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1 Operations Managementjncsickhbfijofcndw.pdf
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- 2. Operations Management “ OperationManagement is the management of activities that create goods and services through the transformation of inputs into outputs.” • Operations management is an area of management concerned with overseeing, designing, and controlling the process of production and redesigning business operations in the production of goods or services. • It deals with both Products and services.
- 3. The Operations areas: Subject Framework • Introduction To Operations Management 1.Operations in manufacturing 2.Operations in Services 3.Operations strategy • The production and manufacturing systems. • The Total quality control studies. • The lean concepts and six sigma introduction • Supply chain management concepts 3
- 4. Operations management • Itinvolves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in terms of meeting customer requirements. • The operations management involves the delivery of goods to customers. This includes ensuring products are delivered within the agreed time commitment. • Operations management also typically follows up with customers to ensure the products meet quality and functionality needs. 4
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- 6. Operations – ManufacturingProducts The new Boeing 777X will be the world’s largest and most efficient twin-engine jet, unmatched in every aspect of performance. With new breakthroughs in aerodynamics and engines, the 777X will deliver 10 percent lower fuel use and emissions and 10 percent lower operating costs than the competition. 6
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- 8. Operations: Quality, TQM,Six Sigma 8
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- 10. The Significance ofOperations Development
- 11. The Main Phases 1.Agrarian System 2. Pre Industrial system 3. Indutrial system 4. Service based economy 5. The experience economy
- 12. Industrial Revolution • ItChanged the entire system of Operations • The factory System • The use of Machines • The division of Labour • The standardization of parts and Interchangable parts.
- 13. Historical Development ofOM • Industrial revolution Late 1700s • Scientific management Early 1900’s • Human relations movement 1930s to 1960s • Management science Mid-1900s • Computer age 1970s • Just-in-Time Systems (JIT) 1980s • Total quality management (TQM) 1980’s • Reengineering 1990s • Flexibility 1990s • Time-Based Competition 1990s • Supply chain Management 1990’s • Global Competition 1990s • Environmental Issues 1990s • Electronic Commerce Late 1990s • Internet-Cloud Based Systems After 2000 AD • Artificial Intelligence • Internet of Things 13
- 14. Operations management in Services •The operations has the functional responsibility for producing the services of an organization and providing them directly to its customers • The six types of decisions made by operations managers in service organizations are: process, quality, capacity, scheduling, inventory, service supply chain, and information technology. 14
- 15. Services and Manufacturing Differences •There are 5 essential differences in terms of this : • Tangible-Intangible • Perishability • Heterogeneity • Simultaneity • The Customer Involvement 15
- 16. Manufacturing vs. Services CharacteristicManufacturing Service Output Tangible Intangible Customer contact Low High Uniformity of output High Low Labor content Low High Uniformity of input High Low Measurement of productivity Easy Difficult Opportunity to correct quality problems Easy Difficult 16
- 17. The Good-Services Continuum •The products offered are a combination of Goods and services. • There is a range from Pure goods To Pure services. 17
- 18. Servitization : Itis the concept that any product can be delivered ‘as a service’. •An example of this is Rolls-Royce ‘Power by the Hour’ model where no longer would they simply sell jet engines and warranties, they would instead offer the operator flight-hours – the responsibility would then be entirely on Rolls Royce to deliver the contracted number of hours whilst achieving certain availability metrics. •It helps in more care for the product and also more customer retention. 18
- 19. The latest inOperations • Artificial Intelligence • Machine Learning • IoT,IIoT • Big Data Analytics • Industry 4.0 SUSTAINABILITY
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- 21. Systems (Holistic) Approach •Emphasize interrelations among subsystems. • A systems approach is essential whenever something is being designed, redesigned, implemented, or improved. It is important to take into account the impact on all parts of the system. • Example: A new feature is added to a product. – Designer must take into account how customers will view the change, instructions for using new feature, the cost, training of workers, production schedule, quality standard, advertising must be informed about the new feature. 21 “The whole is greater than the sum of the parts.”
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- 23. • Strategy (fromGreek stratēgia, "art of troop leader; office of general, command, generalship) is a high level plan to achieve one or more goals under conditions of uncertainty. • Strategy is important because the resources available to achieve these goals are usually limited. • Strategy generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). Strategy
- 24. Operations Strategy •A planspecifying how an organization will allocate resources in order to support infrastructure and production. •An operations strategy is typically driven by the overall business strategy of the organization, and is designed to maximize the effectiveness of production and support elements while minimizing costs. •A plan of action implemented by a firm that describes how they will employ their resources in the production of a product or service. •An operational strategy is a necessary element for a business and supports the firm's corporate strategy.
