Frito Lay Operations Management class

Sep 6th, 2017
Anonymous
Category:
Accounting
Price: $15 USD

Question description

the topic is Frito-Lay

the instruction is in the attached file. also I attached the chapter PowerPoint.

this is the video that you summarise and write about https://mediaplayer.pearsoncmg.com/assets/fl_op_mg...


20170906_180107.jpg
Operations and Productivity 1 PowerPoint presentation to accompany Heizer, Render, Munson Operations Management, Twelfth Edition Principles of Operations Management, Tenth Edition PowerPoint slides by Jeff Heyl Copyright © 2017 Pearson Education, Inc. 1-1 Outline ▶ Global Company Profile: Hard Rock Cafe ▶ What Is Operations Management? ▶ Organizing to Produce Goods and Services ▶ The Supply Chain ▶ Why Study OM? ▶ What Operations Managers Do Copyright © 2017 Pearson Education, Inc. 1-2 Outline - Continued ▶ ▶ ▶ ▶ The Heritage of Operations Management Operations for Goods and Services The Productivity Challenge Current Challenges in Operations Management ▶ Ethics, Social Responsibility, and Sustainability Copyright © 2017 Pearson Education, Inc. 1-3 Operations Management at Hard Rock Cafe ▶ First opened in 1971 ▶ Now – 150 restaurants in over 53 countries ▶ Rock music memorabilia ▶ Creates value in the form of good food and entertainment ▶ 3,500+ custom meals per day in Orlando ▶ How does an item get on the menu? ▶ Role of the Operations Manager Copyright © 2017 Pearson Education, Inc. 1-4 Learning Objectives When you complete this chapter you should be able to: 1.1 Define operations management 1.2 Explain the distinction between goods and services 1.3 Explain the difference between production and productivity Copyright © 2017 Pearson Education, Inc. 1-5 Learning Objectives When you complete this chapter you should be able to: 1.4 Compute single-factor productivity 1.5 Compute multifactor productivity 1.6 Identify the critical variables in enhancing productivity Copyright © 2017 Pearson Education, Inc. 1-6 What Is Operations Management? Production is the creation of goods and services Operations management (OM) is the set of activities that create value in the form of goods and services by transforming inputs into outputs Copyright © 2017 Pearson Education, Inc. 1-7 Organizing to Produce Goods and Services ▶ Essential functions: 1. Marketing – generates demand 2. Production/operations – creates the product 3. Finance/accounting – tracks how well the organization is doing, pays bills, collects the money Copyright © 2017 Pearson Education, Inc. 1-8 Organizational Charts Figure 1.1 Copyright © 2017 Pearson Education, Inc. 1-9 Organizational Charts Figure 1.1 Copyright © 2017 Pearson Education, Inc. 1 - 10 Organizational Charts Figure 1.1 Copyright © 2017 Pearson Education, Inc. 1 - 11 The Supply Chain ▶ A global network of organizations and activities that supply a firm with goods and services ▶ Members of the supply chain collaborate to achieve high levels of customer satisfaction, efficiency and competitive advantage Figure 1.2 Farmer Syrup producer Copyright © 2017 Pearson Education, Inc. Bottler Distributor Retailer 1 - 12 Why Study OM? 1. OM is one of three major functions of any organization; we want to study how people organize themselves for productive enterprise 2. We want (and need) to know how goods and services are produced 3. We want to understand what operations managers do 4. OM is such a costly part of an organization Copyright © 2017 Pearson Education, Inc. 1 - 13 Options for Increasing Contribution TABLE 1.1 MARKETING OPTION FINANCE/ ACCOUNTING OPTION OM OPTION CURRENT INCREASE SALES REVENUE 50% REDUCE FINANCE COSTS 50% REDUCE PRODUCTION COSTS 20% $100,000 $150,000 $100,000 $100,000 Cost of goods –80,000 –120,000 –80,000 –64,000 Gross margin 20,000 30,000 20,000 36,000 Finance costs –6,000 –6,000 –3,000 –6,000 Subtotal 14,000 24,000 17,000 30,000 Taxes at 25% –3,500 –6,000 –4,200 –7,500 Contribution $ 10,500 $ 18,000 $ 12,750 $ 22,500 Sales Copyright © 2017 Pearson Education, Inc. 1 - 14 What Operations Managers Do Basic Management Functions ▶ ▶ ▶ ▶ ▶ Planning Organizing Staffing Leading Controlling Copyright © 2017 Pearson Education, Inc. 1 - 15 Ten Strategic Decisions TABLE 1.2 DECISION CHAPTER(S) 1. Design of goods and services 