10 OM Strategy Decisions Inventory Management

Design of Goods and Services, Managing Quality, Function, to provide inventory as the demand needed,
Process Strategies, Location Strategies, Layout no shortage and no excess, to Decouple various parts
Strategies, Human Resources, Supply Chain of the production process, to take advantage quantity
Management, Inventory Management,Scheduling, discounts, to hedge against inflation and upward price
Maintenance changes.
CH1-Operations and Productivity Types, raw material, work-in process, maintenance /
Operations management (OM) is the set of activities repair / operating (MRO), finished good.
that create value in the form of goods and services by
Managing Inventory using ABC Analysis, Record
transforming inputs into outputs.
Accuracy, Cycle Counting and Control of Services
The focuses : Cost - Quality - Customization -
Inventories.
Globalization
ABC analysis, divides inventory into three classes
Productivity is the ratio of outputs (goods and services)
based on annual dollar volume.
divided by the inputs (resources, such as labor and
capital). Three productivity variables are labor, capital Record Accuracy, Incoming and outgoing record
and management. keeping must be accurate.
Service Sector, Labor intensive, unique individual Cycle Counting, records must be verified through a
desires, intellectual task, difficult to mechanize and continuing audit. Items are counted and records
automate, difficult to evaluate for quality. updated on a periodic basis
Challenges in OM are, Globalization, supply-chain Inventory Costs are, holding, ordering and setup.
partnering, sustainability, technological change, mass Certain Independent Inventory Models are, Basic
customization, lean operation. Economic order Quantity, Production Order
Agregate Planning, Short Term Scheduling, ERP & Quantity, Quantity Discount Model.
MRP Uncertain Independent Inventory Models are,
Probabilistic Models & Safety Stock, which is when
Sales and operations planning (S&OP) can be a strong
demand is variable and lead time is constant, lead
vehicle for coordinating the functional areas of a firm as
time is variable and demand is constant or both
well as for communication with supply chain partners.
deman and lead time are variable. (lead time is
The output of S&OP is an aggregate plan. The objective
number of working days it takes to deliver an order).
of aggregate planning is to meet forecasted demand
while minimizing cost over the planning period Other independent inventory model is single-period
model, and A fixed-period model which potentially
Minimize cost over the planning period by adjusting :
orders a different quantity each time.
production rates, labor levels, inventory levels, overtime
work, subcontracting rates, etc.
Agregate Planning, combines appropriate resources into
general terms, while disaggregation breaks the plan
down into greater detail (master production schedule).
Agregate Planning Strategy, chase & level-scheduling
strategy. Chase Strategy, typically attempts to achieve
output rates for each period that match the demand
forecast for that period. Level Strategy, which
production is uniform from period to period.
Job Design Lean Operation (JIT & TPS)
The objective of a human resource strategy is to Lean operations supply the customer with exactly
manage labor and design jobs so people are what the customer wants when the customer wants
effectively and efficiently utilized it, without waste, through continuous improvement.
1. People should be effectively utilized within the It driven by workflow initiated by the “pull” of the
constraints of other operations management customers order.
decisions Just-in-time (JIT) is an approach of continuous and
2. People should have a reasonable quality of work forced problem solving via a focus on throughput
life in an atmosphere of mutual commitment and and reduced inventory. Requires concern of
trust suppliers. JIT Layout Occurs distance reduction,
decision areas of human resource strategy : labor increased flexibility, impact on employees, reduced
planning, job design, and labor standards. space and inventory. JIT Inventory, reduce
vaiability, inventory, lot sizes, setup costs. JIT
Labor planning : employement stability.
Scheduling, level schedules, kanban.
Follow demand exactly. Costly but properly fit the
Toyota Production System (TPS), with its emphasis
operation needs. Hold employment constant.
on continuous improvement, respect for people, and
potentially incurs gabut or overwork to employee.
standard work practices, is particularly suited for
Labor planning : Work schedules.
assembly lines.
Flextime. Employee sets their own schedule (within
Just-in-Time, the Toyota Production System, and
limits). Flexible workweek. Fewer but longer days
Lean Operations have same objectives to Eliminate
work. Parttime work. More but shorter days work.
Waste, Remove Variability, Improve Throughput
Labor planning : job classificatio and Work rules.
Waste is anything that does not add value from the
Job Design : specialization, expansion (enlarge and
customer point of view
enriched), psychological components, self-directed
Ohno’s 7 Wastes are, overproduction, queues,
teams and motivation and incentive system.
transportation, inventory, motion, overprocessing,
Segitiga Ergonomi : TASK - INTERVENSI
defective products.
(Seleksi, Training, Procedure, Tools) - HUMAN.
The 5 S’s are, sort/segragate, simplify/straighten,
Maintenance & Reliability shine/sweep, standardize, sustain/self-discipline. Plus
The objective of maintenance and reliability is to two additional S’s are, Safety and
maintain the capability of the system. Maintenance support/maintenance.
is a process, reliability is a score in a percentage.
Two types of maintenance, break down (re-active)
and planned (preventif - predictive).
Level of Failure : massive / catastrophic, safety &
health, produktivitas, machine failure (Risk Base
Maintenance).