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Production & Operations Management Course Outline: MB202 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
What is Operations Management? ,[object Object]
Operations Management ,[object Object]
Operations Management Flow Chart
Organization Inputs Outputs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Operations Management ,[object Object]
Ten Decision Areas of OM ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
A Process Management Perspective ,[object Object],Inputs Outputs Goods Services Labor & Capital Resources Information structure Network of Activities  and  Buffers Flow units (customers, data,  material, cash, etc.) Process Management
Process Management ,[object Object],[object Object]
Typical Organization Chart
Typical Manufacturing Organization
Products & Facilities Product design Facilities layout Capacity planning Facilities location Structure Reporting relationships Teams Control Processes Inventory management Productivity Quality The Technical Core Operations Management Inputs Raw materials Human resources Land, buildings Information Technology Outputs Products Services Operations Strategy Feedback
Business Information Flow
Differences between Manufacturers and Service Operations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Service and Manufacturers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Products ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Inputs-Outputs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Transformations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
All Managers are Ops Managers! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Operations Management Value Proposition System Design Planning & Control ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Operational Concerns for Manufacturing and Service Organizations ,[object Object],[object Object],[object Object]
Functions of Operations Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Functions of Operations Management ,[object Object],[object Object],[object Object],[object Object]
OM Decisions
Operations Management Decisions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Product Design ,[object Object]
1 Producibility Cost Quality Reliability 2 3 4
1 Producibility Cost Quality Reliability 2 3 4 Timing 5
Characteristics of Goods ,[object Object],[object Object],[object Object],[object Object],[object Object]
Characteristics of Service ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Automobile Computer Installed Carpeting Fast-food Meal Restaurant Meal Auto Repair Hospital Care Advertising Agency Investment Management Consulting Service Counseling Percent of Product that is a Good Percent of Product that is a Service 0 25 50 75 100 25 50 75 100
Competitive Priorities- The Edge ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Competing on  Cost ? ,[object Object],[object Object],[object Object],[object Object],[object Object]
Competing on  Quality ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Competing on  Time ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Competing on  Flexibility ? ,[object Object],[object Object],[object Object],[object Object],[object Object]
Characteristics of a Good Design ,[object Object],[object Object],[object Object],[object Object],[object Object]
Characteristics of a Good Design ,[object Object],[object Object],[object Object],[object Object],[object Object]
Introduction Growth Maturity Decline Time Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Product Development ,[object Object],[object Object]
Introduction Growth Maturity Decline Standardization Less rapid product changes - more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning good margin Reduce capacity Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focused Enhance distribution Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Best period to increase market share R&D product engineering critical Practical to change price or quality image Strengthen niche Cost control critical Poor time to change image, price, or quality Competitive costs become critical Defend market position OM Strategy/Issues Company Strategy/Issues HDTV CD-ROM Color copiers Drive-thru restaurants Fax machines Station wagons Sales 3 1/2 ”  Floppy disks Internet
Product Development Process  (Technical) Needs  Identification Advance product planning Advance design Detailed engineering design Production process design and development Product evaluation and implementation Product use and support
Needs  Identification ,[object Object]
Advance product planning ,[object Object]
Advance design ,[object Object]
Detailed engineering design ,[object Object]
Production process design and development ,[object Object]
Product evaluation and implementation ,[object Object]
Product use and support ,[object Object],[object Object],[object Object],[object Object],[object Object]
Product Developments Techniques ,[object Object],[object Object],[object Object],[object Object]
Standardization ,[object Object]
Simplification ,[object Object]
Specialization ,[object Object]
Diversification ,[object Object],[object Object],[object Object],[object Object],[object Object]
Process Selection ,[object Object],[object Object],[object Object],[object Object],[object Object]
Project ,[object Object]
Intermittent System ,[object Object],[object Object]
Intermittent System ,[object Object]
Job Shop ,[object Object]
Batch ,[object Object]
Continuous Production System ,[object Object],[object Object]
Continuous Production System ,[object Object]
Mass (Assembly line) ,[object Object]
Process (Continuous Flow) ,[object Object]
Process-focused Job Shops (Print shop, emergency room , machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread) Mass Customization Customization at high Volume (Dell Computer ’ s PC) Low  Moderate  High Volume High Moderate Low Variety of Products
 