5, Supplement 5 2. Managing quality 6, Supplement 6 3. Process and capacity strategy 7, Supplement 7 4. Location strategy 8 5. Layout strategy 9 6. Human resources and job design 10 7. Supply-chain management 11, Supplement 11 8. Inventory management 12, 14, 16 9. Scheduling 13, 15 10. Maintenance 17 Copyright © 2017 Pearson Education, Inc. 1 - 16 The Strategic Decisions 1. Design of goods and services ▶ Defines what is required of operations ▶ Product design determines quality, sustainability and human resources 2. Managing quality ▶ Determine the customer’s quality expectations ▶ Establish policies and procedures to identify and achieve that quality Table 1.2 (cont.) Copyright © 2017 Pearson Education, Inc. 1 - 17 The Strategic Decisions 3. Process and capacity design ▶ How is a good or service produced? ▶ Commits management to specific technology, quality, resources, and investment 4. Location strategy ▶ Nearness to customers, suppliers, and talent ▶ Considering costs, infrastructure, logistics, and government Table 1.2 (cont.) Copyright © 2017 Pearson Education, Inc. 1 - 18 The Strategic Decisions 5. Layout strategy ▶ Integrate capacity needs, personnel levels, technology, and inventory ▶ Determine the efficient flow of materials, people, and information 6. Human resources and job design ▶ Recruit, motivate, and retain personnel with the required talent and skills ▶ Integral and expensive part of the total system design Table 1.2 (cont.) Copyright © 2017 Pearson Education, Inc. 1 - 19 The Strategic Decisions 7. Supply chain management ▶ Integrate supply chain into the firm’s strategy ▶ Determine what is to be purchased, from whom, and under what conditions 8. Inventory management ▶ Inventory ordering and holding decisions ▶ Optimize considering customer satisfaction, supplier capability, and production schedules Table 1.2 (cont.) Copyright © 2017 Pearson Education, Inc. 1 - 20 The Strategic Decisions 9. Scheduling ▶ Determine and implement intermediateand short-term schedules ▶ Utilize personnel and facilities while meeting customer demands 10. Maintenance ▶ Consider facility capacity, production demands, and personnel ▶ Maintain a reliable and stable process Table 1.2 (cont.) Copyright © 2017 Pearson Education, Inc. 1 - 21 Where are the OM Jobs? ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ Technology/methods Facilities/space utilization Strategic issues Response time People/team development Customer service Quality Cost reduction Inventory reduction Productivity improvement Copyright © 2017 Pearson Education, Inc. 1 - 22 Opportunities Figure 1.3 Copyright © 2017 Pearson Education, Inc. 1 - 23 Certifications ▶ APICS, the Association for Operations Management ▶ American Society for Quality (ASQ) ▶ Institute for Supply Management (ISM) ▶ Project Management Institute (PMI) ▶ Council of Supply Chain Management Professionals ▶ Charter Institute of Procurement and Supply (CIPS) Copyright © 2017 Pearson Education, Inc. 1 - 24 Significant Events in OM Figure 1.4 Copyright © 2017 Pearson Education, Inc. 1 - 25 The Heritage of OM ▶ Division of labor (Adam Smith 1776; Charles Babbage 1852) ▶ Standardized parts (Whitney 1800) ▶ Scientific Management (Taylor 1881) ▶ Coordinated assembly line (Ford/ Sorenson 1913) ▶ Gantt charts (Gantt 1916) ▶ Motion study (Frank and Lillian Gilbreth 1922) ▶ Quality control (Shewhart 1924; Deming 1950) Copyright © 2017 Pearson Education, Inc. 1 - 26 The Heritage of OM ▶ Computer (Atanasoff 1938) ▶ CPM/PERT (DuPont 1957, Navy 1958) ▶ Material requirements planning (Orlicky 1960) ▶ Computer aided design (CAD 1970) ▶ Flexible manufacturing system (FMS 1975) ▶ Baldrige Quality Awards (1980) ▶ Computer integrated manufacturing (1990) ▶ Globalization (1992) ▶ Internet (1995) Copyright © 2017 Pearson Education, Inc. 1 - 27 Eli Whitney ▶ Born 1765; died 1825 ▶ In 1798, received government contract to make 10,000 muskets ▶ Showed that machine tools could make standardized parts to exact specifications ▶ Musket parts could be used in any musket Copyright © 2017 Pearson Education, Inc. 1 - 28 Frederick W. Taylor ▶ Born 1856; died 1915 ▶ Known as ‘father of scientific management’ ▶ In 1881, as chief engineer for Midvale Steel, studied how tasks were done ▶ Began first motion