Introduction Prof. Christian Terwiesch Operations in a Restaurant - - PowerPoint PPT Presentation

Introduction

• Prof. Christian Terwiesch

Operations in a Restaurant

• Prof. Christian Terwiesch

Operations in an Emergency Room

• Prof. Christian Terwiesch

Operations from the Perspective of the Customer

• Prof. Christian Terwiesch

Four Dimensions of Performance

Cost

▪ Efficiency

Quality

▪ Product quality (how good?) ▪ Process quality (as good ▪ Process quality (as good

as promised?) Time

▪ Responsiveness to

demand Variety

▪ Customer heterogeneity

Important for

• Performance measurement
• Defining a business strategy
• Prof. Christian Terwiesch

Four Dimensions of Performance: Measurements for a Sandwich Store

Cost

▪ Efficiency

Quality

▪ Product quality (how good?) ▪ Process quality (as good as

promised?) Time

▪ Responsiveness to demand

p ) Variety

▪ Customer heterogeneity ▪ Responsiveness to demand ▪ Customer heterogeneity

• Prof. Christian Terwiesch

Introduction

Efficient Frontier

• Prof. Christian Terwiesch

Four Dimensions of Performance: Trade-offs

Cost

▪ Efficiency ▪ Measured by:

Quality

▪ Product quality (how good?)

=> Price

▪ Process quality (as good

• cost per unit
• utilization

▪ Process quality (as good

as promised?) => Defect rate Time

▪ Responsiveness to

Variety

▪ Customer heterogeneity

p demand

▪ Measured by:

• customer lead time
• flow time

Customer heterogeneity

▪ Measured by:

• number of options
• flexibility / set-ups

make to order

• Prof. Christian Terwiesch
• flow time
• make-to-order

What Can Ops Management (This Course) Do to Help? Step 1: Help Making Operational Trade-Offs

Responsiveness High Very short waiting times, Comes at the expense of Frequent operator idle time Trade-

• ff

Long waiting times, yet operators are almost fully utilized

Example: Call center of a large retail bank

Labor Productivity (e.g. $/call) Low Low labor productivity High labor productivity y

Example: Call center of a large retail bank

• objective: 80% of incoming calls wait less than 20 seconds
• starting point: 30% of incoming calls wait less than 20 seconds
• Problem: staffing levels of call centers / impact on efficiency
• Prof. Christian Terwiesch

OM helps: Provides tools to support strategic trade-offs

What Can Ops Management (This Course) Do to Help? Step 2: Overcome Inefficiencies

Responsiveness High Current frontier Eliminate inefficiencies In the industry Competitor A Low Competitor C Competitor B Labor Productivity (e.g. $/call) Low labor productivity High labor productivity Competitor B

Example:

• Benchmarking shows the pattern above
• Don’t just manage the current system… Change it!

Provides tools to identify and eliminate inefficiencies => Define Efficient Frontier

• Prof. Christian Terwiesch

Types of inefficiencies:

• Poor process design
• Inconsistencies in activity network

What Can Ops Management (This Course) Do to Help? Step 3: Evaluate Proposed Redesigns/New Technologies

Responsiveness High High Redesign process Current frontier New frontier Low In the industry Labor Productivity ( $/ ) Low labor High labor

Example:

• What will happen if we develop / purchase technology X?

Better technologies are al a s (?) nice to ha e b t ill the pa ?

(e.g. $/call) productivity productivity

• Prof. Christian Terwiesch
• Better technologies are always (?) nice to have, but will they pay?

OM helps: Evaluates system designs before they occur

Example: The US Airline Industry

• Prof. Christian Terwiesch

Example: The US Airline Industry

• Prof. Christian Terwiesch

Introduction

Format of the course

• Prof. Christian Terwiesch

Course Outline / Grading / Homework

Objective of the course: Understanding and improving business processes Performance measures How-to Mix of industries: healthcare restaurants automotive computers call centers banking etc Mix of industries: healthcare, restaurants, automotive, computers, call centers, banking, etc Course Outline Introduction (0.5 weeks)

• 1. Process analysis (1.5 weeks)
• 2. Productivity
• 3. Product variety
• 4. Responsiveness
• 5. Quality

Requirements / Prerequisites: There are no prerequisites for the course Some modules require statistical knowledge (standard deviation, normal distribution) Homework assignments One large assignment after each module (five assignments); 10% each Final exam with questions from all modules; 50%

• Prof. Christian Terwiesch

q ;

Text Book

Course book Cachon, Gerard, Christian Terwiesch, Matching Supply with Demand: An Introduction to Operations Management, 3rd edition, Irwin - McGraw Hill, 2012 (ISBN 978-0073525204, 507 pages)

• Prof. Christian Terwiesch

Personal Introduction

MBA core course: Operations Management: Quality and Productivity Taught ~ 60 times ~ 4000 MBA students McKinsey Ops Practice ~ 500 new associates Research: Operations Management, focus on Healthcare Management Innovation tournaments and contests

Christian Terwiesch terwiesch@wharton.upenn.edu Andrew M. Heller Professor at the Wharton School Senior Fellow Leonard Davis Institute for Health Economics 573 Jon M. Huntsman Hall

• Prof. Christian Terwiesch

Philadelphia, PA 19104.6366