2. OBJECTIVE OF THE COURSE
By the end of this course students will be able to:
Ø Understand the meaning of Productions Operations Management
Ø Highlight the historical development of Productions Operations
Management
Ø Describe the scientific nature of Productions Operations
Management
Ø Identify the importance and uses of Productions Operations
Management
Ø State the limitations of Productions Operations Management
Ø Differentiate the terms Operations Management & Productions
Management
Ø Relation of Operation Management fields with Human Resource
Management fields
Ø Describe Raw Materials Management, Product (Output) & Job
design.
Ø Processing steps used & Management control information’s for
Market researches.
Ø Describe Equipment (tools) & Suppliers.
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3. CHAPTER ONE: NATURE OF
OPERATIONS MANAGEMENT (10 hours)
Introduction
Operation/Production is defined as “the step-
by-step conversion of one form of material into
another form through chemical or mechanical
process to create or enhance the utility of the
product to the user.”
Operations are that part of a business
organization that is responsible for producing
goods and/or services.
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5. Business organizations have three basic
functional areas,
Ø Finance - is responsible for securing financial
resources
Ø Marketing - is responsible for assessing
consumer wants and needs, and selling and
promoting
Ø Operations -responsible for producing the goods
or providing the services
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6. Definition of operation /production
management
Production management is the process of effectively
planning and regulating the operations of that part of an
enterprise which is responsible for the actual
transformation of materials into finished products
Operations management is the management of systems
or processes that create goods and/or provide services.
Operations and supply chains are intrinsically linked,
and no business organization could exist without both.
A supply chain is the sequence of organizations—their
facilities, functions, and activities that are involved in
producing and delivering a product or service.
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7. Operation managers are concerned with planning,
organizing, and controlling the activities, which
affect human behavior through models.
Planning:- Activities that establishes a course of
action and guide future decision-making is
planning.
Organizing:- An activity that establishes a
structure of tasks and authority
Controlling:- Activities that assure the actual
performance in accordance with planned
performance.
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A Framework for Managing Operations
9. Operations Management overview
Operations management is
qImportant- since it is concerned with creating
the services and products upon which we all
depend.
qExciting – since it is at the center of so many of
the changes affecting the business world.
qChallenging-since Promoting the creativity
which will allow organizations to respond to so
many changes is becoming the prime task of
OM
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10. Operations Management Objectives
vQuality: goods and services that are
reliable and perform correctly.
vEfficiency: the amount of input to
produce a given output.
vResponsiveness to customers: actions
taken to respond to customer needs.
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11. Scope of Operations Management
Following are the activities which are listed under
production and operations management functions:
Ø Product selection and design
Ø Process selection and planning
Ø Facilities (plant) location, Facilities layout and material
handling
Ø Capacity planning
Ø Production planning and control (PPC)
Ø Inventory control
Ø Quality assurance and control
Ø Work study and job design
Ø Cost reduction and cost control
Ø Forecasting 21/04/2022
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12. Managing Global Operations
The term ‘globalization’ describes businesses’
deployment of facilities and operations around
the world.
There are four developments, which have spurred
the trend toward globalization:
1. Improved transportation and communication
technologies;
2. Opened financial systems;
3. Increased demand for imports; and
4. Reduced import quotas and other trade barriers.
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13. Managing global operations would focus on the
following key issues:
Ø To associate global historical events to key drivers in global
operations from different perspectives.
Ø To develop criteria for conceptualization and evaluation of
different global operations.
Ø To associate success and failure cases of global operations to
political, social, economic and technological environments.
Ø To envision trends in global operations.
Ø To develop an understanding of the world vision regardless of
their country of origin, residence or studies in a respectful way
of perspectives of people from different races, studies,
preferences, religion, politic affiliation, place of origin, etc.
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14. Historical Evolution of Production and Operations
Management
For over two century’s operations and production
management has been recognized as an important
factor in a country’s economic growth. The
traditional view of manufacturing management
began in eighteenth century when Adam Smith
recognized the economic benefits of specialization of
labor.
In the early twentieth century, F.W. Taylor
implemented Smith’s theories and developed
scientific management. From then till 1930, many
techniques were developed prevailing the traditional
view. Production management becomes the
acceptable term from 1930s to 1950s. As F.W.
Taylor’s works become more widely known,
managers developed techniques that focused on
economic efficiency in manufacturing.
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15. Workers were studied in great detail to eliminate
wasteful efforts and achieve greater efficiency. At the
same time, psychologists, socialists and other social
scientists began to study people and human behavior
in the working environment. In addition, economists,
mathematicians, and computer socialists contributed
newer, more sophisticated analytical approaches.
