Mba om 04_the role of technology in operations
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Topic: Operations Management, Degree: MBA, Semester: II Syllabus: Mysore University. Date : Jan 2015. Please note: This was prepared as a teaching aid. Not for commercial purposes. Sharing to spread the knowledge of operations management. Note : Copyright belongs to respective owners. List of top references used to prepare these slides given. If you have any questions, comments, improvement suggestions, Email to: niranjanakoodavalli@gmail.com
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Mba om 04_the role of technology in operations
- 1. Operations Management Author: Prof. Niranjana K.R. B.E. (Mech), PGDM, SSBB, LA ISO9001 & AS9100, Member – PMI & QCFI Email: niranjanakoodavalli@gmail.com
- 3. References 1. Study Material for OM-01, Operations Management, - All India Management Association (AIMA), CME. 2. Modern Production/Operations Management, - Elwood S. Buffa, Rakesh K.Sarin, 8th Edition, WILLY 3. Cases in Operations Management,- K.N. Krishnaswamy, M.Mathirajan, PHI 4. Operations Management – An Integrated Approach, by R. Dan Reid, Nada R. Sanders, 5th Edition, Wiley ,2012. 5. Operations Management – by Linda L. Brennan, Ph.D., Mc-GRAW HILL, 2011. 6. Operations Management – by S. Anil Kumar, N. Suresh, New Age International Publishes, 2009. 7. Operations Management 6th Ed.- by Nigel Slack, Stuart Chambers, Robert Johnston -Pearson Education Limited ,2010 . 8. Key Concepts in Operations Management – by Michel Leseure, SAGE Publications Ltd., 2010. 24-08-2016 3Author: Niranjana K.R.
- 4. Author: Prof. Niranjana K.R. B.E. (Mech), PGDM, SSBB, LA ISO9001 & AS9100, Member – PMI & QCFI Email: niranjanakoodavalli@gmail.com The Role of Technology in Operations
- 5. Chapter Objectives • Introduce the different ways in which technology can add value to the operations function within an organization. • Identify the various ways in which technology can be used in a manufacturing company. • Describe enterprise resource planning (ERP) systems and how they impact an organization. • Demonstrate the different ways in which technology can be integrated into service operations. • Present a framework for defining the different types of e- services that are currently being offered. 24-08-2016 5Author: Niranjana K.R.
- 6. Managerial Issues • Advances in technology are changing the way in which both manufacturing and service operations are designed. • Technology is a tool, not an end in itself. • Importance of maintaining compatibility between technology and the organization’s other elements. • The need for continuous training in the use of technology. 24-08-2016 6Author: Niranjana K.R.
- 7. How Technology Affects Operations • Traditional Tradeoffs – Low costs – Speed of delivery – Quality of product/service – Customization • Technology’s Impact on Traditional Tradeoffs – Tradeoffs are no longer valid—technology allows firms compete on several dimensions at once. 24-08-2016 7Author: Niranjana K.R.
- 8. Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 2–8 Example of Trade-Offs on Superior Performance Curves Exhibit 2.4
- 9. How Technology Impacts Operational Performance Exhibit 4.1 24-08-2016 9Author: Niranjana K.R. Performance Curve
- 10. Technology in Manufacturing Automation Development Machining centers Operations where tools are change automatically as part of the process. Numerically controlled (NC) machines Manufacturing equipment that is directly controlled by a computer. Industrial robots Programmable machines that can perform multiple functions. Computer-aided (or –assisted) design Designing a product using a specially equipped computer. Computer-assisted design and manufacturing system (CAD/CAM) Integration of design and production of a product through use of a computer. 24-08-2016 10Author: Niranjana K.R.
- 11. Technology in Manufacturing (cont’d) Automation Development Flexible manufacturing system (FMS) Manufacturing facility that is automated to some extent and produces a wide variety of products. Computer-integrated manufacturing (CIM) Integration of all aspects of manufacturing through computers. Islands of automation Automated factories or portions which include NC equipment, automated storage/retrieval systems, robots, and machining centers. 24-08-2016 11Author: Niranjana K.R.
- 12. Major Categories of Software Systems in Manufacturing Exhibit 4.2 24-08-2016 12Author: Niranjana K.R.
- 13. Information Technology Software Systems Enterprise Resource Planning (ERP) Provides a common software infrastructure and database. Supply Chain Management (SCM) Controls interaction with suppliers in the overall supply chain. New Product Development (NPD) Links the engineering function with the operations function. Customer Relationship Management (CRM) Manages the interface between the firm and its customer. 24-08-2016 13Author: Niranjana K.R.
- 14. Functional Areas as Independent Operations Exhibit 4.3a 24-08-2016 14Author: Niranjana K.R.
- 15. ERP Systems Link Functional Areas with a Common Software Platform and Database Exhibit 4.3b 24-08-2016 15Author: Niranjana K.R.
- 16. Example of How SAP’s R/3 System Integrates an Organization Exhibit 4.4 24-08-2016 16Author: Niranjana K.R.
- 17. Leading ERP Software Companies and Respective Market Shares Exhibit 4.5 Source: AMR Research Total ERP Software and Services Revenue = $18.2 billion 24-08-2016 17Author: Niranjana K.R.
- 18. Evolution of ERP Systems • ERP Systems Origins – An outgrowth of Materials Requirements Planning (MRP) systems in the 1960s–70s – Adoption of ERP systems updated the entire information technology infrastructure of firms. • Benefits of ERP Systems – Reduction in database errors – Faster customer response – Faster order fulfillment – Better overall communication 24-08-2016 18Author: Niranjana K.R.
