intro operations management

8/6/2019 Intro Operations Management

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Operations Management

Facilitator:

Dr Pramod Shetty


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Introduction

Major sectors in a country - Manufacturing , Service andAgriculture

In India Manufacturing and Services constitute 75% of the GDP


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Definition

Production and Operations Management

("POM") is about the transformation of

production and operational inputs into

"outputs" that, when distributed, meet the

needs of customers.


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Inputs Outputs

Goods

Services

Labor & Capital

Feedback

forcontrol

Transformation:Transformation:

Network of activities

Flow Units(Material, Information,

Knowledge, etc.)

Resources

Operations

Management

Operations as a Transformation Process


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Transformations

Manufacturing Transformations

Machine tool mfg

Service Transformations

Bank, garage, restaurant

Differences in terms of

Tangibility

Simultaneous production & consumption Perishability

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PRODUCTMarketers in a business must ensure that a business sells products

that meet customer needs and wants. The role of Production and

Operations is to ensure that the business actually makes the required

products in accordance with the plan. The role of PRODUCT in POM

therefore concerns areas such as:

- Performance

- Aesthetics

- Quality- Reliability

- Quantity

- Production costs

- Delivery dates

POM incorporates many tasks that are

interdependent, but which can be grouped under five

main headings:


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PLANTTo make PRODUCT, PLANT of some kind is needed. This will

comprise the bulk of the fixed assets of the business. In determining

which PLANT to use, management must consider areas such as:

- Future demand (volume, timing)

- Design and layout of factory, equipment, offices

- Productivity and reliability of equipment

- Need for (and costs of) maintenance

- Heath and safety (particularly the operation of equipment)

- Environmental issues (e.g. creation of waste products)


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PROCESSESThere are many different ways of producing a product.

Management must choose the best process, or series of

processes. They will consider:

- Available capacity

- Available skills

- Type of production

- Layout of plant and equipment

- Safety- Production costs

- Maintenance requirements


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PROGRAMMES

The production PROGRAMME concerns the

dates and times of the products that are to be

produced and supplied to customers. The

decisions made about programme will be

influenced by factors such as:

- Purchasing patterns (e.g. lead time)- Cash flow

- Need for / availability of storage

- Transportation


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PEOPLE

Production depends on PEOPLE, whose skills,

experience and motivation vary. Key people-relateddecisions will consider the following areas:

- Wages and salaries

- Safety and training

- Work conditions- Leadership and motivation

- Unionisation

- Communication


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Importance of Operations Management

During the past couple of decades, many domesticcompanies saw their market share decline due to theirinability to compete with foreign firms in terms of productdesign, cost, or quality.

Theories to explain this development: Cultural differences

Government policies

Neglect of human resources

Insufficient investment in technology

World-class performance by operations in delivering high-quality, cost-competitive products and services is essential tosurvival in today's global economy.

Of late Auto components, pharma, IT and ITES sectors are

showing signs of global competitiveness.


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VS THE ELEPHANT

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India Factor China

10 million TV sets produced 40 million

56 mn tons Steel production 578 mn tons

$30 bn Textiles production $145 bn

$15 bn Textiles exports $80 bn

2 million Automobilesproduction

5.5 million


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What to Produce? The Design of Products &

Services

Where to Produce? Facility Location

How Much to Produce? Capacity Planning

for Manufacturing & Service Systems

How to Produce? Process Design; Work

Analysis, Design & Measurement; Layout &

Safety.


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Customer focus.

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Core services are basic things that customers wantfrom products they purchase.

Core Services


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Value-added services differentiate theorganization from competitors and buildrelationships that bind customers to the firmin a positive way.

Value-Added Services

Defined


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Dealing with Trade-Offs

Cost(Value)

Quality

Delivery (Speed)Flexibility

WCM -companies adopt TQM, Pull systems, JIT,TPM

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How do Firms Add Value?

Greaterproductivity Lower costs and expenses

Lower prices for the customer

H

igherquality Better performance Greater durability, reliability, aesthetics.

Bettertimeliness Faster response and turnaround

On-time delivery, meet promises

Greaterflexibility greater variety

customization for customer needs / desires


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OM and Other Business Functions -Marketing

What operations can do relative to meetingdue dates, product customization, new

product introduction.


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OM and Other Business Functions - Finance

Understand inventory management, capacityutilization and labour standards to developaccurate cost data, perform audits, and preparefinancial reports.

Cost accountantsmust be aware of how JITworks.

Need for capital investments.

Forecast cash flows. Make-or-buy decision.

Plant expansion and/or relocation.


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OM and Other Business Functions - IT

Design and develop software.

Major business applications of computers

is in production control.


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OM and Other Business Functions -

Entrepreneurs

Often fail because they run out of

working capital.

Poor production, planning and inventory

management.


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Current Issues in OM

Effectively consolidating the operationsresulting from mergers.

Developing flexible supply chains to enablemass customisation of products and services.

Managing global supplier, production anddistribution networks.


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Current Issues in OM (contd)

Increased commoditization of suppliers.

Achieving the Service Factory.

Achieving good service from service firms.

intro operations management

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