and time studies ▶ Created efficiency principles Copyright © 2017 Pearson Education, Inc. 1 - 29 Taylor’s Principles Management Should Take More Responsibility for: 1. Matching employees to right job 2. Providing the proper training 3. Providing proper work methods and tools 4. Establishing legitimate incentives for work to be accomplished Copyright © 2017 Pearson Education, Inc. 1 - 30 Frank and Lillian Gilbreth ▶ Frank (1868-1924); Lillian (1878-1972) ▶ Husband and wife engineering team ▶ Further developed work measurement methods ▶ Applied efficiency methods to their home and 12 children! ▶ Book and Movie: “Cheaper by the Dozen,” “Bells on Their Toes” Copyright © 2017 Pearson Education, Inc. 1 - 31 Henry Ford ▶ Born 1863; died 1947 ▶ In 1903, created Ford Motor Company ▶ In 1913, first used moving assembly line to make Model T ▶ Unfinished product moved by conveyor past work station ▶ Paid workers very well for 1911 ($5/day!) Copyright © 2017 Pearson Education, Inc. 1 - 32 W. Edwards Deming ▶ Born 1900; died 1993 ▶ Engineer and physicist ▶ Credited with teaching Japan quality control methods in post-WW2 ▶ Used statistics to analyze process ▶ His methods involve workers in decisions Copyright © 2017 Pearson Education, Inc. 1 - 33 Contributions From ▶ Industrial engineering ▶ Statistics ▶ Management ▶ Economics ▶ Physical sciences ▶ Information technology Copyright © 2017 Pearson Education, Inc. 1 - 34 Operations for Goods and Services Services – Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services) Copyright © 2017 Pearson Education, Inc. 1 - 35 Operations for Goods and Services ▶ Manufacturers produce tangible product, services often intangible ▶ Operations activities often very similar ▶ Distinction not always clear ▶ Few pure services Copyright © 2017 Pearson Education, Inc. 1 - 36 Differences Between Goods and Services TABLE 1.3 CHARACTERISTICS OF SERVICES CHARACTERISTICS OF GOODS Intangible: Ride in an airline seat Tangible: The seat itself Produced and consumed simultaneously: Beauty salon produces a haircut that is consumed as it is produced Product can usually be kept in inventory (beauty care products) Unique: Your investments and medical care are unique Similar products produced (iPods) High customer interaction: Often what the customer is paying for (consulting, education) Limited customer involvement in production Inconsistent product definition: Auto Insurance changes with age and type of car Product standardized (iPhone) Often knowledge based: Legal, education, and medical services are hard to automate Standard tangible product tends to make automation feasible Services dispersed: Service may occur at retail store, local office, house call, or via internet. Product typically produced at a fixed facility Quality may be hard to evaluate: Consulting, education, and medical services Many aspects of quality for tangible products are easy to evaluate (strength of a bolt) Reselling is unusual: Musical concert or medical care Product often has some residual value Copyright © 2017 Pearson Education, Inc. 1 - 37 U.S. Agriculture, Manufacturing, and Service Employment Figure 1.5 100 - Percent of Workforce 80 – 60 – 40 – 20 – 0 . | 1800 | 1825 | 1850 Agriculture Copyright © 2017 Pearson Education, Inc. | 1875 | | 1900 1925 Services | 1950 | | 1975 2000 2025 (est.) Manufacturing 1 - 38 Organizations in Each Sector TABLE 1.4 SECTOR EXAMPLE PERCENT OF ALL JOBS Service Sector Education, Medical, Other San Diego State University, Arnold Palmer Hospital 15.3 Trade (retail, wholesale), Transportation Walgreen's, Walmart, Nordstrom, Alaska Airlines 15.8 Information, Publishers, Broadcast IBM, Bloomberg, Pearson, ESPN Professional, Legal, Business Services, Associations Snelling and Snelling, Waste Management, Inc., American Medical Association, Ernst & Young Finance, Insurance, Real Estate Citicorp, American Express, Prudential, Aetna Food, Lodging, Entertainment Olive Garden, Motel 6, Walt Disney 10.4 Public Administration U.S., State of Alabama, Cook County 15.6 1.9 13.6 85.2 9.6 Manufacturing Sector General Electric, Ford, U.S. Steel, Intel 8.6 Construction Sector Bechtel, McDermott 4.3 Agriculture King Ranch 1.4 Mining Sector Homestake Mining Grand Total Copyright © 2017 Pearson