- 25. Operations Strategy Example Strategy Process CustomerNeeds Corporate Strategy Operations Strategy Decisions on Processes and Infrastructure More Product Increase Org. Size Increase Production Capacity Build New Factory
- 26. • Operational effectivenessmeans performing similar activities better than rivals perform.
- 27. Competitive Dimensions • Cost •Quality • Speed • Dependability • Flexibility
- 28. Dealing with Trade-offs Cost Quality Delivery Flexibility Forexample, if we improve customer service problem solving by cross-training personnel to deal with a wider-range of problems, they may become less efficient at dealing with commonly occurring problems. For example, if we reduce costs by reducing product quality inspections, we might reduce product quality.
- 29. Straddling • It occurswhen a company seeks to match the benefits of a successful position while maintaining its existing position. • It adds new elements to its product or service. • Occurs when a company seeks to match what a competitor is doing by just adding new features, services, or technologies to existing activities. This often creates problems due to the compromises that may need to be made. • Example Continental trying to copy South west Operations by setting up continental lite. "airline within an airline"
- 30. Order Qualifiers andWinners •Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers •Order winners are the criteria that differentiates the products and services of one firm from another
- 31. Strategic Decision inOperations Options
- 32. Operation Strategy Options ProductPortfolio • Product portfolio pertains to decisions on – what products the organization wants to produce – the number of variations in each product line – the extent of customization offered to customers • Product portfolio as a strategic option – Wide product portfolio: Overall strategic objective is to provide highly differentiated set of products and services to the customer eg Unilever – Narrow product portfolio: Overall strategic objective is one of cost leadership eg : Ferrari
- 33. Operation Strategy Options ProcessChoices – Continuous streamlined flow – Intermittent or batch flow – Jumbled flow • Choice of process will be consistent with product portfolio decisions – A manufacturer emphasizing on production volumes, fewer varieties and less cost will make process choices pertaining to continuous streamlined flow (Hero Honda) – An organization wishing to satisfy an objective of providing wide range of products to the customers will adopt batch/intermittent flow type the need to provide a very large variety and practically a production volume of one or few will adopt jumbled flow (BHEL)
- 34. Operation Strategy Options SupplyChain issues • Supply chain refers to the network of entities supplying components and raw material to an organization as well as those distributing the finished goods of an organization to the customers through alternative channels • Designing an appropriate supply chain calls for a better understanding of the product profile for which the supply chain is configured • Two types of supply chains can be configured: – Efficient supply chain: objective is cost optimization and better utilization of resources employed in supply chain operations; typically used in the case of functional products (machine tools, engineered equipments) – Responsive supply chain: the key objective is to develop a capability to respond fast to the market requirements; typically used in the case of innovative products (iPhone, Fancy Garments, trendy Electronics Goods)
- 35. Ten Critical Decisions 1.Design of goods and services 2. Managing quality 3. Process and capacity design 4. Location strategy 5. Layout strategy 6. Human resources and job design 7. Supply-chain management 8. Inventory, MRP, JIT 9. Scheduling 10. Maintenance
- 36. The Critical Decisions 1.Design of goods and services – What good or service should we offer? – How should we design these products and services? 2. Managing quality – How do we define quality? – Who is responsible for quality? 3. Process and capacity design – What process and what capacity will these products require? – What equipment and technology is necessary for these processes? 4. Location strategy – Where should we put the facility? – On what criteria should we base the location decision?
- 37. The Critical Decisions 5.Layout strategy – How should we arrange the facility? – How large must the facility be to meet our plan? 6. Human resources and job design – How do we provide a reasonable work environment? – How much can we expect our employees to produce? 7. Supply-chain management – Should we make or buy this component? – Who should be our suppliers and how can we integrate them into our strategy? 8. Inventory, material requirements planning, and JIT – How much inventory of each item should we have? – When do we re-order?
- 38. The Critical Decisions 9.Intermediate and short–term scheduling – Are we better off keeping people on the payroll during slowdowns? – Which jobs do we perform next? 10. Maintenance – How do we build reliability into our processes? – Who is responsible for maintenance?
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