intro- om for se

8/6/2019 Intro- OM for SE

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8/12/11 [email protected]

Introduction

to

Operations Management

Suhas Rane


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Business

Whats the purpose of business ?

Why are we in business ?

. to create wealth (Adam Smith )



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SIX BASIC FUNCTIONS OF BUSINESS

1. CREATION : Product Selections / Idea Generation

2. FINANCE : Managing Resources, Capital Acqn.,keeping Financial Records.

5. PERSONNEL : H.R., Labour Relations.

7. PURCHASING : Buying of required

(Eqpt. + Material + Services)

5. CONVERSION/ : Changing Raw Materials

(PRODUCTION) to Economic Goods.

6. DISTRIBUTION : Selling & Marketing (reaching theCustomer) .


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O. M. Definition

Operations Management is the effective

and efficient management of processes.

A PROCESS has an input and value addedoutput.

The objective of a process is to add valueby conversion from input to output.


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INPUTMaterialMachinesLaborManagementCapital

TRANSFORMATIONPROCESS

OUTPUTGoodsServices

Feedback

Operations as aTransformation Process


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Physical : as in manufacturing operations

Locational : as in transportation operations

Exchange : as in retail operationsPhysiological: as in health care

Psychological: as in entertainment

Informational: as in communication

Is there any Business / Industry /Enterprise

where an operation is not involved?

Transformation Diff. forms


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Scope of Operations Mgmt.

Long Term / Strategic Decisions

Product Selection & Design Process Selection & Planning

Facilities Location

Facilities Layout

Capacity Planning

Short Term / Operational Decisions

1. Production Planning & Control

2. Inventory Control

3. Quality Control

4. Method Study / Work Study

5. Maintenance & Replacement


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8/12/11 [email protected] 88

Agenda

OM what ? Why should I know ?

Six Basic Functions of Business

O M. Definition

Scope of Operations Management

Historical Development of OM

Taylor, Henry Ford, Hawthorne Studies

Operations Research, Computers & Adv. Opn. Technology.

Mfg. Industry v/s Service Industry

Production Systems

Input Transformation Output Relationships

Productivity Measurements

Decisions & Activities in OM


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Historical Development of OM

In olden days, did Production Systems exist ?Egyptian Pyramids,

Taj Mahal

Village Potter-man, Carpenter .

Features of Old production activities

Cottage System

Hand WorkUnorganized

Unique.


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Evolution of OM

Phases in evolution of OM

Craft Production

Mass Production

Lean Management

Mass Customisation


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Features of Diff. Prod.Systems

CRAFT System : Skill based, Manual,

Small Qty., Customisation,

Low Cap. Investmt., but high unit cost of prodn.

(MH Husain Painting, DC Car, Space-Lab)

Mass Production : Low skill, More automation,

Large Qty. Standardisation,

High Cap Invst., but low unit cost of prodn.

(Tata Salt, HUL Lux, Nano, SSC Course)



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Features of Diff. Prod.Systems

LEAN System : All muscle, No fat (of mainly inventory) : Leopard

Multi-skilled staff,

TQM, Quick change-over (SMED),

Single Pc. Flow, Kanban(Toyota Prod. System)

Mass Customization : High Flexibility

Limited Customization at affordable extra cost

(Dell, Asian Paints, Godrej Furniture)



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Historical Evolution of OM

F.W. Taylor (1856-1915)

Father of Sc. Management

Each worker to be trained for suitable job

(according to his skill, strength, and learning ability

Divn. of Labour Synergy Effect )

Standard Output Norms set per worker.

Instructions Card, Routing Sheets, Material Specs

-All Standardized.

Supervision . Not for keeping watch, but to arrange facilities.

Incentive for motivation & increasing productivity


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Historical Evolution of OM

Henry Ford (1913)

Moving Assembly Line concept

Standardized product design

Mechanized assembly line

Specialized labour

Interchangeable parts

Result : Av. labour per chassis

reduced from 12.5 hrs to 93 min.


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Mfg. v/s Services Whats the

difference?

Mfg. Industry ServiceIndustry

Creationof Goods

ProvidingServices

Production Mgmt

OperationsMgmt

Business Organization


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Maximizing Value Addition in Operations

Click to edit Master text stylesSecond level

Third level Fourth level

Fifth level

Inp t Transformation O tp t Relationships


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Input Transformation Output Relationships

System PrimaryInputs

Resources Transformation Fn.(s) Typical Desired Output

Automobile

Factory

Sheet steel,

engine parts

Tools,

equipment,workers

Fabrication and Assy. of cars

(physical)

High-quality cars

Hospital Patients MDs, nurses,medicalequipment

Health care (physiological) Healthy individuals

Restaurant Hungry

customers

Food, chef, wait-

staff,environment

Well-prepared,

Well-served food; Stimulatingenvironment

Satisfied customers

College oruniversity

High schoolgraduates

Teachers, books,classrooms

Imparting knowledge andskills (informational)

Educated individuals

Departmentstore

Shoppers Displays of goods, salesclerks

Attract shoppers, Promoteproducts, Fill orders(exchange)

Satisfied customers

DistributionCentre

SKUs Storage bins,stock-pickers

Storage and redistribution Fast delivery, availability ofSKUs


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Strategic issues

in

Operations Management



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Operations 80-90%Hidden

Click to edit Master text stylesSecond level

Third level

Fourth level Fifth level

Clickto edit Master text stylesSecond level

Third level

Fourth level Fifth level


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The Value Equation

price

ePerformancValue =

price

InnovationyFlexibilitTimelinessQualityValue

+++=

P

IFTQValue

+++=


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Strategic Priorities

Type Priority

Cost Providing low price products.Controlling costs across the board.

Quality Providing high quality products.Focus is on product and process quality.

Delivery Providing products reliably and quickly.

Flexibility Providing a wide variety of products (masscustomization).

How fast a firm can produce a new product line.

Service Providing value-added service.How products are delivered and supported.


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Productivity Concepts



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Production & Productivity

Production Output (in No of Units)

Output

Productivity ------------ No. of pcs./hr.

Input


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Three Main ProductivityIndices



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Productivity Measures

( Output in terms of Input)

Machines - Out put per Machine Hour

Men - Out put per Man Hour

Materials - No of units produced per input of R.M.

(e.g. - No of Screws per Kg of wire)

Power - No of Pcs. per KW Unit of El. Power

Boiler - Kgs. of Rubber cured / Kg of steam used


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Productivity of an Organization

Sugar Mill - Kg. of sugar produced /

Ton of sugar-cane crushed

Fabrication - Tons of Fabrication /

Kg. of Welding Rod


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Service Industry : ProductivityMeasures

Business Productivity Measure

Restaurant Customers (meals) per hour

Retail Store Sale per Sq. foot

Chicken farm Kg. of meat per kg. of feed

Utility plant Kilowatts per ton of coal

Paper mill Tons of paper per ton of wood

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