Education, Inc. .5 100.0 1 - 39 Service Pay ▶ Perception that services are low-paying ▶ 42% of service workers receive above average wages ▶ 14 of 33 service industries pay below average ▶ Retail trade pays only 61% of national average ▶ Overall average wage is 96% of the average Copyright © 2017 Pearson Education, Inc. 1 - 40 Productivity Challenge Productivity is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital) The objective is to improve productivity! Important Note! Production is a measure of output only and not a measure of efficiency Copyright © 2017 Pearson Education, Inc. 1 - 41 The Economic System Inputs Labor, capital, management Transformation The U.S. economic system transforms inputs to outputs at about an annual 2.5% increase in productivity per year. The productivity increase is the result of a mix of capital (38% of 2.5%), labor (10% of 2.5%), and management (52% of 2.5%). Outputs Goods and services Feedback loop Figure 1.6 Copyright © 2017 Pearson Education, Inc. 1 - 42 Improving Productivity at Starbucks A team of 10 analysts continually look for ways to shave time. Some improvements: Stop requiring signatures on credit card purchases under $25 Saved 8 seconds per transaction Change the size of the ice scoop Saved 14 seconds per drink New espresso machines Saved 12 seconds per shot Copyright © 2017 Pearson Education, Inc. 1 - 43 Improving Productivity at Starbucks A team of 10 analysts continually look for ways to shave time. Some improvements: Operations improvements have helped StarbucksSaved increase yearly Stop requiring signatures 8 seconds revenue per outlet bytransaction $250,000 to on credit card purchases per $1,000,000. under $25 27%, or Change the size Productivity of the ice has improved Saved 14by seconds about 4.5% per year. scoop per drink New espresso machines Copyright © 2017 Pearson Education, Inc. Saved 12 seconds per shot 1 - 44 Productivity Productivity = Units produced Input used ▶ Measure of process improvement ▶ Represents output relative to input ▶ Only through productivity increases can our standard of living improve Copyright © 2017 Pearson Education, Inc. 1 - 45 Productivity Calculations Labor Productivity Units produced Productivity = Labor-hours used = 1,000 250 = 4 units/labor-hour One resource input  single-factor productivity Copyright © 2017 Pearson Education, Inc. 1 - 46 Multi-Factor Productivity Output Multifactor = Labor + Material + Energy + Capital + Miscellaneous ► Also known as total factor productivity ► Output and inputs are often expressed in dollars Multiple resource inputs  multi-factor productivity Copyright © 2017 Pearson Education, Inc. 1 - 47 Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day 8 titles/day Overhead = $400/day 8 titles/day Old labor = = .25 titles/labor-hr productivity 32 labor-hrs Copyright © 2017 Pearson Education, Inc. 1 - 48 Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day 8 titles/day Overhead = $400/day Overhead = $800/day 8 titles/day Old labor = = .25 titles/labor-hr productivity 32 labor-hrs 14 titles/day New labor = = .4375 titles/labor-hr productivity 32 labor-hrs Copyright © 2017 Pearson Education, Inc. 1 - 49 Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day 8 titles/day Overhead = $400/day Overhead = $800/day 8 titles/day Old multifactor = = .0077 titles/dollar productivity $640 + 400 Copyright © 2017 Pearson Education, Inc. 1 - 50 Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day 8 titles/day Overhead = $400/day Overhead = $800/day 8 titles/day Old multifactor = = .0077 titles/dollar productivity $640 + 400 14 titles/day New multifactor = = .0097 titles/dollar productivity $640 + 800 Copyright © 2017 Pearson Education, Inc. 1 - 51 Measurement Problems 1. Quality may change while the quantity of inputs and outputs remains constant 2. External elements may cause an increase or decrease in productivity 3. Precise units of measure may be lacking Copyright © 2017 Pearson Education, Inc. 1 - 52 Productivity Variables 1. Labor - contributes about 10% of the annual increase 2. Capital - contributes about 38% of the annual increase 3. Management contributes about 52% of the annual increase Copyright © 2017 Pearson Education, Inc. 1 - 53 Key Variables for Improved Labor