The document covers the fundamentals and importance of operations management, highlighting its role in transforming inputs to outputs while maintaining competitiveness in quality, cost, and service. It discusses various interfaces between operations management and other business functions such as marketing, human resources, finance, and IT, as well as the emerging challenges and strategic objectives within the field. Additionally, it contrasts traditional manufacturing methods with Industry 4.0 practices and presents the balanced scorecard as a tool for measuring business performance.

1. OPERATIONS
MANAGEMENT
FUNDAMENTALS

2. Definition of Operations
Management
• Management of business (transformation
or value addition) processes
• How to align the processes and manage
resources to develop the appropriate
capabilities to convert inputs to outputs
(transformation process).

3. Importance of Operations
Management
• During the past couple of decades, competitiveness in
the marketplace has brought the focus on cost, quality
and high service level
• Todays Customer wants a high quality product at a
competitive cost and at the shortest time
• World-class performance by operations in delivering
high-quality, cost-competitive products and services is
essential for survival in today's global economy.
• Therefore, cost saving measures ( lean manufacturing),
improved manufacturing process via automation and
digitization is becoming important which highlights the
important role of Operations
• New Government Initiatives – Make in India initiative
India Infrastructure
Pipeline

4. Inputs Outputs
Goods /
Services
Feedback
for control
Transformation:
Network of activities
Man, Machine,
Material,
Information,
Skills, etc.
Operations
Management
Operations as a Transformation
Process

5. SCOPE OF OPERATIONS
MANAGEMENT
PROJECT MANAGEMENT
- is a temporary process to create unique products, services or results
MANUFACTURING
- An ongoing activity that produces repetitive and long-term outputs
like production of steel, cement etc
SERVICES OPERATION
- An activity that has both tangible and intangible elements
-

6. Transformation Processes-Types
• Physical Manufacturing
• Locational Transport/storage
• Exchange Retail
• Physiological Healthcare
• Psychological Entertainment
• Informational Communications
Transformation
Input Output

7. Example -Food Processing Plant –
Transformation Process
Inputs Processing Outputs
Raw Vegetables Cleaning Canned
vegetables
Metal Sheets Making cans
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment

8. Hospital – Transformation Process
Inputs(Patients) Processing Outputs
Doctors, nurses Examination Healthy
Customers
Hospital Surgery
Medical Supplies Monitoring
Equipment Medication
Laboratories Therapy

11. CONTINUOUS PRODUCTION – ASSEMBLY LINE

12. INTERMITTENT PRODUCTION - BATCH

13. THERMAL POWER GENERATION

17. Interface between OM and
Marketing
• What operations can do relative to
meeting due dates, product
customization, new product introduction.
• In service industries, marketing and
production take place simultaneously ?

18. Interface Between OM & Human
Resources
• How jobs are designed?
• Compensation and incentive programs.
• Skills of work force.
• Work Study comprising of Method Study
and Work Measurement

19. Interface Between OM and
Finance
• Understand inventory management, capacity
utilization and labour standards to develop
accurate cost data, perform audits, and prepare
financial reports.
• Need for capital investments.
• Working Capital Management
• Forecast cash flows.
• Make-or-buy decision.
• Plant expansion and/or relocation.

20. Interface Between OM & IT
• Application of software for Project Planning,
Monitoring and Control
• Business applications of computers in production
planning & control.
• Application for software for Predictive
Maintenance
• Software for actual operation of the machine
( like CNC Machine, Automatic Welding) and for
Material Handling

21. OPERATIONS
AND
OTHER FUNCTIONS

22. EMERGING ROLE OF OPERATIONS
MANAGER
• Take part in Strategic Decision Making
• Take Decisions regarding outsourcing of business processes
• Act as member of engineering team for new product design and
development
• Take care of issues relating to service operations management
• Implement the environmental and pollution norms
• Act as supply chain manager for forging long term strategic relationship
with suppliers
• Technology management due to JVs with MNCs
• Oversee timely implementation of projects to meet increased competition.
• Man management, leadership role and mentoring.

