Operations management

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Operations management

  1. 1. Operations Management  Operations Management is the planning, scheduling and controlling of activities that transforms inputs by way of raw materials, capital, machinery, labour, information and time into outputs in the form of products and services of higher value than the inputs.
  2. 2. Decision Areas  Managing Quality  Product Design  Process Design  Location Strategies  Layout Strategies  HR Strategies  Supply chain Management  Inventory Management  Scheduling  Maintenance
  3. 3.  Difference between Production & Productivity  Partial Vs Total Productivity  4Ms: Men Machine Material Money  Efficiency Vs Effectiveness
  4. 4. Type of Production Systems  Mass / Flowline  Batch  Job  Projects
  5. 5. Plant Location A good location reduces the cost of production & distribution to a considerable extent Need for Plant Location: - New Factory - Expansion - Relocation
  6. 6. Factors determining the plant location: Primary….  Supply of Raw Material  Nearness to the market  Transport Facilities  Labour Supply  Availability of Power  Supply of Capital
  7. 7. Secondary  Facilities  Natural Factors  Political Factors  Govt Subsidies and facilities (SEZ…)  Historical & Religious Factors  Initial start & Goodwill  Personal Factors  Miscellaneous Factors (Eg.Vaastu ….Maruti Udyog Ltd) …and many more.
  8. 8. Urban Vs Rural
  9. 9. Plant Layout Plant Layout is the physical arrangement of machines, processing equipment and service departments to have the best co ordination and efficiency of man machine and material in a plant. Principles of Plant Layout…
  10. 10. Factors affecting layout  Types of Industries  Type of production system  Type of product  Volume of product  Desired flexibility  Use of space / Available floor space  Flow of Work, Material & Personnel  Accessibility  Working Environment  Architecture design of the space
  11. 11. Material flow systems  I Type  L Type  U Type  S Type  O Type
  12. 12. Process charts  Operations Process chart  Flow process chart
  13. 13. Types of Plant Layout  Process Layout  Product Layout  Fixed Position Layout  Hybrid Layout
  14. 14. Material handling equipments  Conveyors: Belt, Chain, Roller.
  15. 15. Cranes, Hoists
  16. 16. Forklifts & Industrial Trucks
  17. 17. Principles of Material Handling
  18. 18. INVENTORY MANAGEMENT Managing the stock of items kept on hand by an organisation to be used to meet customer demand. Types of Inventory - RM Inventory - WIP Inventory - FG Inventory
  19. 19. Functions of Inventory  To meet anticipated demand  To smooth production requirements  To avoid over stocking and under stocking  To avail quantity discounts  To hedge against price fluctuations and seasonal demand.
  20. 20. Concept of EOQ  Meaning of EOQ  Types of cost  Reorder level  Assumptions of EOQ
  21. 21. Selective Inventory Control  ABC Analysis  VED Analysis  FSN Analysis
  22. 22. Materials Management Materials Management consists of planning, directing, co-ordinating and controlling those activities which are concerned with the materials and inventory requirements from the point of their inception to the final manufacturing. “Right Material in right quantity at the right time at the right price from the right source of supply.”
  23. 23. Importance of materials management  Accounts for major part of the capital employed  Offers maximum opportunities to reduce costs and shorten the process time thus increasing profits  Quality of finished products eventually depends on the quality of the materials used  Materials management encompasses some of the most prominent areas like Purchasing, Storing, Inventory, Material Handling, Transportation, Shipping….  Material Procured should be compatible with the demand
  24. 24. Functions  Minimisation of costs (Material, purchase, inventory..)  Maintain the desired quality  Avoid overstocking & stock outs  Increase the inventory turnover  Vendor Management & Vendor Relations  Development of Operations Personnel
  25. 25. Purchase Dept Types of procurement  Centralised  Decentralised
  26. 26. Modes of purchasing materials  Spot Quotations  Floating the limited inquiry  Tender
  27. 27. Stores Management Functions:  Receipt  Storage  Retrieval  Issue  Records  Housekeeping  Surplus stock  Scrap  Verification  Co ordination & Co operation
  28. 28. Stores Management Objective:  Material never goes out of stock  Material is never too excess than what is required  Minimise costs  Material should be easily traceable and available at beck and call  To protect the stores against theft , damage etc…  Optimum utilisation of cubic space.
  29. 29. Principles of Stores Layout  Optimum utilization of floor space  Adequate floor load  Wide aisles & Gangways  Heavy items to be stored at low levels  Most frequently used items to be stored near issuing windows  Movement of air, temp, light, materials, humans not to be obstructed  Ergonomically designed
  30. 30.  Water proofing is essential  Adequate security & safety  Adequate material handling equipments  Proper Material tracking & locating systems
  31. 31. Material Issuance & pricing methods  FIFO  LIFO  Average Cost
  32. 32. Type of Stores  Centralised  Decentralised
  33. 33. Maintainance Management  It refers to the upkeep and protection of plant, building & machinery and other fixed assets of a firm which are subject to deterioration due to their use and exposure to the environment over a period of time.  Maintainance encompasses all those activities required to keep the physical facilities and equipments in good working condition and make necessary repairs when breakdown occurs, so that the system can perform as intended.
  34. 34. Major areas of Maintainance  Civil  Mechanical  Electrical
  35. 35. Types  Breakdown Maintenance  Preventive Maintenance  Predictive Maintenance  Routine Maintenance  Planned Maintenance
  36. 36. Some Indices  Maintenance cost index  Frequency of breakdowns  Down time index  Breakdown Maintenance index  Labour cost of planned Maintainance
  37. 37. KAIZEN  Developed by Masaaki Imai  Meaning  Principles  Merits  Limitations  5 s
  38. 38. KANBAN  Literal Meaning “Card Bin”  Coined by Taiichi Ohno  It is a scheduling system for Regular and just-in- time (JIT) production.
  39. 39. Six Sigma  Six Sigma ( ) is a process improvement set of tools and strategies to achieve excellence and perfection.  Developed by Motorola in 1986.  The term borrows its name from the Normal Distribution.  A six sigma certification is granted to a process which manufactures products in which 99.99966% Of the products manufactured are free of defects.  A maximum of 3.4 defects per million are allowed.
  40. 40. DMAIC Model
  41. 41. Learning Curve A learning curve is a graphical representation of the changing rate of learning (in the average person) for a given activity or task.
  42. 42.  Concept  Graph  Learning Rate  Limitations  Anti Learning Curve
  43. 43. Quality The quality of product or service is a customer’s perception of the degree to which the product or service meets his or her expectations. Quality is the performance of the product as per the commitment made by the producer to the consumer.
  44. 44. Benefits of Quality Control  Minimum Scrap  Reduction in costs  Standardisation or uniformity in products  Reduced Production Bottlenecks & Stoppages  Reduced inspection and Quality Checks  High Customer Satisfaction  Increase in Brand Goodwill & thus higher Sales  Higher Operating efficiency  Sense of pride amongst the Employees  Better utilisation of resources.
  45. 45. Dimensions of Product Quality  Performance  Features  Reliability  Serviceability  Appearance  Customer Service  Safety
  46. 46. Q C TOOLS  Stratification  Data Collection  Check Sheet  Pareto Analysis  Histogram  Ishikawa Diagram  Control Charts
  47. 47. Quality Gurus  Ishikawa  Deming  Philip Crosby  Juran  Feigenbaum
  48. 48. SELF STUDY ISO

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