Operations management involves transforming inputs like materials, equipment, and workers into outputs like goods and services through various processes. It has evolved over time with developments like the industrial revolution, scientific management, and total quality management. Key topics in operations management include designing products/services, managing quality, determining processes and capacity, supply chain management, and inventory management. Operations strategy sets broad policies for using a firm's resources in a way that is integrated with its overall corporate strategy. It involves determining competitive priorities like cost, quality, flexibility, or speed. Strategic operations decisions must be made regarding products/services, processes/technology, capacity/facilities, human resources, quality, sourcing, and operating systems.

2. What is operations management
Materials
Customers
Information
Inputs
• Equipment
•Capacity
•Flexibility
•Reliability
Workers
Work
assignments
Performance
Reliability
Inventory
Function
Form
Amount
Transformation
process
Goods
services
Outputs

3. History of OM
Era Events/Concepts Dates Originator
Industrial revolution Steam engine 1769 James Watt
Division of labour 1776 Adam Smith
Interchangeable parts 1790 Eli Whitney
Scientific management Principles of scientific management 1911 Fredrick W Taylor
Time and motion studies 1911 Frank and Lillian Gilbreth
Moving assembly line 1913 Henry Ford
Human relations Hawthorne studies 1930 Elton Mayo
Motivation theories 1940s-
1960s
Abraham Maslow, Herzberg,
McGregor
Operations research Linear programming 1947 George Dantiz
Digital computer 1951 Remington Rand
Simulation, waiting line theory
decision theory, PERT, CPM
1950s
MRP, EDI,EFT, CIM 1960s Joseph Orlicky, IBM and others

4. Era Events/Concepts Dates Originator
Quality revolution JIT (Just in time) 1970s Taiichi Ohno (Toyota)
TQM (Total quality management) 1980s W. Edwards Deming Juran
Strategy and operations Wickham Skinner, Robert Hayes
Business process reengineering 1990s Michael Hammer, James
Champy
Globalization World trade organization European
Union and other trade agreements
1990s Multiple countries
Internet revolution Internet WWW 1990s
ERP, supply chain management 1990s SAP, ORACLE
E commerce 2000s Amazon, Yahoo eBay
Service science 2000s
Business Analytics Mid2010s
History of OM

5. Evolution of Production Technology
1880
• Slow progress in
science and
technology
• Agricultural
society
• Industrial
revolution
1880
• Scientific
management
• Time studies
• Division of
labour
• Standardisation
• Mass production
• Labour unions
1900
• Organisational
concepts
• Motion study
• piecework
1920
• Production
control
• Queueing
• Wage incentive
• Inventory models
• Management
planning
• SQC

6. 1940
• Tool design
• Productivity
• Engg. Economy
• Inventory theory
• Human factors
• Materials
handling
• Layout
1950
• Computerisation
• Reliability
• Operations
research
• Statistical
analysis
• Network
techniques
1960
• Automation
• System design
• Teleprocessing
• Information
systems
• Decision theory
• Simulation
• “Systems” engg.
• Optimization
theory
1970
• Control theory
• Large scale
system
• Total system
design
• Social systems
• Cybernatics
• Behavioural
theory
• Personal
computers
2000s
• Internet, WWW
• ERP I, ERP II
• Supply chain
management
• E commerce
• Service science
• Data analytics
Evolution of Production Technology

7. Primary topics in Operations Management
• Design of goods and services
• Managing quality
• Process and capacity strategy
• Location strategy
• Layout strategy
• Human resources and Job design
• Supply chain management
• Inventory management
• Scheduling
• Maintenance

8. Operations strategy
Session 2

9. Operations Strategy
• It is concerned with setting broad policies and plans for using the
resources of a firm and must be integrated with corporate strategy.
• Strategy is a common vision that unites an organization, provides
consistency in decisions, and keeps the organization moving in the
right direction. It can be defined by four generic steps
• Defining a primary task – Defining mission and vision
• Assessing core competencies – provide competitive advantage
• Determining order winners and order qualifiers – determine what influences
the purchasing decision
• Positioning the firm – choosing one or two important things on which to
concentrate and doing them extremely well

10. Competitive priorities/differentiation
• Competing on cost
• Indigo
• Competing on quality
• Sony
• Competing on flexibility
• Change in volume, variety
• Dell, Amazon
• Competing on speed
• Delivery, new product introduction
• Amazon prime
• Delivery reliability

11. Strategic decisions in operations
• Products and services
• Make-to-order, make-to-stock, assemble-order
• Process and technology
• Project, batch production, mass production, continuous production
• Capacity and facilities
• Capacity decisions affect lead times, customer responsiveness, operating costs and a
firms ability to compete
• Human resources
• Determining the skill levels, degree of autonomy required, training requirements,
selection criteria, performance evaluation
• Quality
• Target level of quality, how it will be measured, employee involvement, quality
ensurance system, determining the customer perception on quality, etc

12. • Sourcing
• How much of the work is to be done outside the firm what should be made
in-house, supplier selection, supplier relationship, number of suppliers, etc.
• Operating systems
• IT systems, Planning and control systems, Inventory levels, scheduling
priorities
Strategic decisions in operations