Productivity 1. Basic education appropriate for the labor force 2. Diet of the labor force 3. Social overhead that makes labor available ▶ Challenge is in maintaining and enhancing skills in the midst of rapidly changing technology and knowledge Copyright © 2017 Pearson Education, Inc. 1 - 54 Labor Skills About half of the 17-year-olds in the U.S. cannot correctly answer questions of this type Figure 1.7 Copyright © 2017 Pearson Education, Inc. 1 - 55 Capital Percent increase in productivity 10 8 6 4 2 0 10 15 20 25 30 35 Percentage investment Copyright © 2017 Pearson Education, Inc. 1 - 56 Management ▶ Ensures labor and capital are effectively used to increase productivity ▶ Use of knowledge ▶ Application of technologies ▶ Knowledge societies ▶ Labor has migrated from manual work to technical and information-processing tasks ▶ More effective use of technology, knowledge, and capital Copyright © 2017 Pearson Education, Inc. 1 - 57 Productivity in the Service Sector ▶ Productivity improvement in services is difficult because: 1. Typically labor intensive 2. Frequently focused on unique individual attributes or desires 3. Often an intellectual task performed by professionals 4. Often difficult to mechanize and automate 5. Often difficult to evaluate for quality Copyright © 2017 Pearson Education, Inc. 1 - 58 Productivity at Taco Bell Improvements: ▶ Revised the menu ▶ Designed meals for easy preparation ▶ Shifted some preparation to suppliers ▶ Efficient layout and automation ▶ Training and employee empowerment ▶ New water and energy saving grills Copyright © 2017 Pearson Education, Inc. 1 - 59 Results: Productivity at Taco Bell ▶ Preparation time cut to 8 seconds ▶ Management span of control increased from 5 Improvements: to 30 ▶ In-store labor cut by 15 hours/day ▶ Floor space reduced by more than 50% ▶ Stores average 164 seconds/customer from drive-up to pull-out ▶ Water- and energy-savings grills conserve 300 million gallons of water and 200 million KwH of electricity each year ▶ Green-inspired cooking method saves 5,800 restaurants $17 million per year Copyright © 2017 Pearson Education, Inc. 1 - 60 Current Challenges in OM ▶ ▶ ▶ ▶ ▶ ▶ Globalization Supply-chain partnering Sustainability Rapid product development Mass customization Lean operations Copyright © 2017 Pearson Education, Inc. 1 - 61 Ethics, Social Responsibility, and Sustainability Challenges facing operations managers: ▶ Develop and produce safe, high-quality green products ▶ Train, retrain, and motivate employees in a safe workplace ▶ Honor stakeholder commitments Copyright © 2017 Pearson Education, Inc. 1 - 62 Ethics,Stakeholders Social Responsibility, Those Sustainability with a vested interest in an and organization, including customers, distributors, Challenges facing suppliers, owners, lenders, employees, and community members. operations managers: ▶ Develop and produce safe, high-quality green products ▶ Train, retrain, and motivate employees in a safe workplace ▶ Honor stakeholder commitments Copyright © 2017 Pearson Education, Inc. 1 - 63 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2017 Pearson Education, Inc. 1 - 64

Tutor Answer

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School: Cornell University
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Attached.

Running Head: FRITO-LAY

1

Frito-Lay Operations Management in Manufacturing
Name
Institutional Affiliation

FRITO-LAY

2

The Video shows how operation management in manufacturing is being applied in the
Frito-Lay. Frito-Lay is a subsidiary of PepsiCo that manufactures and sells snack foods such
as potato chips, Walker's potato chips, and corn chips. The other primary snack foods that
Frito-Lay offers include Cheetos, Fritos, Doritos, Ruffles, Tostitos, and Rold Gold. Frito-Lay
has employed more than 48000 staffs in North America (Heizer & Render, n.d). Regarding
product design, Frito-Lay designs products that conform to the changing market preferences,
to handle issues relating to preservatives and flavors, and to adjust to rising production costs.
Before products are designed, kitchen experiments are undertaken with the new innovative
products and then submitted to focus groups. Focus g...

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