information Technology:

 Captures data, Transmits data, Stores information, Retrieves
information, Manipulates information, Displays information

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Equipment

Local area networks (LAN) link computers in a
firm so users can share information

Servers store information for users linked to them
Wireless equipment—computers no longer require

a physical connection, instead satellites or central
locations create links

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Computer Networks

 LAN

 The Internet is a network of networks. It provides:

 E-mail
 Telnet connections with computers
 File transfer protocols (FTP) to move files
 World Wide Web provides access to protocols for text, documents,

and images

 Extranets (wide area networks) link a company's employees,
suppliers, customers, and other key business partners

 Intranets are internal networks that are private or
semiprivate, access is limited to a firm's employees or
certain employees

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Types of Software

Operating system software tells the computer
hardware how to run

Applications software is developed for a specific
task

Artificial intelligence performs tasks as such as
searching through data and e-mail

Speech recognition software allows customers to
speak numbers when placing orders over the phone

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource
Planning (ERP) Software

Combines all of a firm’s computerized
functions into a single, integrated software
program that runs off a single database.

This allows various departments to easily
share information and communicate with
each other.

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ERP Implementation Reasons

 To integrate financial data by providing one set
of numbers for the company’s finance
department, sales department, and individual
business units

 To standardize manufacturing processes, so that
a firm with multiple business units can save time,
increase productivity, and reduce staff

 To standardize human resources information
about employees and communicating
information about benefits and services

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Computer Systems and
Management Issues

Computer Ethics—The analysis of the nature and
social impact of computer technology and the
development of policies for its appropriate use.

Security—Controlling access to and transmission of
data and information contained in the firm’s
network.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Reasons for
Computer Ethics

 Computer-generated errors are unlike human error.

 Computers are able to communicated over the great
distances at low cost.

 Computers can store, copy, erase, retrieve, transmit,
and manipulate huge amounts of information quickly
and cheaply.

 Computers can depersonalize originators, users, and
subjects of programs and data.

 Computers can use data created for one purpose for
another purpose for long periods of time.

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Ten Commandments
for Computer Ethics

 Thou shalt not use a computer to harm other
people.

 Thou shalt not interfere with other people’s
computer work.

 Thou shalt not snoop around in other people’s
files.

 Thou shalt not use a computer to steal.

 Thou shalt not use a computer to bear false
witness.

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Ten Commandments
for Computer Ethics (continued)

 Thou shalt not use or copy software for which
you have not paid.

 Thou shalt not use other people’s computer
resources without authorization.

 Thou shalt not appropriate other people’s
intellectual output.

 Thou shalt think about the social consequences
of the program you write.

 Thou shalt use a computer in ways that show
consideration and respect.

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Ways to Implement Security

User names and passwords

Encryption – use of software that scrambles data

Firewalls – a combination of hardware and
software that controls access to and transmission of
data and information contained in a network

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Information Systems

Information systems combine computers, other
hardware, software, and human resources to
manipulate data into useable information.

Operations information systems:

 Process control systems
 Office automation systems
 Transaction-processing systems

 Expert systems

Neural network systems

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Management Information Systems

Management information system (MIS): an
information system that provides information to
managers to use in making decisions.

Types of MIS used by businesses:

 Information reporting systems
 Decision support systems
 Group decision support systems
 Executive information systems
 Human resource information systems

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MIS and Organizational Structure

Flatter management hierarchies
Horizontal information flows now viable
Reduction in time to make management decisions
Reduction in the number of employees needed to

perform many organizational activities
Elimination of barriers between departments

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MIS and Competitive Advantage

Improved decision making
Increased organizational efficiency
Greater responsiveness to customers:

 Personalized customer service
 Improved product support

Enhanced entry to new markets
Greater ability to enter joint ventures,

partnerships, and strategic alliances
The addition of e-commerce

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Implementing MIS

Consider the organization’s principle goals and
information needs

Evaluate current MIS for accuracy, reliability,
timeliness, and relevance of information

Create employee support for the change by
showing how it will help employees

Make the technology user-friendly
Consider the human element

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Factors for Successful MIS
Implementation

User involvement
Management support
Time and cost evaluations
Phased implementation
Thorough testing
Careful training and documentation
System backup during the transition

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For the Manager

Beware of outsourcing IT - in many cases, it results
in dissatisfaction.

Managers should analyze very carefully the pros
and cons of outsourcing before agreeing to enter an
IT outsourcing relationship.

Be aware of trade-offs between owning the IT
function or giving up control of it to an outside
party.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Managing Teams

Groupware software supports collaborative efforts
among group members, such as scheduling
meetings, holding meetings, collaborating on
projects, and sharing documents.

With Groupware, teams can be more productive
with less downtime despite conflicting demands
placed on each team member’s work schedule to
work on other tasks.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Individuals

Individuals need constant updating of computer
skills to master upgraded versions of software and
to learn new software.

Cultivate a constructive relationship with the IT
person in your department.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.