This document discusses the key concepts of operations management. It begins by introducing the group members presenting and defining operations management as the set of activities that creates value through transforming inputs into outputs. It then outlines the transformation process of operations management involving inputs, processes, and outputs. The document also discusses objectives of operations management including quality production and fulfilling stakeholder interests. Finally, it explores several operations management decisions at the strategic, tactical, and operational levels.

2. SUPPLY CHAIN PRESENTATION
Group Members
M Shahid
Rashna Rasool
Yousaf
Nabeera Khalid
Nimra Tariq
Rabeea Rafi

3.  CONCEPT OR DEFINITION
 Operations management (OM) is the set of
activities that creates value in the form of goods
and services by transforming inputs into outputs.
 OM is that part of an organization which is
concerned with the value adding activities as per
policies that converse the range of inputs
(materials, man- power, machinery, money or
capital) into the required product or services as
per customer need and expectation.

4.  TRANSFORMATION PROCESS OF OM

5.  TRANSFORMATION PROCESS OF OM
 Inputs - It is the basic resources which is
needed for the further processes involved with
the operations such as materials, man-power,
machinery, money or capital etc. to obtain a
desired outputs.
 Process - It is the set of functions, procedures,
policies, specific methods, management,
schedule etc. which helps to convert inputs into
the required outputs.
 Outputs - It is the finished and final process of
the inputs in the form of goods and services to
meet the customer need and expectation.

6.  4 RIGHTS IN OM
These are the ways to accomplish the
organizational operations goals.
 Right products for right service
 Right time or timing
 Right approach or method
 Right customer

7.  OBJECTIVES OF OPERATIONS
MANAGEMENT
 Quality production
 Fulfillment of interest of stakeholders
 Other objectives
*Maximize profit and value
*Reduce manufacturing cost
*Optimum resource utilization
*Improving staffing
*Quality assessment

8.  OBJECTIVES OF OPERATIONS MANAGEMENT
1. Quality Production:
* The quality goods and services should produced
based on the customer needs.
* Products should be easily available, used to
standard, affordable
2. Fulfillment of interest of stakeholders:
Some benefits to the stakeholders:
* Suppliers (cash down, long term relationship)
* Customers (quality products, quick response)
* Employees (incentives, job security, motivation)
* Society (employment, social responsibility)
* Promoters (profit, facilities, high return)

9.  OPERATIONAL MANAGEMENT DECISIONS
Operation managers must take Decisions on three
Levels:

10.  STRATEGIC DECISIONS
 Strategic decisions are long term, complex
decisions made by senior management. These
decisions will affect the entire direction of the
firm.

11.  TACTICAL DECISIONS
 Tactical decisions are medium term, less
complex decisions made by middle managers.
They follow on from strategic decisions and aim
to meet the objectives stated in any strategic
decision.

12.  OPERATIONAL DECISIONS
 Are day to day decisions made by junior
managers that are simple and routine. This could
involve the regular ordering of supplies or the
creation of a staff Rota.

13.  OM'S CONTRIBUTIONS TO SOCIETY
Higher Standard of Living
 Better Quality Goods and Services
Concern for the Environment
Improved Working Conditions

14.  HIGHER STANDARD OF LIVING
 A major factor in raising the standard of living in
a society is the ability to increase its
productivity.
 Higher productivity is the result of increased
efficiency in operations, which in turn translates
into lower cost goods and services
 Thus, higher productivity provides consumers
with more discretionary income, which
contributes to their higher standard of living.

15.  HIGHER STANDARD OF LIVING

16.  BETTER QUALITY OF GOODS AND SERVICES
 One of the many consumer benefits increased
competition is the higher-quality products that
are available today.
 Quality standards are continually increasing
 Many companies today have established Six-
Sigma quality standards (pioneered by Motorola
in the late 1980s), resulting in no more than 3.4
defects per million opportunities.
 Such high quality standards were once
considered not only prohibitively expensive but
also virtually impossible to achieve even if cost
wasn't consideration.

17.  CONCERN FOR THE ENVIRONMENT
 Many companies today are taking up the
challenge to produce environmentally friendly
products with environmentally friendly
processes, all of which falls under the purview of
operations management.
 Recycling and concern for air and water quality.

