Operations Management


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PPT. giving breif idea of Operations Managment and its importance

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Operations Management

  1. 1. Aakash Presents
  3. 4. OPERATIONS MANAGEMENT <ul><li>Managing various operations involved in production of goods and services </li></ul><ul><li>For the production of goods and services there are various operations that are associated with them </li></ul><ul><li>Goods- IMC, Manufacturing management, PPC, QC/QA, Dispatching, Distribution etc </li></ul><ul><li>Services- Marketing, DBMS, IS, HRM etc </li></ul>
  4. 5. OM Vs Productions management <ul><li>Production management is the part of OM </li></ul><ul><li>Managing the operations associated with the actual manufacturing or only production process is called productions management </li></ul><ul><li>While overall management of operations taking place in a manufacturing or service industry is called OM </li></ul>
  5. 6. Need of OM <ul><li>Main focus of all industries is to achieve maximum possible efficiency and effectiveness in the processes taking place in the organization </li></ul><ul><li>Through OM, we try to conduct all organizational operations in most efficient and effective way </li></ul><ul><li>OM assures efficient and effective utilization of resources and it assures the proper distribution of goods & services to the customers. </li></ul>
  6. 7. OM : Absent <ul><li>PEPSICO , channo, Sangrur </li></ul><ul><li>Concentrate of PEPSI + FRITO LAY </li></ul><ul><li>Fully automated and well managed plant </li></ul><ul><li>“ Department of operations management”- operations mangers </li></ul><ul><li>DOM, regulates all production and distribution related activities </li></ul><ul><li>Failure of OM </li></ul>
  7. 8. Major functions/areas of OM <ul><li>Purchase management </li></ul><ul><li>Management control and coordinating function </li></ul><ul><li>Productions management- goods & services </li></ul><ul><li>Quality management </li></ul><ul><li>Inventory management </li></ul><ul><li>Logistics & transport management </li></ul><ul><li>Facilities management </li></ul><ul><li>Configuration management-keeping the systems of organization up-to-date </li></ul><ul><li>Dispatch & distribution </li></ul><ul><li>All operations functions work in coordinated way for establishing an efficient OM in the organization. </li></ul>
  8. 9. Birth of OM <ul><li>18 th century- introduction of factory system to the world, mass production concept came into existence </li></ul><ul><li>19 th century-Management thinkers- scientific mode of management, moving assembly lines, sophisticated the operations in organizations </li></ul><ul><li>HRM, Marketing concepts introduced </li></ul><ul><li>To resolve sophisticated operations, operations managers started using mathematical models and scientific tools to manage operations. </li></ul><ul><li>Forecasting, Gantt charts, CPM (to connect different operations), linear programming </li></ul><ul><li>Finally with the incorporation of IT I organizations, Modern OM came into existence. </li></ul>
  9. 10. Buffering of operations <ul><li>Do business in Turbulent market conditions </li></ul><ul><li>Ex- food processing unit, cant predict the inflow of raw food material. </li></ul><ul><li>To minimize these market uncertainties- operations managers do buffering of operations. </li></ul><ul><li>Two type of buffering methods- physical buffering & organizational buffering </li></ul>
  10. 11. Physical Buffering <ul><li>Operations mangers maintain the stored resources (inventories of raw materials) at a level more then optimum level of storage. </li></ul><ul><li>So that if any disruption in the supply takes place, then operations can be protected by utilizing present inventory only- Buffer stock/safety stock. </li></ul>
  11. 12. Organizational Buffering <ul><li>In this mode of buffering we reduce and divide the responsibilities of operations functions. </li></ul><ul><li>Recruitment processes- HRM </li></ul><ul><li>Process technology- Technology department </li></ul><ul><li>So, by reducing and dividing the responsibilities of operations management, organizations try to protect the operations functions. </li></ul>