23. Challenges before Operations
Management
• During the past couple of decades, competitiveness in
the marketplace has brought the focus on cost, quality
and high service level
• Todays Customer wants a high quality product at a
competitive cost and at the shortest time
• World-class performance by operations in delivering
high-quality, cost-competitive products and services is
essential for survival in today's global economy.
• Therefore cost saving measures ( lean manufacturing),
improved manufacturing process via automation and
digitization is becoming important which highlights the
important role of Operations

25. TRADITIONAL
VS INDUSTRY
4.0
PARAMETER
TRADITIONAL
MANUFACTURING
INDUSTRY 4.0
Process Rigid and Manual Agile and automated
Product Standardized Personalized and customized
Scale of
Factories
Large factories at centralized locations Small Factories at decentralized locations
Supply Chain Stock based planning Dynamic and predictive
Success Metric Low cost high efficiency High return on capital employed
Client Relationship Low and indirect High and direct

26. • Operations - Strategy
• Product/Service Design
• Process Selection
• Site Selection
• Facility Layout
• Capacity Planning
• Project Management
• Services Operation
• Lean Manufacturing
• Demand
Management
MRP/ERP
• Production Planning
and Scheduling
• Materials
Management
• Supply Chain Mgmt
• Quality Control
OM Deals With

27. Pre-manufacturing
activities
Gear
Components
Prismatic
Componen
t s
Other
rotating
parts
Sheet
Metal
parts
Housing
s
Shaft
s
Assembly & Test Assembly & Test Assembly & Test
Product A Product B Product C
Dedicated Manufacturing Support for
the products
PROCESS DESIGN FOR
INTERMITTENT FLOW (JOB
SHOP TYPE)

28. COMPLEXITY OF OPERATIONS MANAGEMENT
SOME INDICATORS
Greater Variety in
•
•
•
Products, Models,
Process Routings,
Technology
choices
High
Low
Intermittent Flow
Continuous Flow
Made to Order
Assemble to Order
Made to Stock
More stages
in Production
Jumbled
Flow

29. FACTORS INFLUENCING PROCESS
CHOICES
• Volume: Average quantity of the products produced in a manufacturing system
– Low volume: Turnkey project management firms such as L&T and BHEL
– High volume: Consumer non-durable and FMCG sector firms, Automobile, Chemical Processing
– Mid-volume: Consumer durables, white goods and several industrial products
• Variety: Number of alternative products and variants of each product that is offered by a
manufacturing system
– Variety of product offerings is likely to introduce variety at various processes in the system; alternative production
resources, materials, and skill of workers
• Flow: Flow indicates the nature and intensity of activities involved in conversion of components
and material from raw material stage to finished goods stage

30. Intermittent Vs Continuous Production
• 1)Same product is not
produced continuously
• 2)Items produced as per
customer order
• 3)Production process
flexible
• 4)Units of
production-low
• 5)Planning and control
process complicated
• 6)Cost of production(per
unit) may be high
• 1)Same product is
produced continuously
• 2)Items produced for
stock
• 3)Process not flexible
• 4)Units of production-high
• 5)P&C process is Simple
• 6)Cost of production(per
unit) may be low

31. Intermittent Vs Continuous
Production
• 7)Functional type of
organisation
• 8)Requires staff of high
technical skill and ability
• 9)Product and process not
standardised
• 10)More detailed and too
many instructions required
during execution
• 7)Divisional type of
organisation
• 8)Requires moderate to
low skills
• 9)Standardised process
and product
• 10) Simple/repetitive
instructions

33. STRATEGIC ROLE AND OBJECTIVES OF OM

34. TEN DECISIONS OF OPERATIONS MANAGEMENT
• Goods and Services
• Quality Management
• Process and Capacity Design
• Location
• Layout Design
• Human Resources and Job Design
• Supply Chain Management
• Inventory
• Scheduling
• Maintenance

35. OPERATIONS STRATEGY
• Operations Strategy should be in line with vision and mission of the firm
• For gaining competitive advantage firm should compete on
- Cost
- Speed
- Quality
- Flexibility

36. BALANCED SCORECARD
 IS A STRATEGIC MANAGEMENT PERFORMANCE MATRIX THAT HELPS COMPANIES
IDENTIFY AND IMPROVE ITS PERFORMANCE
 MEASURES PAST PERFORMANCE DATA AND PROVIDES ORGANIZATION WITH FEEDBACK
AND HOW TO MAKE BETTER DECISIONS IN FUTURE
 INTRODUCED BY KAPLAN AND NORTON OF HBS
 PERSPECTIVE OF BALANCED SCORECARD
- Financial Perspective
- Customer Perspective
- Internal Business Process Perspective
- Organizational Capacity Perspective

37. BALANCED SCORECARD

38. BALANCED SCORECARD ( EXAMPLE)

39. BALANCED SCORECARD - ADVANTAGES
• Presents complete view of Business performance
• Relevant not just for financial stakeholders
• Encourages long term strategy