2. Operations Management
• The Field Of OM
• Production Systems
• Functional Dep't. Of OM
• Historical Development of Operations Management
• Manufacturing and Service operations characteristics
• Role of OM
Session 1
• Roles of Operation Manager
• Current Issues pertaining to OM
3. Why Operations Management?
To survive.
And to survive companies need focusing on –
– Quality
– Efficiency
– Timely delivery of goods and services
– Global Market and e-Business
– Advanced Technology handling capacity
– Advanced IT for information and business control
– Fast adopting, adaption and response
4. The Field Of Operations Management
• Customers Process • Products
• Raw Materials • Services
• Equipments
• Human Resources and
skills • Labor
• Information • Controlling systems
• Layout
• Shop Floor Processes
Input Output
5. Definition
• Operations management is the business
function that is responsible for managing and
coordinating the resources needed to produce
a company’s products and services.
• Without operations management there would
be no products or services to sell.
6. Functions to Manage a Business
Operation Management
(VP Operations)
Manages Inputs to
produce output
Finance
(VP Finance) Marketing
Manages Cash Flow and (VP Marketing)
investments
Manages Customer
demands and generates
sales.
President/
CEO
HR
IT & Infrastructure (VP HR M)
(VP IT)
Manages Human
Manages IT Resources planning and
Services, Applications and
Projects management
7. Historical Development of Operations Management
Concept Time Description
Industrial Revolution Late 1700s Brought in innovations that changed production by using machines instead of humans.
Scientific management Early 1900s Concepts of analysis and measurement of the technical aspects of work design, and
development of moving assembly lines and mass production.
Human relations 1930s to Human elements , such as job Design, worker motivation and job satisfaction.
movement 1960s
Management science 1940s to Development of quantitative techniques to solve operations problems.
1960s
Computer age 1960s MRP. Enabled processing of large amounts of data and ease in use of quantitative procedures.
Just-in-time systems (JIT) 1980s Designed to achieve high-volume production with minimal inventories.
Total quality 1980s To eliminate causes of production defects.
management (TQM)
Reengineering 1980s Redesigning a company’s processes in order to provide greater efficiency and cost reduction.
Environmental issues 1980s Considered waste reduction, the need for recycling, and product reuse. ISO 14000
Time-based competition 1990s Based on time, such as speed of delivery.
Supply chain 1990s Reducing the overall cost of the system that manages the flow of materials and information
management from suppliers to final customers.
Global competition 1990s Designed operations to compete in the global market.
e-Commerce / Business 2000s Use of IT and shopping portals. Use of DSS and Dashboards for decisions.
Intelligence
ROHS 1 July 2006 Restriction of the use of certain hazardous substances in electrical and electronic
manufacturing.
8. Various departments in Operations Management
[Assignment 1- Try to answer and fill the column to help your favorite co.]
General Decisions to be made Decisions specific to product or service Department
What are the unique features of the Operations strategy
Decision
Strategic
business that will make it competitive?
What are the unique features of the Product design
product?
What are the unique features of the Process selection
process that give the product its
unique characteristics?
What sources of supply should we use Supply chain
to ensure regular and timely receipt of managements
the exact materials we need? How do
we manage these sources of supply?
How will managers ensure the quality Quality management
of the product, measure quality, and
identify quality problems?
What is the expected demand for the Forecasting
product?
Where will the facility be located? Location analysis
How large should the facility be? Capacity planning
How should the facility be laid out? Facility layout
What are the different jobs and how and Job design and work
who can do those tasks and measure the measurement
performance
Decision
Tactical
When will orders be Inventory
placed and how much will be kept in management
stock?
Who will work on what schedule? Scheduling
9. 2 types of organizations
Manufacturing Service
• Product is tangible • Product is intangible
• Inventory Management is • No Inventory
a must Management for Service
• Low customer contacts • High customer contacts
• To fulfill need of • To fulfill customer’s need
customer it takes some it takes shorter time
longer time • Labor intensive.
• Capital intensive
10. Employment by Operation Sector
80
70
60
50
40 Manufacturing
Service
30
20
10
0
1958 1973 1988 2003
11. Role of OM
Customer Feedback
• Human
Resources The
• Shop Floor
• Facilities Transform • Product
Inputs • Processes ation
• SCM Output • Service
• Labor
• Technologies Process
• Material
Performance Measures
and
Control
12. Roles of an Operation Manager
– The success of an operating unit depends on it’s operation manger. So he
needs a domain expertise, human relationship skills and a decision maker.
– Teams- An operation manager can have more than one teams to manage with
varying degree of integration.
– Planning- Like Layout, capacity, location, product and services.
– Set goals and design schedules. Also determine means of accomplishment.
– Staffing- Selection and Training of personnel. Full Time/ part Time, skills and
overtime decisions.
– Directing- Ordering teams, assigning jobs and measuring results.
– Controlling- Inventory, Quality and processes.
– Organizing- Team charts, Make/Buy Strategy.
Who- Manpower
What- Product
Where- Location plant
When- Supply timings
How- Technology.
13. Current issues in OM
• Manufacturing facilities in India –Electronics/ Automobiles/Food.
• Labor unrest in operations.
• Security issues in e-Transactions: B2B, B2C, C2C portals and payment
gateways.
• Environmental issues – Implementing ISO 14000, ROHS in operations.
Kyoto protocol.
• Issues pertaining Lean manufacturing implementation
• Issues pertaining implementing ERP Systems- Business Intelligence
Tools, SCM Dashboards.
• Advancement is technologies and it’s handling in operations.
• Global Market and Operations.
• Emerging Asia dominance.