  12. 13. Companies <ul><li>Manufacturing companies- Goods </li></ul><ul><li>Ex- Agriculture, mining, fishing etc. </li></ul><ul><li>Service companies- Services </li></ul><ul><li>Ex- transportation, consultancy, finance etc </li></ul><ul><li>Mixed companies- Goods as well as services </li></ul>
  13. 14. Goods <ul><li>Any tangible, physical, touchable entity </li></ul><ul><li>Consumer goods- those goods that satisfy needs or wants of customers, manufactured by manufacturing companies </li></ul><ul><li>Durable goods- long span of life, goods that doesn't get disposed quickly. Ex- LCD. </li></ul><ul><li>Perishable goods- less span of life, goods that get consumed very rapidly. Ex- an ice-cream </li></ul>
  14. 15. <ul><li>Producer goods- that are physically required to produce consumer goods i.e. raw materials-used by manufacturing companies as inputs </li></ul><ul><li>Capital goods- those goods which are required for converting producer’s goods into consumer’s goods ex- machinery </li></ul>
  15. 16. Services <ul><li>Intangible, non-physical in nature </li></ul><ul><li>When you pay somebody to do something for you, you are buying a service </li></ul><ul><li>Service businesses- service companies that produce services by directly interacting with the customers, ex- airlines, hospitals etc. – Facility based services and field based services </li></ul><ul><li>Customer support services- provided by both manufacturing as well as service companies </li></ul><ul><li>Internal services- provided to internal customers of organization (IS) </li></ul>
  16. 17. Similarities <ul><li>Both of them provide value to customers </li></ul><ul><li>Both get produced by processes involving people & technology. </li></ul><ul><li>OM is required in both </li></ul><ul><li>Both can be Standardized </li></ul>
  17. 18. Dissimilarities <ul><li>Goods are tangible while services are intangible </li></ul><ul><li>The demand for services is more difficult to predict than the demand for goods. </li></ul><ul><li>Services cannot be stored as physical inventory </li></ul><ul><li>Patents do not protect services </li></ul>
  18. 19. Toyota <ul><li>MNC, headquartered in Japan </li></ul><ul><li>Founded by Kiichiro Toyoda in 1937 </li></ul><ul><li>As a manufacturing company, understands the need of efficient operations management in the company. </li></ul><ul><li>Dedicates its major portion of finance and Human power to well manage the operations in the organization </li></ul>
  19. 20. Just in Time <ul><li>Through JIT strategy, Toyota tries to minimize the efforts required in IMC function of OM </li></ul><ul><li>Operations managers at Toyota use various forecasting methods, mathematical models and analytical tools to get exact predictions about market demand. </li></ul><ul><li>On the basis of these analysis reports they plan the traffic of inventory in production plant </li></ul>
  20. 21. <ul><li>Each day material coming in plant gets consumed for production </li></ul><ul><li>And finished goods get distributed to outlets on same day </li></ul><ul><li>So there is no accumulation of inventory at all </li></ul><ul><li>This is called JIT strategy, that reduces inventory costs to a great extent </li></ul>
  21. 22. Flexible operations Technique <ul><li>Toyota believes in technology </li></ul><ul><li>Production lines of Toyota are highly flexible </li></ul><ul><li>Toyota produces different types and different models of vehicles </li></ul><ul><li>No two vehicles can have same technical specifications </li></ul><ul><li>So for a shift in production, different production and assembly lines need to be settled according to new product in demand </li></ul>
  22. 23. <ul><li>But in Toyota their production and assembly lines are extremely flexible. </li></ul><ul><li>So whenevr, there is a need of shift in production, production and assembly lines require only a few changes in linear programming to restart the production </li></ul><ul><li>For example- CNC lathe instead of gear cutting machines </li></ul><ul><li>To avoid market turbulence Toyota follows organizational buffering strategy. </li></ul>
  23. 24. <ul><li>Above given were only a few examples of operations management in Toyota. </li></ul><ul><li>By efficient operations magnet, Toyota became the world leader in automobile industry </li></ul><ul><li>So, operations management is quite necessary tool of effective management in organizations </li></ul>
  24. 25. THANK YOU