R & s of o.m.


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R & s of o.m.

  2. 2. OPERATION MANAGEMENT<br />It is the science and art of ensuring that goods and services are created & delivered successfully to customers. <br />It is Organization’s core function. Every organization has OM function<br /><ul><li>Service or Manufacturing
  3. 3. For profit or Not for profit</li></li></ul><li>NATURE & PURPOSE<br /> The fundamental purpose of O.M. is to deliver ever-improving value to the customersthrough the continuous improvement of overall company performance & capabilities .<br /> O.M. is the only means by which managers can directly affect the value provided to all stakeholders- customers, employees, investors & society.<br />
  4. 4. Operations as a System<br />Production System<br />Conversion<br />Subsystem<br />Inputs<br />Outputs<br />Control<br />Subsystem<br />
  5. 5. Operations function The Transformation Model<br />Input<br />Transformed<br />resources<br />Environment<br />Materials<br />Information<br />Customers<br />Goods<br />And<br />services<br />THE <br />TRANSFORMATION PROCESS<br />OUTPUT<br />INPUT<br />Facilities<br />Staff<br />Environment<br />Input<br />Transforming<br />resources<br />
  6. 6. RESPONSIBILITIES OF OPERATION MANAGER<br /> Designing the operations system<br /> Managing the operations system<br /> Improving the operations system.<br /> These three decisions are taken on the basis of other five key points, that are called Pillars or Parameters.<br />
  7. 7. FIVE PARAMETERS<br />The processes by which goods and services are produced.<br />The quality of goods or services<br />The quantity of goods or services (the capacity of operations)<br />The stock of materials (inventory) needed to produce goods or services<br />The management of human resources.<br />
  8. 8. 8<br />PROCESS MANAGEMENT<br />Planning the activities necessary to achieve high quality in business processes; <br />Identifying opportunities for improving quality.<br />Process simplification reduces opportunities for errors and rework.<br />A process must be repeatable and measurable.<br />
  9. 9. PROCESS IMPROVEMENT<br />Customer loyalty is driven by delivered value.<br />Delivered value is created by business processes.<br />Sustained success in competitive markets require a business to continuously improve delivered value.<br />To continuously improve value creation ability, a business must continuously improve its value creation processes.<br />
  10. 10. EXAMPLE OF PROCESS IMPROVEMENT<br />The Toyota Production System—had been widely credited for Toyota's sustained leadership in manufacturing performance.<br />Toyota implemented Just-In-Time which relies on zero defects and hence continuous improvement! . What they deduced from this system is that it can be placed into five groups called the five zeros. These five zeros are, zero paper, zero inventories, zero downtime, zero defects and zero delay.<br />
  11. 11. 11<br />QUALITY TRILOGY<br /><ul><li>Quality planning: Meeting quality goals. Involves understanding customer needs and developing product features.
  12. 12. Quality control: Meeting quality goals during operations. Control parameters. Measuring the deviation and taking action.
  13. 13. Quality improvement: Identify areas of improvement and get the right people to bring about the change.</li></li></ul><li>12<br />Quality perspectives<br />Typical responses about the definition of quality would include:<br />Perfection<br />Consistency<br />Eliminating waste<br />Speed of delivery<br />Compliance with policies and procedures<br />Doing it right the first time<br />Delighting or pleasing customers<br />Total customer satisfaction and service<br />
  14. 14. 13<br />Example of Quality perspectives<br />Judgmental perspective<br />“Goodness of a product.”<br />Examples of products attributing to this image: Rolex watches, Lexus cars.<br />Product-based perspective<br />“Function of a specific, measurable variable and that differences in quality reflect differences in quantity of some product attributes.”<br />Example: Quality and price perceived relationship.<br />
  15. 15. 14<br />Example of Quality perspectives<br />User-based perspective<br />“Fitness for intended use.”<br />Individuals have different needs and wants, and hence different quality standards.<br />Example – Nissan offering ‘dud’ models in US markets under the brand name Datson which the US customer didn’t prefer.<br />Value-based perspective<br />“Quality product is the one that is as useful as competing products and is sold at a lesser price.”<br />US auto market – Incentives offered by the Big Three are perceived to be compensation for lower quality.<br />
  16. 16. 15<br />Quality perspectives<br />Manufacturing-based perspective<br />“The desirable outcome of a engineering and manufacturing practice, or conformance to specification.”<br />Engineering specifications are the key!<br />Example: Coca-cola – “quality is about manufacturing a product that people can depend on every time they reach for it.”<br />
  17. 17. QUANTITY/CAPACITY MANAGEMENT<br /> The capacity of a production unit (e.g. machine, factory) is its ability to produce or do that which the customer requires. In operations management, three types of capacity are:<br />Potential Capacity<br /> The capacity that can be made available to influence the planning of senior management (e.g. in helping them to make decisions about overall business growth, investment etc). <br />Immediate Capacity<br /> The amount of production capacity that can be made available in the short-term. This is the maximum potential capacity - assuming that it is used productively<br />Effective Capacity<br /> Not all productive capacity is actually used or usable. It is important for production managers to understand what capacity is actually achievable.<br />
  18. 18. INVENTORY MANAGEMANT<br /> An organization's buildings, facilities, equipment and stock are directly involved in or support the operations function.<br /><ul><li>Procurement.
  19. 19. Re-order time.
  20. 20. Supply chain management.</li></li></ul><li>HUMAN RESOURCE MANAGEMENT<br />Creating a high performance workplace by motivating & developing the skills of employees.<br />Continually learning from co-workers, competitors & customers.<br />Adapting the organization to global & environmental changes. <br />
  21. 21. COST MANAGEMENT<br /> Most of the costs of producing goods or services are directly related to the costs of acquiring resources, transforming them or delivering them to customers. For many organizations, driving down costs through efficient operations management gives them a critical competitive edge. <br /><ul><li>Creating more value with lower cost.</li></li></ul><li>CHALLENGES FACED BY OPERATION MANAGER<br />To remain competitive, industrial organizations are continually faced with the challenges to improve product quality, reduce product development time, reduce production costs and lead-times. Increasingly, these challenges cannot be effectively met by isolated changes to specific organizational units.<br />
  22. 22. Changing Challenges for the Operations Manager<br />
  23. 23. Changing Challenges for the Operations Manager<br />
  24. 24. THANK YOU<br />