 
Raw Material & Comp. Inventory Finished Item Inventory S1,2 S1,1 S1,n S2,1 S2,2 S2,m Assembly Line 1: Product Family 1 Assembly Line 2: Product Family 2 Fabrication (or  Backend Operations) Dept. 1 Dept. 2 Dept. k S1,i S2,i Dept. j
Product-Process Mix ,[object Object]
Commercial printer Heavy equipment Auto assembly Sugar refinery Void Void Low volume, low standardization, one of a kind Multiple products, low volume Few major products, higher volume High volume, high standardization, commodity products Process structure process  life-cycle stages Jumbled flow (job shop ) Disconnected line flow (batch) Connected line flow (assembly line) Continuous flow Product structure Product life-cycle stages
Facility Location ,[object Object]
Facility Location ,[object Object],[object Object]
Importance of Facility Location ,[object Object],[object Object],[object Object]
Location Factors ,[object Object],[object Object]
Primary factors ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Secondary factors ,[object Object],[object Object],[object Object],[object Object],[object Object]
Secondary factors ,[object Object],[object Object],[object Object],[object Object]
Urban Rural ,[object Object],[object Object],[object Object],[object Object],The market place is far away from the industries, therefore cost of distribution of finished products is more.  It is rather difficult to get skilled labour in rural areas. Adequate transport facilities are not available. Absence of allied industries.
Urban Rural ,[object Object],[object Object],[object Object],[object Object],There are fewer educational, social and recreational facilities.   Sufficient land is available at cheaper rates. There are few restrictions on construction of factory buildings. Municipal facilities and public utility services are not available.
Urban Rural ,[object Object],[object Object],[object Object],[object Object],[object Object],Prompt postal and communication services are not available. The rates of taxes are quite low. Labour is available at cheaper rate. Absence of banking facilities, credit facilities and insurance facilities.  Labour force is more stable.
Urban Rural ,[object Object],[object Object],[object Object],[object Object],Trade union movement is not very strong.  Absence of training facilities and management institutes.  Storing and warehouse facilities are not available. Problems of air pollution, water pollution, etc. are less and the rural environment is conducive to good health of workers.
Urban Rural ,[object Object],[object Object],Less danger of bombardment in war time. Government provides financial assistance and land at cheaper rates to attract the entrepreneurs to start industries in rural areas.
General Procedure for Facility Location Planning ,[object Object],[object Object],[object Object]
The Preliminary Screening ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Resources Local Conditions
Sources of Information ,[object Object]
Detailed Analysis ,[object Object]
Factor Ratings ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Factor ratings for each location alternative Total Score Factor Factor Rating Location Rating Product of Ratings Tax advantages Suitability of labor skills Proximity to customers Proximity to suppliers Adequacy of water Receptivity of community Quality of educational system Access to rail and air transp. Suitability of climate Availability of power 4 3 3 5 1 5 4 3 2 2 8 2 6 2 3 4 1 10 7 6 32 6 18 10 3 20 4 30 14 12 149
Total Cost Analysis  ,[object Object],[object Object]
Total costs Locations  A  B C  D 5 4 3 3 3 1 1 1 1 2 2 2 3 4 4 4 5 5 5 2
Volume of Units Costs of Facts Total Fixed Costs Material Transportation Labor
Volume of Output Total Costs  C C B A D E A D B E
M A M B = [CA 1 ]  W 1 [CB 1 ] [CA 2 ]  W 2 [CB 2 ] [CA  n ]  W n [CB  n ] ……… . If  M A M B Is more than one then location A will be better than B.
Facility Layout ,[object Object]
Facilities Layout ,[object Object],[object Object],[object Object],[object Object]
Factors affecting the Plant Layout ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Factors affecting the Plant Layout ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Types of Plant Layout ,[object Object],[object Object],[object Object]
Capacity Planning ,[object Object]
Capacity Planning ,[object Object]
Capacity Planning Decisions ,[object Object],[object Object],[object Object],[object Object],[object Object]
Strategies for Modifying Capacity ,[object Object],[object Object]
Production Planning and Control ,[object Object]
Functions of Production Planning and Control ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Work Study ,[object Object]
Components of Work Study ,[object Object],[object Object]
Method Study ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Work Measurement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Productivity  ,[object Object]
Productivity ,[object Object],[object Object],[object Object],Productivity Units   produced Input used =
Measuring Productivity ,[object Object],[object Object],[object Object],[object Object],[object Object],Output Labor  +  Capital  +  Materials  + Energy = = Output Labor dollars
Improving Productivity ,[object Object],[object Object],[object Object]
Major Productivity Variables and their contribution to productivity increase ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Productivity
Measuring Productivity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Labor Productivity ,[object Object],[object Object],[object Object],[object Object]
Interpreting Productivity Measures ,[object Object],[object Object],[object Object]
Productivity Growth Rate ,[object Object]
Productivity Growth Rate ,[object Object],[object Object],[object Object]

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Production & operations management