With the 1970s, emerge two distinct changes in our
views. The first most of these, reflected in the new
name operations management was a shift in the
service and manufacturing sectors of the economy.
As service sector became more prominent, the
change from ‘production’ to ‘operations’ emphasized
the broadening of our field to service organizations.
The second, more suitable change was the beginning
of an emphasis on synthesis, rather than just
analysis, in management practices.
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16. Contemporary and core issues in Operations
management(operation today)
§ Service and Manufacturing (differences and implications)
§ Customer-Directed Operations
§ Time Reduction (Lean Operations)
§ Integration of Operations and Other Functions
§ Environmental Concerns
§ Supply Chain Management
§ Globalization of Operations
§ Economic conditions
§ Innovating
§ Quality problems
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17. 1.3 Manufacturing operations and service
operations
Although goods and services often go hand in
hand, there are some very basic differences as
well as many similarities between the two that
impact the management of the goods portion
versus management of the service portion.
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18. Production of goods results in a tangible
output, such as an automobile, eyeglasses, a golf
ball, a refrigerator—anything that we can see or
touch. It may take place in a factory, but it can
occur elsewhere. For example, farming and
restaurants produce non manufactured goods.
Delivery of service, on the other hand,
generally implies an act. A physician’s
examination, TV and auto repair, lawn care, and
the projection of a film in a theater are examples
of services.
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OM
19. The majority of service jobs fall into these categories:
Ø Professional services (e.g., financial, health care, legal).
Ø Mass services (e.g., utilities, Internet, communications).
Ø Service shops (e.g., tailoring, appliance repair, car wash, auto
repair/maintenance).
Ø Personal care (e.g., beauty salon, spa, barbershop).
Ø Government (e.g., Medicare, mail, social services, police, fire).
Ø Education (e.g., schools, universities).
Ø Food service (e.g., catering).
Ø Services within organizations (e.g., payroll, accounting, maintenance, IT,
HR, janitorial).
Ø Retailing and wholesaling.
Ø Shipping and delivery (e.g., truck, railroad, boat, air).
Ø Residential services (e.g., lawn care, painting, general repair, remodeling,
interior design).
Ø Transportation (e.g., mass transit, taxi, airlines, ambulance).
Ø Travel and hospitality (e.g., travel bureaus, hotels, resorts).
Ø Miscellaneous services (e.g., copy service, temporary help).
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20. Manufacturing and service are often different in terms of
what is done but quite similar in terms of how it is done.
Consider these points of comparison:
ü Degree of customer contact
ü Labor content of jobs
ü Uniformity of inputs/outputs
ü Measurement of productivity
ü Quality assurance
ü Inventory
ü Wages
ü Ability to patent
ü Evaluation of output
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21. Characteristics Goods Services
Output Tangible Intangible
Customer contact Low High
Labor content Low High
Uniformity of input High Low
Measurement of
productivity
Easy Difficult
Opportunity to
correct problems
High Low
Inventory Much Little
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22. Wages Narrow range
Wide range
Patentable Usually
Not usually
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OM
23. 1. 4 Operation Decision Making
The 10 decisions of OM that support missions and
implement strategies are as follows:-
1. Goods and service design
2. Quality
3. Process and capacity design
4. Location selection
5. Layout design
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24. Within the operations function,
management decisions can be
divided into three broad areas:
ØStrategic (long-term) decisions
ØTactical (intermediate-term) decision
ØOperational planning and control(short-
term) decision
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25. 1.5 Productivity Measuring
Productivity is a measure of how efficiently inputs are
converted to outputs
Productivity = output/input
v The use of just one resource input to measure
productivity, as shown above, is known as single-factor
productivity.
However, a broader view of productivity is multifactor
productivity, which includes all inputs (e.g., labor,
material, energy, capital).
v Partial Productivity Measure
Partial Productivity = unit produced/single
unit used
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27. Measuring service sector
productivity is a unique challenge
ØTraditional measures focus on tangible
outcomes
ØService industries primarily produce
intangible outcomes
ØMeasuring intangibles is challenging
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28. ASSIGNMENT
1. Identify the Classification of Production
System
2. Define each through discussing their basic
importance and limitation
3. Take one company that you or your
colleagues working for. Then Try to assess
the over all operational performance in
terms of Quality, Efficiency and
Responsiveness for its customer. And which
production system is implemented there?
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OM
