Download file at instashare.xyz Introduction to operation management, Importance, Scope, Transformation Process

1. Operation Management
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2. Learning Outcomes
In this unit we will discuss about:
• What is operation Management?
• Critical Responsibility of a Manager,
• Transformation Process,
• Operation as service,
• Historical Development of Operation Management,
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3. Learning Outcomes….
In this unit we will discuss about:
• JIT & TQC,
• Quality and Productivity,
• TQM and Quality Certification,
• Business Process Re-Engineering,
• Supply Chain Management.
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4. 4
The three basic functions of Management

5. Operations Management
• What is operations?
– The part of a business organization that is responsible for
producing goods or services
• How can we define operations management?
– The management of systems or processes that create
goods and/or provide services

6. Goods are physical items that include raw materials, parts,
subassemblies, and final products.
•Automobile
•Computer
•Oven
•Shampoo
Services are activities that provide some combination of time,
location, form or psychological value.
•Air travel
•Education
•Haircut
•Legal counsel
Good or Service?

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Operations Management is:
• A management function
• An organization’s core function
• In every organization whether Service or Manufacturing,
profit or Not for profit

8. Why Study OM?
• Every aspect of business affects or is affected by operations
• Many service jobs are closely related to operations
– Financial services
– Marketing services
– Accounting services
– Information services
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9. OM and Career Opportunities
• Operations manager
• Supply chain manager
• Production analyst
• Schedule coordinator
• Production manager
• Industrial engineer
• Purchasing manager
• Inventory manager
• Quality manager
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10. Scope of Operations Management
• Operations Management includes:
– Forecasting
– Capacity planning
– Scheduling
– Managing inventories

11. Scope of Operations Management
• Operations Management includes:
– Assuring quality
– Motivating employees
– Deciding where to locate facilities
– Supply chain management
– . . .

12. Importance of operation management
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Reduce
Cost
Increase
Revenue
Reduce
Investment
Innovation
Building

13. Operations
• Goods Producing
• Storage/Transportation
• Exchange
• Entertainment
• Communication
Examples
• Farming, mining, construction
• Warehousing, trucking, mail service,
moving, taxis, buses, hotels, airlines
• Retailing, wholesaling, banking,
renting, leasing, library, loans
• Films, radio and television, concerts,
recording
• Newspapers, radio and television,
newscasts, telephone, satellites
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14. Critical Responsibility of a Manager
• Strategic Decision Making
• Implement & Use ERP
• Automate Process
• Enhance the R&D effort.
• Reduce lag in implementation of projects
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15. Critical Responsibility of a Manager….
• Protect the Environment
• Act as a member in New Product Design & Development
• Strategic Relationship with Suppliers
• Technology Management
• Internal Quality Audit
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What is Role of OM?
• OM Transforms inputs to outputs
– Inputs are resources such as
• People, Material, and Money
– Outputs are goods and services

17. All parts of the organizations are operations
• Operations as a function :
Part of the organization which produces the products and services
for the organization's external customers.
• Operations as an activity :
Any processing of input resources in order to produce products
and services, for either internal or external customers.
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18. 18
OM’s Transformation Process

19. Characteristics of operation processes Inputs
Inputs – Transformation - Outputs
But these activities do differ in:
• V = The Volume of their output
• V = The Variety of their output
• V = The Variation in demand
• V = The degree of Visibility which customers have of the
product/service
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20. The Volume Dimension
High Volume Operations
• The transformation is highly
• Repeatability leads to
Specialization
• Specialization leads to
customization
• Customization is capital
intensive
• High volume leads to lower
unit cost
Low Volume Operations
• There is low repetition in
the repeatable
transformation process
• Employees perform more
than one task
• More tasks require less
systemization
• Low volume leads to high
unit costs
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21. The VARIETY dimension
Low Variety Operations:
• The transformation process
is well- defined
• Well-defined processes
requires standardized
processes
• Standardized
transformation processes
are very routinely by nature
• Low variety in the
transformation
processes leads to a
lower unit cost
High Variety Operations:
• The transformation process
can be highly flexible
• The transformation can
be highly complex
• The transformation
process meets the
customer’s specific
needs
• High variety operations
lead to high unit costs
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22. The VARIATION dimension
Low Variation Operations:
• The transformation process is stable
• The demand and output are
predictable
• There is a relatively high utilization of
inputs
• Low variation leads to low unit costs
• Organization must be able to change
capacity.
High Variation Operations:
• Operations needs to consider the
changing demand patterns
• Operations must be highly flexible.
• High unit cost
• Anticipation of customer behavior is
required
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23. The VARIATION dimension
Low Visibility Operations:
• Time lag between production and
consumption.
• The output from the transformation
is highly standardized.
• Employees in the process do not
require a high level of contact
(personal) skills.
• Low unit cost services.
High Visibility Operations:
• There is a short waiting tolerance.
• A high degree of customer contact
skills is required.
• There is a high degree of variety
present.
• The per-unit cost is very high.
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24. The implications of the four V’s
Implications for the cost of creating the product or service:
• High volume, low variety, low variation and low visibility help
to keep transformation costs down.
• Low volume, high variety, high variation and high visibility
carry a cost penalty for the transformation process and
organization as a whole.
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