  • 1.  
  • 2.
  • 3.
  • 4.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 13. Products & Facilities Product design Facilities layout Capacity planning Facilities location Structure Reporting relationships Teams Control Processes Inventory management Productivity Quality The Technical Core Operations Management Inputs Raw materials Human resources Land, buildings Information Technology Outputs Products Services Operations Strategy Feedback
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21.
  • 22.  
  • 23.
  • 24.
  • 25.
  • 27.
  • 28.  
  • 29.
  • 30. 1 Producibility Cost Quality Reliability 2 3 4
  • 31. 1 Producibility Cost Quality Reliability 2 3 4 Timing 5
  • 32.
  • 33.
  • 34. Automobile Computer Installed Carpeting Fast-food Meal Restaurant Meal Auto Repair Hospital Care Advertising Agency Investment Management Consulting Service Counseling Percent of Product that is a Good Percent of Product that is a Service 0 25 50 75 100 25 50 75 100
  • 35.
  • 36.
  • 37.
  • 38.
  • 39.
  • 40.
  • 41.
  • 42.
  • 43.
  • 44. Introduction Growth Maturity Decline Standardization Less rapid product changes - more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning good margin Reduce capacity Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focused Enhance distribution Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Best period to increase market share R&D product engineering critical Practical to change price or quality image Strengthen niche Cost control critical Poor time to change image, price, or quality Competitive costs become critical Defend market position OM Strategy/Issues Company Strategy/Issues HDTV CD-ROM Color copiers Drive-thru restaurants Fax machines Station wagons Sales 3 1/2 ” Floppy disks Internet
  • 45. Product Development Process (Technical) Needs Identification Advance product planning Advance design Detailed engineering design Production process design and development Product evaluation and implementation Product use and support
  • 46.
  • 47.
  • 48.
  • 49.
  • 50.
  • 51.
  • 52.
  • 53.
  • 54.
  • 55.
  • 56.
  • 57.
  • 58.
  • 59.
  • 60.
  • 61.
  • 62.
  • 63.
  • 64.
  • 65.
  • 66.
  • 67.
  • 68. Process-focused Job Shops (Print shop, emergency room , machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread) Mass Customization Customization at high Volume (Dell Computer ’ s PC) Low Moderate High Volume High Moderate Low Variety of Products
  • 69.  
  • 70.  
  • 71. Raw Material & Comp. Inventory Finished Item Inventory S1,2 S1,1 S1,n S2,1 S2,2 S2,m Assembly Line 1: Product Family 1 Assembly Line 2: Product Family 2 Fabrication (or Backend Operations) Dept. 1 Dept. 2 Dept. k S1,i S2,i Dept. j
  • 72.
  • 73. Commercial printer Heavy equipment Auto assembly Sugar refinery Void Void Low volume, low standardization, one of a kind Multiple products, low volume Few major products, higher volume High volume, high standardization, commodity products Process structure process life-cycle stages Jumbled flow (job shop ) Disconnected line flow (batch) Connected line flow (assembly line) Continuous flow Product structure Product life-cycle stages
  • 74.
  • 75.
  • 76.
  • 77.
  • 78.
  • 79.
  • 80.
  • 81.
  • 82.
  • 83.
  • 84.
  • 85.
  • 86.
  • 87.
  • 88.
  • 89.
  • 90.
  • 91. Factor ratings for each location alternative Total Score Factor Factor Rating Location Rating Product of Ratings Tax advantages Suitability of labor skills Proximity to customers Proximity to suppliers Adequacy of water Receptivity of community Quality of educational system Access to rail and air transp. Suitability of climate Availability of power 4 3 3 5 1 5 4 3 2 2 8 2 6 2 3 4 1 10 7 6 32 6 18 10 3 20 4 30 14 12 149
  • 92.
  • 93. Total costs Locations A B C D 5 4 3 3 3 1 1 1 1 2 2 2 3 4 4 4 5 5 5 2
  • 94. Volume of Units Costs of Facts Total Fixed Costs Material Transportation Labor
  • 95. Volume of Output Total Costs C C B A D E A D B E
  • 96. M A M B = [CA 1 ] W 1 [CB 1 ] [CA 2 ] W 2 [CB 2 ] [CA n ] W n [CB n ] ……… . If M A M B Is more than one then location A will be better than B.
  • 97.
  • 98.
  • 99.
  • 100.
  • 101.
  • 102.
  • 103.
  • 104.
  • 105.
  • 106.
  • 107.
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  • 111.
  • 112.
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  • 114.
  • 115.
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  • 118.
  • 119.
  • 120.
  • 121.
  • 122.

Editor's Notes

  1. This slide simply introduces the 10 decisions. You may not wish to do more than “define” the decision area and give one or two examples.
  2. This slide can be useful in summarizing strategy changes over the lifecycle of the product.
  3. This slide can be used to introduce the process design options, and help students begin to understand the conditions of volume and variety under which they are most useful. Student should be asked to provide and discuss examples.
  4. You might also ask them to consider what happens as the rate of productivity improvement approaches zero. Does this simply mean that the standard of living ceases to rise, or are there more ominous manifestations?