This slide consists of following operations management (OM) topics: 1. concept or definition of operations management (OM) 2. Transformation process of OM 2.1. Inputs, process and outputs 3. 4 rights in OM 4. Objectives of operations management (OM) 5. Functions of Operations management 6. Historical Development of operations management (OM) 7. New Trends in Operations Management 8. Ethics in Operations management source: Book of Jay Heizer & Barry Render (2015) "Operations Management" © 2015 Pearson India Education Services Pvt. Ltd. . By: Uttar Tamang

1. Operations
Management
(OM)
By: Uttar Tamang

2. 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.

3. Transformation process of
OM
Inputs Process Outputs
- Materials
- Manpower
- Machinery
- Money
- Managemen
t
- Information
- Land &
building
- Manpower
- Machinery
- Managemen
t
- Schedule
- Products
- Services
- Needs
- Expectatio
n
- Creation

4.  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.

5. 4 rights in OM
These are the ways to accomplish the organizational operations
goals.
1. Right products for right service
2. Right time or timing
3. Right approach or method
4. Right customer
Note: Value creation:
- The organization can create a value on goods and
services through the right time and right approach
only.

6. Objectives of operations
management
1. Quality production
2. Fulfillment of interest of stakeholders
3. Other objectives
◦ Maximize profit and value
◦ Reduce manufacturing cost
◦ Optimum resource utilization
◦ Improving staffing
◦ Quality assessment

7. 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)

8. Functions of Operations
management
 Planning function
 Organizing function
 Controlling function
 Behaviour function
 Model function

9. 1. Planning function
- Development of rules, regulations, policies and
strategies
- Product or service planning (size, shape, quality,
features)
- Location planning (market, raw materials, transportation)
- Process planning (process understanding, development,
best selection, evaluation, implementation)
- HR planning (recruitment, selection, training, socialization,
compensation, reward and punishment, performance test)
2. Organizing function
- Allocation of duties and responsibilities
- Communication system or pattern development
- Job analysis (job description, job specification)

10. 3. Controlling function
- It ensure the plans for the creation of products by
subsystems accomplished- that are:
- Controlling cost - Manpower
- Materials - Schedules
- Quality - Materials requirement planning
(MRP)
- Machinery/Technology
4. Behaviour 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

11. 5. 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 (simplex table, transportation table,
assignment table etc)
- Simulation model
- Inventory model
- Waiting line model
- Networking
- Decision tree model
- Control charts model etc

12. Russell & Taylor, 2009 “Operations
management’’
Historical Development of OM
Production Era Concept on theory Year Originator
Industrial Revolution - Steam engine
- Division of labour
1769 James Watt
Adam Smith
Scientific
management
- Principle of scientific
management
- Time and motion studies
- Activities scheduling chart
1911
1911
1912
F.W. Taylor
Frank & Lillian
Gilbert
Henry Gantt
Human relation - Haw Throne
- Motivational theory
1930
1940s
1950s
Elton Mayo
Abraham Maslow
Fredrick Herzberg
Operations research - Linear programming
- technique
- Decision tree, waiting line
theory, inventory model, net
working, simulation etc.
1947
1940s
1950s
George Dantzig
Rand corporation
Operations research
group
Quality revolution - JIT (Just in time)
-TQM (Total quality
management)
- Operations strategy
1970s
1980s
1980s
Taichi Ohno (Toyota)
W. Edward Deming
Robert Hayes

13. Trends in Operations
Management
1. Global focus
2. JIT production
3. Supply chain partnering
4. Rapid production
5. Mass customization`
6. Environmentally sensitive production
7. Empowered employees
8. Ethics

14. 1. Global focus
- The rapid decline in communication and
transportation costs has made markets global.
- Similarly, resources in the form of material, capital,
materials, talent and labour are also now global.
- As a result, countries throughout the world are
contributing to globalization as they vie for
economic growth.
- Operations managers are rapidly seeking creative
designs, efficient production and high quality
goods via international collaboration.
2. JIT production
- Inventory throughout the supply chain requires
financial resources, hides quality issues and
constrains response to ever shorter product life
cycle.

15. - These forces push operations managers to work with
their supply chain to viciously cut inventories at every
level.
- Thus, the production should be activate at the time of
customer demand.
3. Supply chain partnering
- Shorter product life cycles, demanding customers and
fast changes in technology, materials and processes
requires the supply chain partnering to be in tune with
the needs of end users.
4. Rapid production
- Technology combined with rapid international
communication of news, entertainment and life styles
is dramatically chopping away at the life span of
products.

16. 5. Mass customization
- In a world where consumers are increasingly aware of
innovation and options, substantial pressure is placed
on firms to response in a creative way.
- And operations manager must rapidly respond with
product designs and flexible production process that
cater to the individuals.
6. Empowered employees
- The knowledge explosion and a more technical
workplace have combined to require more
competence in the work setting.
- Operations manager is responding by enriching jobs
and moving more decision making to the individual
contributor.

17. 7. Environmentally sensitive production
- Operations manager should develop the new product
and to redesign existing products or service in order
to reduce the impact on the environment.
- Product packaging, product processing, product
designing are the most visible and important elements
of an environmentally sensitive production operations.
8. Ethics
- The operations management functions or activities
are not damaging to either consumer or society.
- The manager should consider the effects of new
technologies, defective services, animal testing and
business deals have on people, safety and green
products.

18. Ethics in Operations
management
 Efficient production of goods and services
as per customer desire and expectation.
 Eco friendly production
 Safe and convenient working environment
 Honoring community commitments
 Legal and ethical production of product and
services maintaining quality respecting
customers

19. Thank
You
By: Uttar Tamang