18.  IMPROVED WORKING CONDITIONS
 Managers recognize the benefits of providing workers
with better working conditions.
 This includes not only the work environment but also the
design of the jobs themselves.
 Workers are now encouraged to participate in improving
operations through suggestions.
 After all, who would know better how to do a particular
operation than that person who does it every day.
 Managers also have learned that there is a very clear
relationship between satisfied workers and satisfied
customers, especially in service operations.
(Empowerment: The concept of encouraging and
authorizing workers to take the initiative to improve
operations, reduce costs, and improve product quality and
customer service.)

19.  OM OF SERVICE AND MANUFACTURING
ORGANIZATION
 Initially, operations management concepts
focused almost entirely on manufacturing.
 As countries become more developed, services
continue to represent a larger percentage of their
economies.
 Now Less than 20% of all jobs are in
manufacturing (and they are declining)
 Almost 80% of jobs are in the service sector
(and they are increasing)

24.  SERVICE AND MANUFACTURING
SIMILARITIES
 All use technology .
 Both have quality, productivity, & response issues.
 All must forecast demand .
 All have customers and suppliers.
 All have scheduling and staffing issues.

25.  MANUFACTURING VS. SERVICE

26.  THE EVER-CHANGING WORLD OF OM
 Operations management is continuously
changing to meet the new and exciting
challenges of today's business world.
 This ever-changing world is characterized by
increasing global competition and advances in
technology.

27.  INCREASED GLOBAL COMPETITION
 Global (economy, village, and landscape): are terms used to
describe how the world is becoming smaller, and countries
are becoming more dependent on each other. The world is
rapidly transforming itself into a single global economy,
which referred to as a global village or global landscape.
Markets once dominated by local or national companies are
now vulnerable to competition from literally all corners of the
world. For example, in the 1960s, only 7 percent of the
firms in the United States exposed to foreign competition; by
the late 1980s,
 This figure exceeded 70 percent, and that percentage has
continued to grow. Consequently, as companies expand their
business to include markets, so too must the operations
management function take a more global perspective in order
for companies to remain competitive.

28.  ADVANCES IN TECHNOLOGY
Advance in technology in recent years have
had a significant effect on the OM functions:
 IT+ automation + Internet
 Competition
 Product life cycle
 New jobs

29.  FUNCTIONS OF OPERATIONS MANAGEMENT
 Planning function
 Organizing function
 Controlling function
 Behavior function
 Model function

30.  PLANNING FUNCTION
 Development of rules, regulations, policies and
strategies
 Product or service planning (size, shape, quality,
features)
 Location planning (market, raw materials,
transportation)
 HR planning (recruitment, selection, training,
socialization, compensation, reward and
punishment, performance test)

31.  ORGANIZING FUNCTION
 Allocation of duties and responsibilities
 Communication system or pattern development
 Job analysis:
* Job description
* Job specification

32.  CONTROLLING FUNCTION
 It ensure the plans for the creation of products
by subsystems accomplished that are:
 Controlling cost
 Manpower
 Materials
 Quality
 Materials requirement planning (MRP)
 Machinery/Technology

33.  BEHAVIOR FUNCTION
 Motivation (requirements, understanding, short
& long term impact, positive & negative impact
through motivational factors)
 Leadership (leaders try to capture the mind of
the followers through their own ideology or
philosophy)
 Communication (complete form of sentences,
body

34.  MODEL FUNCTION
 Models are the approaches or methods that are
used to simplify the complexities.
 As an operations manager he/she should have
idea of following models:
* Linear programming
* Simulation model
* Inventory model
* Waiting line model
* Decision tree model

35.  MAKE OR BUY DECISIONS
 A make or buy decision is the act of choosing
between manufacturing a product in house or
purchasing it from an external supplier (out-
sourcing).

36.  FACTORS
 Available capacity :
 Proper equipment
 Necessary skills
 Proper time
 Expertise :
 If a firm lacks the expertise to a job satisfactory,
buying might be a reasonable alternative.
 Quality consideration :
 Firms that specialize can usually offer high
quality than an organization can itself.
 Unique quality requirements may cause an
organization to perform a job by itself.

37.  FACTORS
 The nature of demand :
 High and steady demand , doing the work itself.
 Fluctuations in demand or small orders , outsource
 Cost :
 Any cost savings achieved from buying or making
must be weighted against the preceding factors.
 Cost saving might come from the item itself or from
transportation cost savings.
 Risk :
 Loss of control operations.
 Delay in orders.
 Disclose information.

38.  HISTORICAL DEVELOPMENT OF
OPERATION MANAGEMENT

39.  HISTORICAL DEVELOPMENT OF OPERATION
MANAGEMENT