Operation Management In Operations Management

Operation Management and Organizational Improvement

Program Code :MO0486

Abstract

This report aim to study how operation management is importantly displayed manufacturing sector in Toyota Manufacturing and service sector in McDonald’s fast-food restaurant. The comparison between two sectors is based on how they are related with capacity management for demand controls by using Lean and six sigma strategy.

Key Words : capacity , demand, Lean , Six Sigma , Toyota , McDonalds ,manufacturing, service

Introduction

Operation management of processes is that to convert from inputs into outputs .Process is the heart of operation management. (Jones, P., & Robinson. (2012)). Manufacturing and service organizations face many similar issues that

For Toyota, a term of production planning level relative to the demand level in various periods whereas for McDonald’s, a production plan is developed based on a sales plan.

The Role of ERP

Enterprise Resource Planning ( ERP) is the next evolution of the MRP system. In ERP, productions based on forecasts and machine utilization, push system, with centralized planning and control by top-down approach. ERP focus on tracking material movements. ERP systems can help to reduce lead time and inventory, improve productivity, quality, performance and customer services too.

Continuing success of McDonalds is due in great part to the implementation of its pull-driven supply chain by using ERP. The restaurants issue orders to the Distribution Center only when they need the raw meterials. At the restaurant level, the ERP solutions also track day-to-day sales and enable restaurants to schedule staff, and serve up every kind of food

B. (2003), Although lean and six sigma have evolved from different areas , The process mapping between lean and six sigma is clear Lean keep emphasizing on reduce waste to make improve quality and six sigma maintain to reduce variation with continuous improvement - means to decrease cost to lower. Combining the two areas can offer companies many advantages. It could be expressed as blue ocean strategy (Figure 3). Figure 3 :Lean-Six Sigma Bule Ocean Strategy

Table 5: Performance objective of applying Lean-Six sigma

Program Lean Six Sigma Performance Achievement

Theory Reduce Waste Reduce Variation Improve Process

Program Guideline Identify value

Reduce Wastes

Pull

JIT Define

Measure

Analyse

Improve

Control Cost down

Value up

High Customer satisfaction

Conclusion

Profits from Lean-six sigma process presented significant financial benefits. The lean- six sigma expand this philosophy step outside its own doors to influence the upstream suppliers and downstream customers, reducing the waste of resources. When Lean-six sigma applied on input operation process of manufacturing and service industry such as Toyota and McDonald to their supply chain strategy, the major potential advantages of output process are easy to manage demand by controlling capacity with lower cost ,improve outcomes, increase staff productivity, decrease costs, improve employee and customer