- 19. Evolution of ERP Systems (cont’d) • Why ERP Systems Fail – Lack of top management commitment – Lack of adequate resources – Lack of proper training – Lack of communication • Criticisms of ERP Systems – Constraints of a single ERP system versus a mixture of Best of Breed software products – Inflexibility of the built-in business model of ERP systems 24-08-2016 19Author: Niranjana K.R.
- 20. Technology Trends in Services • Increase in Self-Service – Reduces labor costs – Speeds up service • Decrease in the Importance of Location – Lower costs for delivery of products and services increases remote points of access and reduces the need for specific service locations 24-08-2016 20Author: Niranjana K.R.
- 21. Methods of Pricing to Encourage Self-Service Exhibit 4.6 24-08-2016 21Author: Niranjana K.R.
- 22. Technology Trends in Services (cont’d) • Shift from Time-dependent (Synchronous) to Non-time Dependent (Asynchronous) Transactions – More economical (for the firm) and efficient (for the customer) forms of service • Increase in Disintermediation – Technology brings buyers and sellers closer together, eliminating intermediate steps or organizations. 24-08-2016 22Author: Niranjana K.R.
- 23. Integrating Technology into Services • Integration Benefits – Efficiency in operations – Effectiveness in serving customers • Areas for Integration – Strategic planning – Improved performance • Faster service • Improved customer knowledge • Increased product customization 24-08-2016 23Author: Niranjana K.R.
- 24. Integrating Technology into Services (cont’d) • Areas for Integration (cont’d) – Increased efficiency • Economies of scale in consolidating operations. • Reduced labor costs through replacement of manpower and increased labor productivity. 24-08-2016 24Author: Niranjana K.R.
- 25. Categories of E-Services Category Function Internet World-wide web presence with open access to all. Intranet Internal network providing limited access by individuals within an organization. Extranet A resource-limited network open only to specified internal and external users Electronic Data Interchange (EDI) A network designed to support the exchange of data between the organization and its vendors and suppliers. Value-added network (VAN) A third party service that is used in conjunction with EDI to provide the link to customers and suppliers. 24-08-2016 25Author: Niranjana K.R.
- 26. The Role of the Internet, Intranet, Extranet and EDI in an Organization Exhibit 4.7 24-08-2016 26Author: Niranjana K.R.
- 27. Types of E-Services Broad Categories Specific Service Types Business-to-Consumer (B2C) E-tailers (Goods and Services) Consumer-to-Consumer (C2C) Customer Support Business-to-Business (B2B) Network Providers Government-to-Business (G2B) Information Providers Government-to-Consumer (G2C) Application Service Providers (ASPs) 24-08-2016 27Author: Niranjana K.R.
- 28. Challenges for E-Tailers • Infrastructure – Developing the structure to efficiently and quickly deliver goods to customers. • Lack of tangibility – Having no physical presence to which customers can turn with problems. • Differentiation – Creating a unique on-line presence that sustains growth. 24-08-2016 28Author: Niranjana K.R.
- 29. Technology Issues • Overcoming Barriers to Entry (Customer) – “Fear of the unknown” – Lack of knowledge by the customer • Training and Support – Worker skill development through hands-on training in the new technology. – Customer familiarization with technology. 24-08-2016 29Author: Niranjana K.R.
- 30. 24-08-2016 Author: Niranjana K.R. 30
Editor's Notes
- Operations strategy defines the way in which a firm competes in the marketplace. Examples of these strategies include (a) low cost, (b) quality, (c) speed of delivery, and (d) customization. Managers in the past had to decide which of these strategies was most applicable to the particular market segment they were serving. In so doing, they recognized that there were trade-offs involved. For example, you couldn’t have both low cost and a high degree of customization, or that there was a choice to be made between providing fast product delivery and providing a highly customized product. These traditional trade-offs are no longer valid for most businesses because technology has “raised the performance bar” by allowing firms to compete on several of these dimensions simultaneously. For example, firms using technology, such as Dell Computer, can now produce and quickly deliver individually customized products, and at a very competitive price. Technology now provides firms with the opportunity to move to a “superior” performance curve. In moving from A1 to B1, a firm, for example, can achieve superior performance in terms of both lower cost and also faster service. In comparison, a firm that doesn’t use technology must remain on Curve A and consequently must revert to the traditional trade-off where improvement in one dimension is accomplished only at the sacrifice of another dimension (for example, in going from A2 to A3 along Curve A, where lower cost is achieved only by providing slower service).
- Electronic governance or e-governance is the application of information and communication technology (ICT) for delivering government services, exchange of information communication transactions, integration of various stand-alone systems and services between government-to-customer (G2C), government-to-business (G2B), government-to-government (G2G) as well as back office processes and interactions within the entire government framework.[1] Through e-governance, government services will be made available to citizens in a convenient, efficient and transparent manner. The three main target groups that can be distinguished in governance concepts are government, citizens and businesses/interest groups. In e-governance there are no distinct boundaries.[2] Generally four basic models are available – government-to-citizen (customer), government-to-employees, government-to-government and government-to-business.[2] B2C - Business-to-customer marketing refers to the tactics and best practices used to promote products and services among consumers. Targeting consumers across digital channels E-tailers: One that sells goods or commodities to consumers electronically, as over the Internet. Ex:ebay, Amazon, Myntra etc. 'Customer To Customer (C2C)' A business model that facilitates an environment where customers can trade with each other. Two implementations of customer-to-customer markets are auctions and classifieds. Business-to-business (B2B) is commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G). Government-to-Business (G2B) is the online non-commercial interaction between local and central government and the commercial business sector with the purpose of providing businesses information and advice on e-business 'best practices'. G2B:Refers to the conduction through the Internet between government agencies and trading companies. B2G:Professional transactions between the company and the district, city, or federal regulatory agencies. B2G usually include recommendations to complete the measurement and evaluation of books and contracts.